Leasehold and Airbnb

Leaseholder who Airbnb – Understand your lease.

Leaseholders need to ensure that the lease does not have any clauses preventing them from letting as a holiday let on Airbnb. Very often there is a clause within the lease that specifies the property is not to be used as a Holiday let or to be used as a single private residence only. The main standard clauses which leaseholders could potentially breach, by letting the property on Airbnb, would be the following:

(a) Change of use
There have been a few decisions which have discussed the issue of whether the use of premises to let on Airbnb is in breach of any clause in a lease which restricts the use of the property as a private residence only or prohibits carrying out any business in the premises.

One such example is the recent case of Nemcova v Fairfield Rents Ltd UKUT 303 (LC). The lease in this case stated that the leaseholder was “not to use the premises or permit them to be used for any illegal or immoral purpose or for any other purpose whatsoever otherwise than as private residence.” The Upper Tribunal decided that the clause prohibits all other uses save as a private residence. The clause did not state that the premises are to be used as the private residence of the lessee or the occupier, but as “a private residence”. In other words the clause in the lease would not be breached if the occupier for the time being is using it as his or her private residence. The motive for the occupation and the acceptance of payment is immaterial. What is important is the duration of the letting. Judge Stuart Bridge held that “…for the property to be used as the occupier’s private residence there must be a degree of permanence going beyond being there for a weekend of a few nights in the week.” The lessee in granting short term lettings for days and weeks rather than months had breached the clause in the lease to use the property as a private residence only.

 

 

 

MEDIATION

First and Foremost

Conflicts and disputes between a Landlord and Tenant or a Freeholder and Leaseholder if unresolved will cause stress and the financial cost of action can escalate out of control.

Mediation, if initiated early, can resolve 8 out of 10 disputes cost effectively, and alternative dispute resolution is also encouraged by the Courts.

“Don’t leave it too late to Mediate”