Wellington landlord wins precedent setting Airbnb District Court appeal
The landlord of a Wellington apartment has been awarded the full amount of the tenant’s profits from Airbnb subletting in what is believed to be a precedent setting District Court appeal.
The tenant, Jeff Walter Patterson, had illegally sublet the Bellagio apartment, in central Wellington, on 54 occasions over six months in 2017.
Earlier this year, the Tenancy Tribunal awarded the landlord only $2,150 of the $13,695 profits Patterson is believed to have made through the subletting platform.
The Tenancy Tribunal took into account net profit and ‘services fees’ the tenant would have incurred.
But District Court Judge Chris Tuohy said that figure was wrong, and “it is self-evident that the Tribunal made errors in its calculations.”
Judge Tuohy subtracted $6,107.30 off the Airbnb profits for rent paid and other expenses.
As a result, Mr Patterson has now been ordered to pay the landlord $7, 587 for profits made through Airbnb, on top of the $9,369.29 he already owed for rent arrears, exemplary damages and the cost of replacing a door. A further $6000 was awarded to the owner for legal costs.
The total debt owed to the owners is $22, 950.99.
Keith Powell, from Nice Place Property Management, who represented the owners with a legal counsel, said this District Court judgement will now hold precedent against all tenants who breach a subletting clause in their tenancy agreement.
“It is clearly precedent setting. My legal councel is very happy with it,” Powell told tenancy.co.nz
“It does send a clear message to tenants that they will not get away with illegal subletting.
“There was a subletting clause in the agreement that said the tenant should not use Airbnb so the tenant has no excuse. There is no way he could have misunderstood it.”
Judge Tuohy agreed and said that tenants shouldn’t be allowed to profit through illegal subletting.
“The term breached was as clear as a bell,” Tuohy wrote in his judgement. “It is obvious from the figures in this case that a tenant could make several hundred dollars profits each week simply by renting the apartment and then subletting it through Airbnb continuously in blatant breach of the tenancy agreement.”
Powell is now pursuing the debt owed for the owners.