B&B host ordered to pay landlord 700,000 Yen

The host of an illegal B&B operating out of an apartment building in Osaka has been ordered to pay 700,000 Yen (approx. 6,360 USD) in compensation to their landlord. The owner of the apartment building filed a suit in the Osaka District Court seeking 1,400,000 Yen from the tenant who was illegally subletting the apartment to tourists.

According to the landlord, the 41 square meter apartment was rented to a company based in Kyoto. The terms of the lease agreement limited the use of the apartment to residential only and prohibited any form of sub-leasing.

In early 2016, the landlord discovered the room was being illegally rented out as a B&B after a neighbouring tenant complained about noise during the night from the occupants of the room. The landlord requested that they immediately cease sub-letting the apartment, but the Kyoto-based tenant said they had already accepted further guest reservations and could not cancel them. They moved out a month later.

The landlord sought compensation to cover the move-out costs for the neighboring tenant who also left due to noise and the loss of revenue due to the now-vacant apartments. The parties reached a settlement on May 26.

The Asahi Shimbun reported that Osaka City has issued cease-operation orders to 722 illegal short-term accommodation operators across the city as at the end of March 2017. In October 2016, the city allowed this type of accommodation to operate out of private homes in selected areas to approved hosts who meet a variety of requirements. So far, 259 hosts have been approved. There are over 13,000 listings on Airbnb, indicating many may be operating illegally.

The current penalty for violating the Hotel Business Law by operating an illegal B&B is 30,000 Yen or less. However, the new revision to the law will see this penalty increased to 1,000,000 Yen (approx. 9,000 USD).

Sources:
The Sankei Shimbun, June 1, 2017.
The Asahi Shimbun, May 26, 2017.