11 August 2021
As the lockdown restrictions are being eased, many holiday makers are finally able to make plans for a well-deserved summer break. With restrictions on international travel changing and travellers not wishing to be caught out, it is expected that many will choose to remain in the UK for the summer. This has led to an increase in the number of homeowners choosing to ‘rent’ their properties through Airbnb and other letting sites and take advantage of the 2021 summer staycation season.
However, for many homeowners, this could 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, solicitor at DAS Law, answers the most important questions if you are tempted to take advantage of the staycation boom.
If my property or belongings are damaged or stolen, will my home and contents insurance cover me?
It is unlikely; insurers will not usually have catered for paying guests when arranging and pricing the policy. The host will need to clarify with their insurer as to whether their policy would be sufficient to cover any losses. Airbnb does offer a ‘host guarantee’ whereby the firm promises to reimburse hosts for damages of up to $1,000,000 (or its equivalent in GBP based on the exchange rate of the day), 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’ my rented or leasehold property with Airbnb or another site breach the terms of my lease?
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.
The vast majority of 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. Anyone letting their property should therefore check their tenancy or leasehold agreements first.
However, it’s 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 I 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 the 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, he/she 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 foreseeable injury.
As an Airbnb host, do I 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 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.
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FWD Consulting: 020 7623 2368
Notes to Editors:
About Legal Expenses Insurance
DAS Law is part of the DAS UK Group, the UK’s leading provider of specialist legal expenses insurance. Put simply, if you find yourself in a legal dispute, legal expenses insurance could cover your legal costs, even if your case goes to court.
In the UK, legal expenses insurance is typically bought as an optional ‘add-on’ to other types of insurance such as home and motor, so you don’t generally see it priced as a product on its own (there are also different versions for businesses).
As well as covering your legal costs, legal expenses insurance can also give you access to a legal advice helpline where you can get support from a team of legal professionals who will be able to guide you through any personal legal issue, help you understand your rights, and offer advice on taking any further steps.
About 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/