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  • Rent-to-Rent

    R2R Airbnb - How middlemen protect themselves

    In a R2R situation where LL provides confirmation in his agreement with the middleman that he's happy for the middleman to sublet or short let, and also confirms that all necessary permissions have been obtained from his mortgage lender and freeholder. The middleman then short lets the property on Airbnb etc. relying upon this confirmation from the landlord.

    If it turns out that such permissions have not been obtained from mortgage lender or freeholder and they find out later down the line about the short let, does the middleman have any responsibility in this?

    Clearly in this situation the landlord would be in breach of mortgage terms and/or the lease. However the middleman never enters into such an agreement with the lender or the freeholder. Neither has the middleman ever seen the terms of the landlord's agreements with the latter. The middleman relies upon the landlord's undertaking in doing what he does.

    Does it affect the middleman's position whether the agreement is so structured that a) he is an agent and manages property for LL; or b) he is a tenant with landlord's consent to sublet or short let?

    Just exploring ideas. Thanks for any input.

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    Hi JWW and welcome,

    I don't believe it does per se - although you are offering accommodation that you do not have a full understanding of and therefore, if something happens with regards to the landlord's permissions, then you may not be able to fulfil your bookings.  You would be liable for the fall-out from that.

    R2R SA is best undertaken on freehold properties with no mortgages on them.

    Building a business on hearsay of another person tends to turn out not to be a very sustainable proposition imho.

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