Short term holiday lets using internet website advertising have become a feature of modern life. Websites like Airbnb have made it easy for property owners to use their properties to generate extra income from such lettings, but neighbours can be less enthused by the increase in noise, disturbance at anti-social hours and the use of common parts by strangers. When the property is subject to a long lease and complaints have been made, landlords will want to know if action can be taken to bring this use to an end by taking legal action.
In 2016, the Upper Tribunal (Lands Chamber) heard the case of Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC) and reached the conclusion that a lessee covenant not to use the premises “for any purpose whatsoever other than as a private residence” would be a breach of covenant if the lessee used the property for short term holiday lets. The reasoning of HHJ Bridge in that case was that if someone was occupying the property for the purpose of a short term holiday let then they were not occupying it as a private residence as such occupation did not have the degree of permanence required to amount to “residence”.
Landlords have taken some comfort following the Nemcova decision that the courts and the tribunals should apply the same reasoning when called upon to determine an action against lessees engaging in Airbnb-style short holiday lets. However, in the case of Triplerose v Beattie & Beattie last year, the First-tier Tribunal reached the surprising conclusion that a similar covenant in the lease of a flat in Newcastle was not breached by the same kind of short term holiday lets. The landlord appealed.
If the original decision had been upheld on appeal in the Upper Tribunal, landlords across England and Wales would have been left in an uncertain position about which of the two Upper Tribunal decisions applied in their case.
The argument of the Beatties (the lessees) in the Triplerose case (which had succeeded in the First-tier Tribunal, was that the interaction of the user and sub-letting lease covenants suggested that the lessee was entitled to let the flat on short term lets provided the flat was not being occupied for the purpose of a business.
The Upper Tribunal handed down its judgment in the Triplerose appeal in June 2020 (Triplerose Ltd v Beattie & Anor [2020] UKUT 180 (LC)) and found that there was, in substance, no meaningful distinction to be drawn between the relevant parts of the Beatties’ lease and those in the Nemcova lease. Properly understood the covenant given by the Beatties not to use the flat “for any purpose other than as a private dwellinghouse for occupation by one family at any one time” was a free-standing one. It was independent of the requirement not to occupy the premises for a business use and the subletting restrictions did not indicate the lessee had any special rights to underlet on a short term basis.
The Triplerose decision is good news for landlords and flat owner-occupiers who might be thinking about taking legal action to stop another lessee from using its premises for short term holiday lets. While the terms of the lease in question will need to be considered carefully, there should now be some confidence that the courts and the tribunals will accept that short term holiday lets are not consistent with the lease covenant to use the premises only as a private residence or private dwellinghouse. Property developers will also, similarly, feel happier that appropriate lease terms can help to prevent short term holiday lets within their development.