Thanks to the popularity of short term lettings, we are benefiting from a wealth of choice and flexibility in holiday accommodation. Wherever the destination, there will certainly be unique properties available at reasonable prices through short term lettings of private homes. This has proved to be a highly successful formula which has produced great results for most hosts. However, there are a few hidden legal pitfalls that prospective hosts should watch out for.
In particular, leaseholders (including long leaseholders) should check the terms of their lease for restrictions on use. Last year, the Upper Tribunal held in Nemcova v Fairfield Rents Ltd that a long leaseholder of a residential flat breached her lease by sub-letting her flat, as the lease required it to be used as “a private residence“. Although the lease did not state that it had to be the tenant’s own private residence, the Upper Tribunal considered that there must be a degree of permanence. As the short term occupation was transient, the judge concluded that the occupiers would not have considered the flat as their private residence even for the time being.
In Bermondsey Exchange Freeholders Limited v Kevin Conway, a landlord obtained a four-year injunction restricting its tenant from sub-letting his flat. The court found that the tenant had breached the terms of the lease, which included a requirement to use the property as a residential flat for a single family and not to sub-let without the landlord’s consent.
In April 2017, several newspapers reported on the case of Ashley Gardens Freeholds Limited v Linda Marinelli Landor which involved an 81-year old “bohemian” poet who let out her Westminster apartment for late night “soirees” and, on one occasion, flamenco dancing. After repeated breaches of the lease requirement not to “use other than a private residential flat in one occupation only“, the judge held that the tenant had “demonstrated over very many years that she either does not understand the rules or feels that they do not apply to her“. The court ordered forfeiture, but with a six-month delay to give the tenant an opportunity to sell the flat and avoid the complete loss of a valuable asset.
With online platforms in this area rapidly expanding, there are plenty of opportunities to enjoy – and potentially profit from – short term lettings. However, the court rulings are a reminder to leasehold owners to check what restrictions might exist in their leases before opening their homes to holiday makers.