Westminster Council have recently won an appeal against their decision to evict a tenant and recover unlawful profit of £100k made letting a central London council flat since 2013. The tenant created a fake online identity “Lara” but the council investigations were able to link the listing via reviews to the defendant Toby Harman and his bank statements subsequently proved that he had been in receipt of significant payments from Airbnb for a number of years.
Although there are a number of factors that make the case unusual; not least the location and therefore the sheer scale of fraudulent profits available, the case, if sufficiently publicised, does serve as: a warning to others abusing social housing anywhere. It also creates further useful legal precedent and it could act as an encouragement to others Councils with similar social housing issues to pursue such investigation, despite the level of resources required and the lack of direct cooperation from platform providers. We would of course argue that the lack of willing cooperation adds unnecessarily to that resource issue and in turn strengthen the industry led case to Government for greater transparency around who letting what, when to whom.
Westminster Council like many others are calling for a national short-term letting registration scheme to help discourage illegal practices and to aid detection. Its specifically created housing standards task force is currently investigating over 1,500 short-term rental issues, although it is not clear to us just how many of those are sharing economy related.
It is also worth noting that most private residential landlords would not allow their properties to be sublet, in part to avoid problems of falling foul of HMO licencing provisions but also for reasons like invalidating property insurance and from the point of view of protecting the interests and the safety of other residents. “Almost all well drafted Assured Shorthold Tenancy agreements include a provision that bans the act, which would cover listing rooms on Airbnb”. It is not uncommon for private tenants to be taken to court for breaching tenancy rules, including subletting.
Problems around the increasing incidents of headline grabbing, deliberate misuse of sharing accommodation by the customer, for example, as venues for stag and hen does, through pop up brothels, to illegal raves sites, may serve to make detection and subsequent action by private (and public) landlords all the more common in future.
A press article on the Westminster case has been added to the “Sharing economy and OTA” page that can be accessed from the main menu tab, or go direct to the page at: