Airbnb lettings- Are you in breach of your Lease?

A very important Upper Tribunal Decision has concluded that in most instances short term lettings such as Airbnb lettings will be in breach of residential flat leases. This is welcome news to landlords and many owner occupier flat owners who have complained of problems arising out of Airbnb-type short term lets, but unwelcome news to others.

"In order for a property to be used as the occupier's private residence, there must be a degree of permanence going beyond being there for a weekend or a few nights in the week. Granting very short term lettings (days and weeks rather than months) … is a breach of this covenant."

In recent years, there has been an increase in very short lettings of prime Central London residential flats which can be very profitable - but maybe not for much longer!

Airbnb has increased in popularity over the recent years and many thousands of properties are listed on Airbnb as well as other holiday/short term letting websites. The recent case of Nemcova v Fairfield Rents Limited involved a tenant in a large block of flats letting out her property via Airbnb to the disapproval of other tenants in the block who had made many complaints to the Landlord. The other leaseholders were concerned about strangers regularly entering the block. They asked the freeholder to take action.

It is standard for residential leases to contain the following clauses "Not to use the property for any purposes whatsoever other than as a private residence". The Tribunal considered a number of factors including:-

  • The length of the letting- a person who is in the property for a week or two is not in permanent residence. This is the critical factor.
  • The impact on other lessees in the block.
  • Nature of the occupation
  • Whether there is a clause in the lease that prohibits sub-letting- if so, then this increases the chances of an Airbnb letting being in breach.

The Tribunal concluded that their interpretation of the private residence clause in the lease is that short term lets were in breach. Judge Stuart Bridge said: "In order for a property to be used as the occupier's private residence, there must be a degree of permanence going beyond being there for a weekend or a few nights in the week. Granting very short term lettings (days and weeks rather than months) … is a breach of this covenant."

Often leases contain covenants requiring freeholders to take action to enforce the covenants in the other leases, as in this case. Each case will depend on the exact wording of the lease and facts surrounding the lettings. All factors will be taken into account but it does seem that the longer the letting the less danger there is of there being a breach.

Whether you are a landlord or tenant I will be happy to advise you. For further information please contact me at [email protected].