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The 5 rules of illegal subletting prevention

By Tim Neary
27 February 2018 | 10 minute read
decisions 850

For property managers, illegal subletting is a constant background worry. No matter how well you vet your tenants, there’s always the chance one will rent out a room, or their entire place, to a stranger.

Co-founder of BnbGuard Reuben Schwarz said that the risks involved are large.

“While the tenant gets some extra cash from this, your customers only get the extra wear and tear and higher risk of out-of-control parties, squatters and uninsured property damage — either because the guest isn’t on the lease or because the home is being used commercially,” Mr Schwarz said.

“There’s even the chance a property you manage will become a pop-up brothel for a night.”

He added that the spread of short-term holiday rental platforms has exacerbated the problem.

“It used to be just the tourist hotspots you had to worry about. Now it can happen anywhere.

“It’s hard to stay on top of illegal subletting. There are lots of sites that tenants can use, and lots of ways they can evade detection. Also, many sites use false addresses to protect their hosts, and many listings are only online for a short period. It takes a long time and some special tricks to be sure.

“It means you often find out about an illegal sublet only after things have gone horribly wrong.”

Mr Schwarz offers five preventative measures to catch this practice early.

1. Look for clues 

Look for tourist pamphlets in the living room, coffee/tea equipment in the bedrooms and anything else that would suit a BnB more than a home.

2. Be sceptical 

You already take care to rent only to the best tenants, but be extra careful of singles or couples looking for large apartments or houses. They may want to rent out the extra rooms for extra cash.

Also be careful of “ghost hosts”, who rent multiple apartments and list them all online, earning a nice income while you and your customers are saddled with the extra costs and risks.

Find a few photos of them online, and then do a Google “search by image” to see if they turn up on Airbnb.

3. Make sure you include no-subletting clauses

Make it clear, too, what kind of activities this clause covers.

Many tenants aren’t even aware that listing their place on Airbnb qualifies as a sublet. Others think it’s their right to do it.

Be absolutely clear in the contract and when you interview them that it won’t be tolerated.

4. Know thy neighbour

They’ll know if strangers are coming and going a lot. And they don’t want an out-of-control party next door as much as you do.

5. Use a monitoring service

It will monitor the web for illegal short-term and long-term rentals for you. It’s affordable for your customers, gives them peace of mind and saves you the time and hassle of doing it all yourself.

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