By Simon Burdett-Dixon
The use of residential property for AirBnB style lettings has surged in popularity in recent years with AirBnB alone accounting for c.2 million available properties worldwide, including nearly 80,000 based in the UK.
Long lease owners (e.g. flat/maisonette owners) will want to ensure that using their property in this way does not put them in breach of the terms of their lease. This is of course in addition to the other considerations (e.g. planning, income tax, etc.) faced by freeholders and long lease owners alike who use their property for this type of letting.
The question of whether AirBnB style letting could amount to a breach of a long lease has recently come before the Courts (the Upper Tribunal (Lands Chamber)). The lease in question prohibited use for any purpose other than 'as a private residence' even though it did not prohibit subletting.
The Court decided that the short-term nature of AirBnB style letting meant that the long lease owner was in breach of use clause in their lease. This was because the periods of occupation were so brief and fleeting that they could not be described as use 'as a private residence', by the AirBnB occupiers, which would require greater element of longevity.
For the same reason, a longer period of letting, e.g. under an Assured Shorthold Tenancy agreement was said to be unlikely to amount to a breach of this kind of use clause (although the tenant will need to check what the lease says on subletting).
This decision is significant for flat/maisonette owners who use their property for AirBnB style lettings and it is recommended that such owners investigate the use clauses in their lease to understand whether or not they may be in breach.
In turn, this is important because the Landlord may be able to start a procedure to seek to terminate the lease (also known as 'forfeiture') if the flat/maisonette owner is in breach of their lease.
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