The REIA has delivered a warning to landlords, saying they should contact their insurer before renting out part of their home through online peer-to-peer services.
In their December newsletter, the institute said with Christmas holidays upon us, many homeowners and tenants are considering renting out a room or part of their home to holidaymakers using online booking services.
“Though the idea of meeting new people and earning extra revenue might be appealing, it might also leave some with unintended financial consequences, with homeowners and renters potentially exposed to significant financial loss if things go wrong,” the REIA said.
“Insurance policies may not cover online peer-to-peer house sharing services, leaving home owners, tenants and holidaymakers exposed to risks, and this could impact their home and contents insurance, strata or renter’s insurance policies.
“Further, strata title agreements, tenancy agreements and local government laws might not allow short-term holiday letting.
“Importantly, home owners or renters may not be covered for public liability should a paying guest be injured on the premises,” they added.
The REIA said many insurers regard online holiday rentals as a business activity.
“Policyholders should check whether their insurance covers these activities and whether a more appropriate form of policy, such as landlord’s insurance, is required,” The REIA said. “Some insurers offer policies designed for short-term holiday letting.
“Holidaymakers who rent a home or room using these services might also be surprised to learn their travel insurance policies might not cover them if they are unexpectedly forced to cancel their trip and claim accommodation costs, or if their possessions are stolen or damaged while in the rental property.”