Lease or Licence ?
According to s5(1)(c) of the Residential Tenancies Act 1995, as the purpose Airbnb arrangement is for holiday, the Act does not apply. Therefore, the case law principle upheld by High Court that “The key distinction between a lease and a licence is the right of a lessee to exclusive possession of the property” applies here.[1]
In Swan v Uecker[2], the Court accepted landlord’s exclusive possession argument in full and quash VCAT’s decision that the accommodation arrangement in question is mere a licence. The Court held that by means of Airbnb agreement, they have effectively and practically passed that occupation , with all its qualities, to their Airbnb guests. Therefore, the Airbnb arrangement is a lease. [3] In the case, “the critical component of exclusive possession might well be missing, allowing the arrangement to be properly characterised as a licence, not a lease”. [4]
A sublease may be in respect of the whole or part only of the premises.[5] While the whole of premises is rented to guests, the arrangement is more akin to a lease. If the host merely rents a room and remains in occupation during the period, this is more likely to be a licence.[6] A host who rents part of their house, such as a granny flat or lower floor, may have granted a common law lease if the guest is entitled to exclusive possession for the term of the rental.[7]
The Tennant’s Rights
S74(2c) allows landlord to terminate the tenancy agreement on two conditions[12]. Firstly, he has not unreasonably withheld consent. Secondly, it must be issued out with 21 days after he was aware of the assignment. Assigning the residential property to Airbnb client may cause insurance issue to the landlord as the basic home insurance normally will not cover this activity. This could be a reasonable ground to refuse an Airbnb sublease, but we can argue that there are other insurances allowing this AIRBNB in the market and the landlord is unreasonably withheld consent.
Apply for Conciliation
You can apply to the Commissioner of Consumer Affairs for conciliation of the dispute according to s107 [15].
Appeal to SACAT
According to s80(4), you can apply for SACAT appeal any time after receiving the termination notice and before giving possession to the landlord[16]. Under s110(1)(f) the Tribunal on application by you can reinstate rights that have been forfeited or terminated[17].
You have reasonable chance to reinstate the lease agreement before SACAT for the following reasons :
- You are not in breach of the residential tenancy agreement as the sublease is invalid
- You have remedied the breach of the agreement on the evidence that you removed the property from Airbnb and declared the property was no longer available.
- The tenancy has not been validly terminated.
- Evidently it is just and equitable to reinstate the tenancy according to s80(5) on the ground that the breach has been remedied and the tenant will suffer more than the landlord if the lease is terminated.
- According to s8(k) of Covid-19 Emergency Response Act 2020, the SACAT must have regarded to the circumstance of the Covid-19 pandemic to consider the order for possession[18] .
If the landlord is the resident of other states, the case can only be heard in the Magistrates Court [19].
[1] Christensen Sharon, ‘Sharing Your Home in Queensland: Host, Landlord or Innkeeper’ (2016) 6(137) Property Law Review.citing Radaich v Smith (1959) 101 CLR 209; [1959] HCA 45
[2] Swan v Uecker 313 (VSC).
[3] Croft Clyde, ‘Short-Stay Accommodation Arrangement in Victoria: Implications for Owners Corporations, Landlords and Tenants’ (2016) 90(866) Australian Law Journal
[4] Butt Peter, ‘Conveyancing and Property’ 91(84) Australian Law Journal.
[5] Encyclopaedic Australian Legal Dictionary ‘Sublease’.
[6] Christensen Sharon, ‘Sharing Your Home in Queensland: Host, Landlord or Innkeeper’ (2016) 6(137) Property Law Review.(139)
[7] Christensen Sharon, ‘Sharing Your Home in Queensland: Host, Landlord or Innkeeper’ (2016) 6(137) Property Law Review.(141)
[8] Sangha Bibi, Halsbury’s Laws of Australia ‘capacity of Minors’.
[9] lawhandbook sa ‘who can make contract’.
[10] Sangha Bibi, Halsbury’s Laws of Australia ‘capacity of Minors’.
[11] Residential Tenancies Act (SA) 1995.
[12] Residential Tenancies Act (SA) 1995.
[13] Residential Tenancies Act (SA) 1995.
[14] Residential Tenancies Act (SA) 1995.
[15] Residential Tenancies Act (SA) 1995.
[16] Residential Tenancies Act (SA) 1995.
[17] Residential Tenancies Act (SA) 1995.
[18] Covid-19 Emergency Response Act 2020.
[19] Raschke v Firinauskas [2018] SACAT 19 (102).