With the summer almost upon us, people are turning their thoughts towards going away. Holiday home lettings and Airbnb bookings have surged in popularity recently with many holiday makers choosing to rent ‘homes’ rather than stay in a hotel. However, for many homeowners, letting their property can mean taking on additional risks with reports of properties being badly damaged by renters who have held ‘wild parties’, leaving hosts with huge repair and cleaning bills.
Thomas Pertaia, a solicitor at DAS Law, answers the most important questions for those thinking of tapping into this growing market…
If your property or belongings are damaged or stolen, will your home and contents policy cover you?
It is unlikely, as the insurer will not usually have catered for paying guests when arranging the policy. The host would need to clarify with their insurer as to whether their insurance cover would be sufficient to cover losses. Airbnb offers a ‘host guarantee’ whereby the firm promises to reimburse hosts for damages of up to $1,000,000 (around £766,730), although the company adds that hosts should not consider this as a replacement for owners or renters insurance.
While a host is not required to take out specific landlord insurance, it would be advisable to speak with a specialist broker or insurer to ensure sufficient protection.
Could letting or ‘sharing’ your rented or leasehold property with Airbnb cost you your tenancy or home?
Millions of Airbnb users may have unknowingly breached the terms of their leases, leaving them vulnerable to legal action or the loss of their tenancy.
Most tenancy and leasehold agreements are likely to state that the property may only be used as a private residence. This would prevent tenants from renting out or ‘sharing’ their home for short periods. It is best for people to check their tenancy or leasehold agreements first.
It is not just those renting who should be wary of breaking contracts – mortgage companies may also take a dim view of homeowners offering short-term lettings of their property. It would be wise for owners to contact their mortgage company before offering their home out as they may very well be breaking their mortgage contract. Whilst buy-to-let mortgages allow for assured short-term tenancy, ‘short-term’ is often defined as six months; clearly, Airbnb stays are considerably shorter than this.
What precautions do you need to take to comply with health and safety legislation?
Hosts must ensure that the premises are reasonably safe for visitors. With regards to fire safety, landlords should inform visitors of a fire evacuation route. The Regulatory Reform (Fire Safety) Order 2005 makes landlords responsible for taking steps to protect the people using your premises from the risk of fire. This means that a host should carry out a fire risk assessment and, if necessary, improve the fire safety measures while keeping the risks, and fire safety measures, under review.
If a visitor has suffered an injury at a host’s premises, they may seek to pursue a personal injury claim, particularly if the host has breached their duty of care to the visitor, which subsequently has caused the injury.
As an Airbnb host, do you need to have public liability insurance?
There is no legal obligation to take out public liability insurance to host via Airbnb. However, it would be worthwhile to do so in order to protect yourself – the host – in the event of an injury claim from the visitor.
Disclaimer: This information is for general guidance regarding rights and responsibilities and is not formal legal advice as no lawyer-client relationship has been created.
FWD Consulting: 020 7623 2368
Notes to Editors:
DAS UK Group: www.das.co.uk
The DAS UK Group comprises an insurance company (DAS Legal Expenses Insurance Company Ltd), a law firm (DAS Law), and an after the event (ATE) legal expenses division.
DAS UK introduced legal expenses insurance (LEI) in 1975, protecting individuals and businesses against the unforeseen costs involved in a legal dispute. In 2018 it wrote more than seven million policies.
The company offers a range of insurance and assistance add-on products suitable for landlords, homeowners, motorists, groups and business owners, while it’s after the event legal expenses insurance division offers civil litigation, clinical negligence and personal injury products. In 2013, DAS also acquired its own law firm – DAS Law – enabling it to leverage the firm’s expertise to provide its customers with access to legal advice and representation.
DAS UK is part of the ERGO Group, one of Europe’s largest insurance groups (the majority shareholder in ERGO is Munich Re, one of the world’s largest reinsurers).
DAS UK Group Twitter: https://twitter.com/DASLegalUK
DAS UK Group Facebook: www.facebook.com/DASUKGroup/
DAS UK Group LinkedIn: www.linkedin.com/company/das-legal-expenses-insurance/
DAS Law LinkedIn: www.linkedin.com/company/das-law/