Over the past decade, websites such as Airbnb have become wildly popular, revolutionising many people’s experience of travelling. However, not everyone views this new trend in such a positive light and landlords are often concerned by the idea of their tenants permitting strangers to occupy their property. Moreover, few tenants realise that by participating in these schemes, they may risk being evicted.

This was the subject of the recent case of Iveta Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC) in which the Upper Tribunal (Lands Chamber) had cause to consider whether a tenant under a long lease of a flat was in breach of her user covenant by granting a series of short term lettings.

The flat had been occupied by short term lettings for a period of around 90 days a year, following the tenant advertising its availability online. For the remainder of the time the tenant said she had been staying at the flat herself, although admitted that she had only occupied the flat recently for roughly 75% of the year due to unrelated problems with her neighbours.

The lease contained a covenant preventing the tenant from using the flat, or permitting it to be used, ‘for any purpose whatsoever other than as a private residence’. Beyond this, the lease did not contain any restrictions on underletting the whole, except in the final seven years of the term, which did not apply here.

The Tribunal held that the short term lettings were in breach of the user covenant. It said that although the user covenant could be construed to allow for occupiers other than the tenant (as the user covenant required the flat to be used as ‘a private residence’ and not ‘the private residence’) the duration of the occupation was a crucial factor. It said the concept of residence denotes a degree of permanence that precludes occupancy for only a few days at a time. The occupiers must themselves consider the flat to be their residence, which would be unlikely when they were only staying there for a short period of time, regardless of whether the purpose of their stay was for work or leisure.

A finding such as this that a tenant is in breach of a user covenant in its lease may allow a landlord to commence forfeiture proceedings against its tenant, which would require the tenant to remedy the breach or it could face losing its lease with serious financial consequences.

This case does seem to be a blow for those using short term letting websites (such as Airbnb) in circumstances where their lease appears to prohibit this. However, it reinforces the importance of the wording of covenants in a lease. The Tribunal emphasised that each case is fact-specific and will depend upon the specific construction of the relevant clause.