A recent case has highlighted the legal dangers of letting your flat or apartment through schemes such as Airbnb.
Many people are making extra money by letting out their apartment or flat for short periods to business travellers and tourists. This is attractive to both parties. It gives the owner an extra income stream and the business traveller or tourist a better deal (and much more room) than using a local hotel. Web sites, such as Airbnb, have sprung up to help connect owners with such travellers.
However, you might be breaching your lease if you do so. Read on to find out if you are at risk.
How do I know if I am at risk from letting my flat?
Almost all flats and apartments are bought and sold on a leasehold basis. This means that you have the right to occupy the property but do not own it outright.
You will have a lease with your landlord. This is the person or company that owns the property and is typically referred to as the freeholder. You are subject to the terms of the lease you signed with them when buying your flat.
Some leases specifically prohibit you from underletting your flat or apartment. This means that without getting specific permission from your landlord, you cannot offer your apartment to let on sites such as Airbnb.
However, Else Solicitors can work with you and your landlord to see if a mutually agreeable solution can be reached. Andy Rudkin, Head of Dispute Resolution at Else Solicitors and Amiee O’Toole have years of experience in helping two parties reach a solution which is beneficial to both. If you would like to explore this option, then you are invited to call Andy on 01283 526239 or Amiee on 01283 526221. Alternatively, you can e-mail them at firstname.lastname@example.org or amiee.o’email@example.com.
My Lease Does Not State that I Cannot Underlet My Apartment So Can I Put It on Airbnb?
Even if your lease does not specifically state that you cannot underlet your apartment or flat, we still strongly advise that you take legal advice. Let us explain.
A significant case was recently decided in the First Tribunal and this was appealed against by the leaseholder in the Upper Tribunal. The First and Upper Tribunals are parts of the judicial system and are composed of judges and other members.
The case had been brought by a landlord against a leaseholder who owned a one-bedroom first floor flat in one of their London properties. The leaseholder spent most of her time at her partner’s home and had decided to advertise her flat on Airbnb. This led to her renting her apartment to business travellers for several days or weeks at a time. In total, the flat was let out 7 times over the course of a year for a total of 90 days.
Her lease did not specifically state that she could not:
- Underlet or grant short term tenancies
- Use the flat for business or commercial use
However, it did require that the flat be used as a private residence.
The leaseholder argued that while business travellers stayed in her flat they were using it as their private residence. However, she lost her case in the First Tribunal and appealed it in the Upper Tribunal.
On 6th September 2016, the Upper Tribunal found in the Landlord’s favour. They ruled that business travellers staying at the leaseholder’s flat could not be said to be using it as their private residence. There had to be a degree of permanence for it to be considered their private residence, which went beyond them spending just a few days or weeks there.
The key point to note in this ruling is that the Upper Tribunal did stress that each case turns on its own facts and depends on the construction of the lease.
If you would like to benefit from underletting your apartment, then we strongly recommend that you take advice from a qualified solicitor before doing so. If you do not, then you could be in breach of your lease. This could lead to legal action and damages being awarded. It may even result in you forfeiting your lease.
It is much easier to seek advice before moving forward. Andy Rudkin and Amiee O’Toole at Else Solicitors will be able to review your leasehold and advise you on your options. They can also help you, if needed, to come to an agreement with your Landlord if you are at risk from underletting your flat or apartment.
If you would like to explore letting your flat or apartment on sites such as Airbnb, you are invited to call Andy on 01283 526239 or Amiee on 01283 526221. Alternatively, you can e-mail them at firstname.lastname@example.org or amiee.o’email@example.com.