Legal grey area of residents subletting Dubai homes on Airbnb
DUBAI // Property rental website Airbnb.com offers a bed for the night for as little as Dh37, but residents using it to rent out their homes – or parts of them – could be liable for a far bigger bill.
More than 1,000 Dubai properties are on Airbnb, which allows people to let an entire home, private room or sofa-bed at the click of a mouse.
Listings range from plush villas on The Palm Jumeirah to shared dorm rooms in Bur Dubai.
Yet many users, often unwittingly, are seeking to rent out homes illegally or sublet property without their landlord’s permission, in what one Dubai property expert called a “legal grey area”.
Experts say they could be liable to fines of up to Dh100,000 if not licensed, amid a series of legal challenges against Airbnb overseas, including in the US and Spain.
In Dubai, tenants subletting flats without written permission from their landlord can face eviction.
Many Airbnb users show scant awareness that they could be breaking the law, or the terms of their tenancy agreements, or both.
One user, who is advertising rooms in a flat near Dubai’s financial centre, said she was unaware of the registration rules and had no permission to sublet from her landlord.
“As it is a normal procedure in my country I assumed it would be the same here,” she said.
Nick Clayson, partner at Norton Rose Fulbright law firm in Dubai, said renting out a property without registering it with the Department of Tourism and Commerce Marketing could attract large fines.
“The regulatory regime provides for fines of between Dh200 and Dh20,000, with repeat offenders potentially liable for fines of up to Dh100,000,” said Mr Clayson, who is head of the firm’s property team.
He was talking about the market, not Airbnb specifically.
One expatriate in Dubai, who has three rental properties listed on Airbnb, inlcuding one in Dubai, says he makes a six-figure sum each year through the website, with a list of clients including VIPs.
“It’s a fantastic platform,” said the German expatriate Christian, who would not give his last name.
Department rules stated that only entire properties can be rented out, meaning a licence is unlikely to be issued to those renting a sofa or spare room, as is common on Airbnb, Mr Clayson said.
Other complications for those looking to sublet their homes include rules imposed by community developers, and the fact that residential mortgages usually restrict such activity.
Jazz Moman, associate in the property group at Eversheds Law Firm in Dubai, said there was a “grey area” in the law dealing with the rental of holiday homes.
Landlords wishing to let their properties on a regular basis are definitely required to register with the department, but the rules are less clear regarding those looking to sublet their properties on a casual basis, Mr Moman said.
But in that case, a tenant subletting a property would still require a landlord’s permission, he said.
“In most cases a tenant will be prohibited altogether from being able to sublet,” Mr Moman said.
“As a general point, it is worth noting that users could face criminal action if unmarried men and women stay together in private residences, or hotels.”
Of Airbnb users contacted by The National who were offering more than one property, none had a department licence. And none of those contacted who are tenants had sought permission from their landlords.
“I’ve often wondered how Airbnb is operational here but so many people are registered,” said one Airbnb user with seven properties listed.
Airbnb has faced several challenges in New York, where the laws prohibit apartment rentals for fewer than 30 days without the owner being present.
About two-thirds of the city’s 19,522 Airbnb listings are illegal, the New York state attorney general’s office said.
Further problems for Airbnb arose in Barcelona, where authorities fined the company €30,000 (Dh147,500) for breaching local laws stating flats rented to tourists must be registered.
Dino Wilkinson, partner at Norton Rose Fulbright in Abu Dhabi, said several new web services including Airbnb were “causing headaches” for regulators as they moved into new markets.
Mr Wilkinson pointed to the taxi-request service Uber, internet phone services such as Skype and daily-deal websites such as Groupon as being among those that have come under scrutiny in various countries.
“With limited in-country assets or workforce for many of these businesses, there is often little that the local authorities can do to enforce UAE laws and regulations against the companies,” he said.
A spokesman for Airbnb said: “The laws governing home sharing around the world can be confusing and we ask all of our hosts to certify that they will follow their local laws and regulations.
“We know home-sharing makes communities better places to live, work and visit, and we’re working for clear, fair progressive rules in communities around the world.”
The Department of Tourism and Commerce Marketing was unavailable for comment.
Updated: August 15, 2014 04:00 AM