Summary and implications
I have a friend. He owns a one-bedroom flat in central London. It's a nice place (quite trendy) with good transport links. My friend is quite a sociable chap and you will often find him spending the weekend with friends, sleeping in the spare room or on the sofa.
I recently found out that this "friend" has been spending the majority of his weekends with friends … on a rotational basis.
After a brief interrogation, my friend confessed that he had been renting out his flat for the weekend through Airbnb – the peer-to-peer online network which allows people to list or rent short-term accommodation in residential properties – but had nowhere else to stay.
I couldn’t believe it. Spending weekends with friends, so that he could rent out his flat to strangers.
The legal bit…
The recent case of Iveta Nemcova v Fairfield Rents Limited considered an Airbnb situation and the following user covenant in a long-term residential lease:
"Not to use the Demised Premises or permit them to be used for any illegal or immoral purpose or for any purpose whatsoever other than as a private residence".
The long-term residential lease contained no restriction on assignment, underletting or parting with possession prior to the last seven years of the term.
In a nutshell, the Upper Tribunal decided that in granting short-term lettings, the tenant was in breach of the user covenant in the lease – explaining that in order for a tenant to be using premises as a private residence, his or her occupation must have a "degree of permanence going beyond being there for a weekend or a few nights in the week".
Something to think about…
Be very careful if you are thinking about granting short-term lets. As a minimum, you should consider the following: