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Are you thinking about letting your flat out using an "Airbnb" style website?

 

The Upper Tribunal (Lands Chamber) recently considered this issue in Nemcova v Fairfield Rents Ltd [2016] UKUT303 and held that a tenant breached a covenant in their long lease of a flat that prohibited use for any purpose other than as a private residence.

The Facts:-

The Tenant (T) owned a long lease of a flat.  The lease contained a fairly typical covenant not to use the flat for any purpose other than as a private residence.  T had advertised the availability of the flat for short term lettings on the internet and had set up a website advertising the flat as an alternative to hotels.  T had granted a series of lettings for short periods, almost all to business visitors working in London (as opposed to holiday lets).

The Landlord (L) sought a declaration from the Tribunal that T had breached the covenants and the First Tier Tribunal found in the L’s favour.  The T appealed against that decision to the Upper Tribunal (Lands Chamber).

The Decision:-

The Upper Tribunal found that the duration of the occupier’s occupation as a private residence was material as to whether the covenant to use the flat as a private residence had been observed.  The Upper Tribunal ruled that there had to be a degree of permanence in the occupancy in order for a property to be deemed to be the occupiers’ private residence and this would require residence for more than a weekend or a few nights in the week.  In this case the occupation was so transient that the occupier would not consider the property as being their private residence.

The Upper Tribunal therefore held that T had breached the covenant not to use the flat for any purpose other than as a private residence by granting such short term lettings.

The Upper Tribunal stated that its decision was based on its facts and the construction of the lease in question. However, it is an interesting decision given both the increasing popularity for flat owners to advertise their properties on internet lettings sites as alternatives to hotels and the fact that the covenant in question is fairly standard in residential leases.

Disclaimer:  This article is not intended to constitute legal advice.  For legal advice in connection with the above, please contact us directly.

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