David Alexander, Director of Property Management Company, Apropos, states, Airbnb is attempting to convince traditional buy-to-let landlords into moving to a short-term holiday let. As a result, traditional lettings have declined.

David Alexander comments:-

“many have felt tempted toward short term lettings, with its potentially higher returns at a time when margins in the private rented sector are being squeezed.”

Airbnb is targeting this market by highlighting potential substantial earnings for landlords who join.  The daily income is, of course, higher than a long-term let.

Whilst Airbnb style lettings have given holidaymakers more to choose from, it is causing some concern to Landlords who fear their tenants may be sub-letting their homes in breach of their existing lease.

This was demonstrated in Bermondsey Exchange Freeholders Limited v Ninos Koumetto.

A tenant of a long-term residential lease had sub-leased his residential property as temporary accommodation through the Airbnb platform.

The landlord was concerned about security issues and nuisance due to the increased comings and goings of visitors and raised an action against the tenant, claiming that the tenant was in breach of their lease.

The lease contained a prohibition on parting with, sharing possession of, or permitting a person or company to share occupation of the flat except through an assignment of the lease, or by underlease to which the landlord has consented.

Furthermore, the landlord’s title deed contained a restrictive covenant prohibiting the property from being used for anything other than residential, and for the occupation of one family only.

On Appeal, the tenant failed to overturn the decision. The letting of the flat through Airbnb amounted to a sublet to which the landlord had not consented, a breach of the lease. Moreover, the arrangement represented a commercial use, rather than residential which breached the restrictive covenant as stated.

Only time will tell what impact this judgement has made, in terms of security for the landlord when letting out their property. However, the case does make it clear that short-term holiday lettings, with paying visitors amounts to the commercial lease of a premises. At present, there remains scope for legislative review into this matter, thus, providing protection to both landlords and tenants. Whilst this position remains, we would urge our clients to proceed with caution.

Please contact the commercial property department for further information.

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