Airbnb – Is it a Breach of Your Lease?

Nemcova v Fairfield [2016] UKUT 303 (LC)

Leaseholders Beware!

Airbnb is an online marketplace which allows people to list short term lettings and is becoming increasingly popular across the UK. If the property that is let is a flat that flat is almost certainly going to be held on a residential long lease and therefore the occupation of the flat will be governed by the terms of a lease. Typically the lease will include covenants regulating the user of the flat, limiting the provision of subletting and prohibiting nuisance or immoral behaviour.

The Upper Tribunal have recently held that that a leaseholder was in breach of the user provision in her lease by allowing guests to occupy her flat on short term lets. The relevant clause was “not to use the demised premises for any purpose whatsoever other than as a private residence”. The landlord claimed that by letting the property to business travellers and holiday makers on a series of occasional short term lets did not constitute use as a private residence and thus the lessee was in breach of her obligations under the lease. Practically speaking this seems to be correct because an Airbnb guest will more often than not be using the flat like a hotel for a weekend break and not as their private residence.

The Upper Tribunal decided that the definition of private residence depends on a variety of factors but more importantly depends on the nature and duration of the occupation. The crux of this decision was that the occupation of the flat by each of the short term guests lacked sufficient permanency to be considered occupation of the flat as “a private residence”.  Interestingly, this lease did not restrict subletting and therefore if this leaseholder wanted to sublet the flat long term this would not have constituted a breach of lease.

The Upper Tribunal made it clear that each lease turns on its own terms and each case is fact specific. This case does not determine that every airbnb short let will amount to a breach of lease. However if your lease contains a user clause similar to that detailed above, beware of the potential breach.

Furthermore, this case throws light onto other clauses which leaseholders could fall foul of by permitting short term lets. In particular;

  • Not cause, suffer or permit a nuisance – what if an airbnb guest held a party in your flat?
  • Not cause, suffer or permit an annoyance – guests dragging suitcases up and down communal stairwells, sometimes late at night
  • Compliance with statues – has the 90 day limit been exceeded?

If you would like advice on the terms of your lease or are being threatened by your landlord with injunctive proceedings or forfeiture, please feel free to contact Kerry Coleman (direct dial 020 7802 4809 or by e-mail at kcoleman@ashleywilson.co.uk) on a no obligation basis.

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