Part 2- Appeal – is an Airbnb guest a sub-tenant?

In an earlier post here, I reported that an appeal had been filed in the Victorian Supreme Court challenging a decision of a VCAT member holding that the occupation of a room by an AirBnB guest was not a sublease. As a result the VCAT member held that a notice to vacate served by the landlord on the head tenant was invalid as it alleged that the head tenant had sub-let without the landlord’s consent.

His Honour Justice Croft today handed down a decision overturning the Tribunal’s finding and substituting his own decision that the occupation by the AirBnB guest was a sublease. It follows that the landlord’s notice to vacate was valid.

Many in the leasing community will, no doubt, treat this as a finding that all AirBnB stays are in fact leases or subleases with implications for whether the head tenant has sub-let without consent.

However, his Honour made the following observations, both at the end of trial, and again at the conclusion of the courts judgment.

First, this is not a case on the merits of AirBnB arrangements. Neither is it a case on whether or not AirBnB arrangements might be said to be “illegal”—either in some particular or some general, non-legal, sense. Rather it is a case, on appeal, which raises for determination—directly or indirectly—the legal character of this particular AirBnB arrangement and any consequences this characterisation may have in the context of the terms of the lease of the apartment concerned.

Secondly, the context provided by the terms of the particular apartment lease are important. Although this apartment lease is a residential lease, many commercial leases restrict the tenant from sub-leasing, assigning the lease, granting any licence to occupy all or part of the leased premises or otherwise parting with possession without the landlord’s prior consent. Broad terms such as this would prevent, for example, sub-letting or licensing without the landlord’s consent and would avoid the need—as in the present case—to characterise the nature of the same arrangement like the AirBnB arrangement for occupation of the whole of the leased premises as a sub-lease or a licence.

No doubt, more will be said about the significance of this decision in due course.

A copy of the decision is available here.

Sam Hopper and Michael Kriewaldt