A ‘nice little earner’ could leave tenants at risk of huge damages or even losing their homes.
Airbnb boasts an impressive 60 million guests, across 34,000 cities, in more than 191 countries. This equates to more than 2 million listings worldwide from hosts willing to offer, in the website’s own words, “a flat for a night, a castle for a week or a villa for a month”.
In light of the number of leasehold apartments available in the UK’s housing market, many are being let via Airbnb or similar schemes.
This raises several issues.
Does my lease allow this type of letting?
Residential long leases contain a raft of provisions that govern, restrict and often prohibit certain behaviour or acts in relation to the use of a flat. Although each case will be lease specific, it is likely that in most circumstances, the terms of a lease will be breached by this kind of Airbnb arrangement.
What clauses could be breached?
Most well drafted leases contain a clause stating the flat is to be used as a private residence only and not for any commercial purpose.
It was exactly this kind of clause that the Upper Tribunal considered in the recent case of Nemcova v Fairfield Rents Ltd and it decided the leaseholder had breached a covenant in the lease by granting short term-lettings of days or weeks.
Often, an arrangement of this nature comes to the attention of the landlord (or managing agent) following reports of nuisance. There is an abundance of horror stories from neighbours and flat-owners themselves who have borne witness to varying degrees of antisocial problems and in extreme cases, criminal behaviour.
Again, most well drafted leases contain clauses prohibiting this kind of conduct and leaseholders could well find themselves in breach of these conditions, too.
This is just the tip of the iceberg, however. Such actions may also contravene clauses relating to insurance, sub-letting, notification and many more.
Mortgage conditions
The Airbnb letting model would require consent from your mortgage lender, should you have borrowing on the property.
Without such consent, lettings of this nature are likely to be in breach of the terms of your mortgage, which could result in administration fees, increases to borrowing rates and in extreme cases, a demand for the immediate repayment of the whole mortgage.
Despite Airbnb’s claims that it is “the easiest way for people to monetise their extra space”, it carries huge risks.
Cassandra Zanelli is a partner at Taylor & Emmet
