Perplexed by property law? Relax, Solicitor Beatrice Gallivan is here to answer your most pressing questions…
Q: I am a lessee of a flat in North London under a long lease. I have started travelling for work most weeks and when I am not in London I have been letting out my flat on Airbnb for a few days at a time to people visiting London to make some extra money, although I am still residing at the property when I am at home. However, my landlord has said that he is not happy and that it is prohibited. Am I allowed to do this?
A: Given how rapidly Airbnb has grown - it has more than 60 million users and half a million stays per night worldwide and over 300 properties for let on the site in Central London alone - this scenario is now likely to be a common one. Airbnb is used regularly by many people to help them pay off their mortgages and make some extra money if they travel for work or other reasons.
The first port of call in this situation is to check the terms of your lease. Does it include a restriction not to use the property as anything other than "a private residence"? This is a very common, although not universal, provision in most long residential leases. If it does, your landlord may have the right to prevent you from letting your flat on Airbnb, even if it is only for a few days a time.
In a recent Upper Tribunal judgment (Nemcova v Fairfield Rents) it was decided that a lease covenant only to use a property as "a private residence" is breached by short term, Airbnb-style, lettings. Where a person is occupying a property for a matter of days and then leaving, the Tribunal decided that it cannot be said that the property is being used by that person as his or her private residence. The "private residence" clause would not necessarily prohibit longer sub-letting, but other clauses might have this effect. In the Nemcova judgment the Tribunal expressly made clear that the decision in that case rested on particular facts and lease terms so the precise terms of your lease and the facts relating to the proposed letting would need to be considered carefully before any decision is made about a short-term sub-let.
However, by short-term letting your property, you may also be using it for business use rather than purely residential which may be prohibited under your lease, and you may also be at risk of being in breach of planning permission and any mortgage conditions.
If you are in breach, your landlord will have the option of making an application for an injunction to prevent you from continuing to let your property. He could also take steps to forfeit your lease and claim the costs against you should he be successful. If the terms of your lease do make it risky to offer short-term sub-lets it is possible that your landlord would be prepared to consider varying the terms of your lease to permit such use. However, this would very likely involve payment of a significant premium to your landlord together with professional costs, Stamp Duty Land Tax and Land Registry fees. There is also the risk that a landlord alerted to the issue might be inclined to refuse the proposal and, instead, take a more scrupulous interest in what you are doing with your flat and whether you are breaching any of the covenants in your lease.