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Beviss and Beckingsale
Mark Ollier

Airbnb Type Lettings in Leasehold Properties

Posted by Mark Ollier on October 20th 2016 in All , COMMERCIAL PROPERTY , SERVICES FOR BUSINESSES .

A Tribunal case has been reported about using a residential flat for Airbnb accommodation. In this case a Lease contained a covenant not use the premises… “for any purpose whatsoever other than as a private residence”.

Air Bnb is a letting room website – (there are others!) – whereby ordinary members of the public can offer short term lettings for holiday or business use. It is a massive phenomenon.

In this case the owner of the flat advertised on the internet the availability of the property for short term lettings. The Landlord objected.  The premises were let out for a night or two at a time mainly to business travellers for about 90 days a year

The Tribunal noted that the Lease required the property to be used as “a private residence”. There had to be a connection between the occupier and the resident such that the occupier would think of it as his/her residence even if it was for a short period of time. In order words, for the covenant to be observed, the occupier for the time being must be using this as his/her private residence. The tribunal then went on to conclude in that in granting very short term lettings for days and weeks rather than months the flat owner had done in this case had breached the covenant.

Unless the Appeal Court intervenes, there now seems to be clear and binding authority that a lease covenant to only use the property as a “private residence” is breached by short term holiday or Airbnb style letting. The clause would not necessarily prohibit longer sub-lettings or a similar tenancy.

Anyone promoting Airbnb lettings in a leasehold flat should immediately check their Lease covenants because if the freeholder decides to take action for a breach of the terms of the Lease on that clause, this case is a clear precedent that they may be successful.