The internet is a truly wonderful thing. It has made almost all of us more productive, brought the world’s knowledge to our fingertips and made so many things so much easier. Just think about what the internet has done for us landlords in terms of advertising, researching properties and screening tenants. It is amazing to think how different things were just 10 to 15 years ago.
The internet has also made it much easier to interact and connect with people. Most of the time this is a good thing, but this ease of connection can also present some interesting problems for us landlords. It is now quite easy, for example, for tenants to reach out to others and attempt to sublet your properties. Tenants can potentially turn your property into a hotel or youth hostel, and this is something that should be on every landlord’s mind.
If you are not familiar with sites like Airbnb.com or Couchsurfing.com, I encourage you to check them out. They are actually pretty cool sites, and I applaud the entrepreneurial spirit that brought them to us. I actually use Airbnb when I am planning a trip to search for potential places to stay. These sites, along with others like Uber and Lyft, are for me what make the internet a truly revolutionary thing and I enjoy the fact that they are breaking long standing hotel and taxi monopolies.
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Despite providing wonderful properties, these sites do present potential problems to landlords. If you have an entrepreneurial tenant (don’t get me wrong, as I am all for tenants finding ways to pay me!) using these sites to sublet your property, you should be concerned. Why? How do you know who is staying at your property? Have they been properly screened like your tenant was? The potential now exists for dozens of people to be passing through your property at almost any time. I have experienced this myself when a former tenant used Couchsurfing at one of my properties. There were sometimes two or three people staying there every night!
In legal terms, this action is called subletting. Subletting (or subleasing) is defined as your tenant conveying the same rights that you conveyed to some third party for a shorter period of time. In essence, they re-rent your property out for a few days or weeks for a specified fee.
As you can begin to imagine, subleasing can give rise to all sorts of issues. Who is coming and going? Are they convicted felons? Axe murders? What liability will you have? Who has the keys to the property? Has everyone returned the keys or are their numerous sets out there floating around? What if they do not leave? What about the extra wear and tear? Who pays for the increased utility usage? Where do they park? The list could go on and on.
Clause Forbidding Subletting
Smarter landlords do not allow subletting. They put a clause in their lease which specifically forbids it. Here is the language taken directly from my lease:
No Subletting: Tenant has no right to sublease or assign Tenant’s rights under the Lease without the written consent of Manager.
Make sure that you have some sort of similar language in your lease to protect you.
Even smarter landlords will be sure to mention sites like Airbnb or Couchsurfing in their leases or house rules and strongly forbid their use on their property. After all, not every tenant will know or understand what subletting is and may innocently think there is nothing wrong with doing this on your property. I can just hear my tenants now: “I did not know that was subletting.”
Even with these clauses and house rules, every landlord should be vigilant as some tenants will still try to do it, especially if your property is located in or near a major city or tourist area. You should surf these websites every once in a while. See if any of the listings match your properties. You might be surprised what you find.
Also, let your other tenants be your eyes and ears. They often know what is going on and will have the same concerns about strangers on the property that you do. If you get complaints of numerous people coming and going, take some time and investigate it. Yes, your tenant may just be really popular and have a lot of friends, but there may be other things going on as well. Perhaps a stern warning and the knowledge that you are aware will solve the problem.
Ever had any experience with tenants using these websites on your property?
Please share with your comments.