Supply and Demand: The push to understand building energy use | EXPLORE→
Landlord - Interior Design Services

Technology is the Cause and the Cure for Illegitimate Subletting

The sharing economy has changed the world for the better. It has given people everywhere the ability to turn their assets and their time into money. It has opened up parts of the economy to people that never had access before. But it has also opened up a ways to share what is legally not theirs to share as is the case with many subletting situations on Airbnb. Illegal subletting is becoming a growing cause for eviction, especially since the creation of home sharing websites such as Airbnb. In some areas, surveys estimate that over one in three listings on Airbnb are sublets. Moreover, it is estimated that over a third of UK tenants who sublet do not inform their landlord of this decision. 

While people have a lot of rights guaranteed to them in their own homes, the right to profit from it, called the right of disposition, is not renting one of them. The reason is risk. The landlord carries more risk, as they are ultimately responsible for the occupants and the condition of the building, without any of the offsetting gain. Airbnb knows this. They have gone as far as to fine a tenant over £100,000 for illegally hosting on their platform. 

The phenomenon of illegitimate subletting already looms large but is likely only in its infancy as Airbnb becomes more popular worldwide. Any property owner with any residential in their portfolio should be thinking about the increased risk exposure it creates. In response, many startups have arisen to tackle this problem. New York based startup Flip is offering help to tenants in getting out of their lease or finding a sublet. The firm helps tenants and landlords with the legality of subletting and has customized legal documents for every scenario. Not only do they provide a platform for tenants to find subletters and vice versa, but they also help renters get out of their lease agreements. This feature is incredibly helpful for university students, for example, as many landlords in college towns are beginning to only offer 12 month leases rather than 9 months leases that end at the beginning of summer break.

Pillow, a startup recently acquired by HomeAway (Expedia Group), is another example of a solution to the issue. They partner with building owners to allow Airbnb hosting through their platform, offering them control over inevitable short-term rentals of their property. Our London based startup SharenSplit is similar, we created a technology to give any tenant the ability to sublet on Airbnb through its platform by facilitating the consent process with their landlord. A dashboard to allow tenants to make changes to their listing that will instantly update on the Airbnb website. Tenants can also chat with guests and manage all other aspects of the listing in real-time. Although landlords cannot manage the listing, they do get the advantages of transparency and compensation. Landlords receive 20 percent of the revenue earned from Airbnb while tenants retain 70 (the remaining ten is our compensation). This ensures that all parties are being compensated fairly and the landlord is able to profit from the extra liability and use. 

Short term and furnished renting is on the rise, as can clearly be seen buy the recent built-to-rent craze. The number of completed build-to-rent developments in the UK rose by over a third from the second quarter of 2018 to the same point in 2019. As short term renting becomes more common it will only create a larger market for sublets. Technology created this problem, connecting the world via shared resources, but it might also solve it. As solutions become more available we might start to see a change in attitude of many landlords and short term subletting might go from being a liability from risk to an asset from profit.

Image - Design