Are you breaching your lease by letting your flat on Airbnb?
With Airbnb’s recent tenth anniversary and it’s increasing popularity with the traveller, for many people letting out a room or the entire property while they are away or on a regular basis is surely a win-win situation; you get some additional income and maybe a helpful aid to paying off the mortgage.
However thousands of people who use the Airbnb online site to rent out their leasehold property may be unknowingly breaching their lease and at risk of losing their homes, according to a recent ruling from the Upper Tribunal (Lands Chamber), the highest property court in the land.
Check the lease first
Your lease is the first document you need to check to see if there are any restrictions on sub-letting. Tenants and owners of flats whose leases state that the property must be used as a ‘private residence’ may now be prevented from renting out their homes for short terms. This clause is extremely common in leases. This does not mean you are forbidden to sub-let, you may just need the permission of the freeholder. The freeholder may refuse this request, or they may grant permission but could charge you for sub-letting the property.
Consequences of breaching the lease.
‘The implications are enormous‘ says Nicole Rogers, a solicitor at DAS Law. Millions of Airbnb hosts may have unwittingly breached the terms of their lease by hosting guests and the new ruling may now pave the way for freeholders to take action.
The verdict came after a case where a woman fell out with her neighbours in a development in North London when she let out her flat via Airbnb and other similar websites. Residents asked the Freeholder of the block if this was permissible and the case went to court.
The key question the court considered was whether a temporary occupation of an entire property by an Airbnb guest is consistent with the definition of the property as ‘ a private residence’ – and ruled it was not.
