In brief: A recent VCAT decision involving
tenants who made their rental property available for hire on
Airbnb, has important ramifications for landlords in Victoria.
What you need to know:
Under the Residential Tenancies Act 1997 (Vic),
landlords cannot evict tenants for improperly sub-leasing a
property if they use Airbnb to rent it out for short term
Landlords and managing agents should consider inserting new
special conditions in their residential tenancy agreements,
prohibiting renting the property out for short term stays.
Landlords should rely on other sections in the Residential
Tenancies Act 1997 (Vic) for terminating a lease if a tenant
is caught renting the property out for short term stays without
Damages caused by the tenant renting out a property for short
term stays might fall outside the scope of the landlord's
The Victorian Civil and Administrative Tribunal
(VCAT) has found in the matter of Swan v
Uecker (Residential Tenancies)  VCAT 483 that renting
out a property on Airbnb is not a lease or sub-lease, but a
The landlord and tenants entered into a 12 month residential
tenancy agreement on 21 August 2015 for an apartment in Fitzroy
Street, St Kilda (Premises). On 12 January 2016,
the landlord served a Notice to Vacate on the tenants with a
termination date of 2 February 2016. The reason provided in the
Notice to Vacate stated:
"You have assigned or sublet part or all of the
Premises without my permission or purported to.
Residents in the building have confirmed that you are using
Airbnb to rent out a room of the apartment without prior consent of
I have checked Airbnb website and have confirmed that this
is the case.
The Landlord requires you to vacate the Premises on or
before 2 February 2016".
On 1 February 2016, the landlord applied to VCAT for a
possession order. The tenants opposed the landlord's
application and submitted to VCAT that the Notice to Vacate was
invalid because Airbnb is a licence and not a lease and as such
there had been no assignment or sub-letting.
VCAT considered section 253 of the Residential Tenancies Act
1997 (Vic) which states:
Assignment of sub-letting without
A landlord may give a tenant a notice to vacate rented
premises if the tenant has assigned or sub-let their tenancy
without the landlord's consent.
The notice must specify a termination date that is not less
than 14 days after the date on which the notice is given.
VCAT was satisfied that the landlord had not provided her
consent to the use of the Premises for Airbnb and that no consent
had ever been sought by the tenants.
However, the critical issue for VCAT was whether the Airbnb
rental was a licence to occupy and use, all or part of, the rented
Premises and was not an assignment or sublet of the tenancy
The tenants relied on the wording of the Airbnb agreement which
used the word "licence". They also submitted that each
Airbnb stay was no longer than five days, that the tenants retained
the Premises as their principal residence at all relevant times,
and that they had the right to revoke the licence and eject Airbnb
guests who overstayed.
Ultimately, VCAT was satisfied that Airbnb guests did not have
exclusive possession of the Premises and therefore, the nature of
the legal relationship between the tenants and Airbnb guests was
not a tenancy but a licence to occupy.
As a result, the landlord's Notice to Vacate was held to be
The Landlord is appealing VCAT's decision to the Supreme
Court of Victoria. It is expected to be heard later this year.
Until then landlords and managing agents should be extremely
cautious when renting out residential premises.
Tenants should also tread carefully if renting out properties
for short term stays as the law in this area is far from
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.Madgwicks is a member
of Meritas, one of the world's largest law firm
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