Airbnb Lettings – The Story Continues

Airbnb hit the headlines back in 2017 when a tenant was taken to Court after advertising her property for short term let in breach of her lease. Further cases since this time have confirmed this as a major issue for consideration when letting out properties as temporary accommodation.

The first reported case that went to Court dealing with Airbnb lettings and the rights of residential freeholders was the case of Linda Landor (The Times, 5 April 2017) which reported that the long leaseholder, Linda Landor, was facing eviction from the flat she owned in Belgravia. 

This followed a decision by Judge Damien Lochrane in the High Court to the effect that running a bed and breakfast was a business which was in breach of the terms of her long lease. In that case it was reported that the running of the business had caused noise and nuisance to other leaseholders well beyond that which was reasonable, and that the lease would be forfeited.

With the continued expansion of short-term letting arrangements through online platforms like Airbnb, this has become a major issue in prime parts of Central London, but also increasingly, the problem is moving out of Central London to all cities.

_{Breach of Covenants}

In each case, the precise terms of the lease need to be examined and the facts of the case are critical. Further legal cases since 2017 have continued to confirm that where a leaseholder lets out a flat as temporary accommodation, they are likely to be in breach of the lease.

In Bermondsey Exchange Freeholders v Ninos Koumetto (as Trustee in Bankruptcy of Mr Conway) the Court held that a leaseholder who was providing short term letting was in breach of the lease. Essentially the Court found that if a leaseholder arranges for their leasehold property to be occupied by third parties whilst the leaseholder is not in occupation, then they are likely to be in breach of the alienation covenant or the covenant not to assign or sub-let without the freeholder’s permission.

Some leases contain a provision that a flat can only be used as a residential flat occupied by one family, or some such similar wording. This requires a degree of permanence, therefore if a property is let often enough, this is likely to be a breach of the user covenant (Nemcova v Fairfield Rents).

_{Nuisance and Forfeiture}

The reason Courts have been willing to make orders against long leaseholders who engage in short-term subletting is the nuisance and disruption caused to other long leaseholders as a result. In the Linda Landor case, the judge found that tourists coming to London were frequently living at the flat for 1 or 2 nights, they would arrive at all hours of the day and night with wheelie suitcases, which on the hard flooring caused noise nuisance as they were wheeled down corridors and then the inevitable chatting in communal corridors which was waking other leaseholders.

The Courts will grant injunctions to prevent this sort of nuisance being caused to the other leaseholders. Other long leaseholders can in some cases force the freeholder to bring an action against the long leaseholder who is engaging in the short term letting in order to stop the nuisance.

_{Further advice}

Any long leaseholder engaging in short-term lettings should take legal advice as to whether they might face a risk of an action being bought against them.

Leaseholders troubled by noise and disturbance caused by temporary lettings should also consider taking legal advice regarding whether they have rights against the nuisance long leaseholder direct or whether they can compel the freeholder to bring such an action.

Planning issues also arise, different cities have different planning regulations, but in London any letting of a flat for more than 90 days a year does require planning permission. Potentially a Local Authority can bring an action against both the landlord and the leaseholder if this is being breached.

_{​​More information}

Our Residential Property Litigation Team have experience of assisting both landlords and leaseholders in this area. Contact us for further advice on your particular circumstances.​

This article was written by Stephen Eccles, Partner at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of March 2019.