After a slow start, Airbnb expanded rapidly around the world to encompass a diverse range of properties in widely differing locations. Along with similar peer-to-peer providers of short-term residential lettings, Airbnb and other online home sharing platforms have undoubtedly led to a significant increase in the accessibility of inner city tourism, by offering central locations at a low nightly cost.
In the UK, a recent court decision has highlighted the issues surrounding the use of rooms in leasehold properties, and this article looks to identify some of the issues involving online home sharing platforms, identifying some of the problems which may be encountered under the terms of a lease.
Leases of property can vary significantly depending on the parties and the property involved, but many include common promises between the landlord and tenant, in order to define their relationship to each other and the property. Three such common covenants, or promises, are set out below and analysed in the context of home sharing, whether by single rooms or entire properties.
“Not without such licence as aforesaid to carry on or suffer to carried on in or upon the demised premises any trade manufacture or business of any description …”
Whether advertising properties on Airbnb or other home sharing platforms constitutes running a business is up for debate, however, some factors could certainly lead to such activities to being interpreted as one. The primary consideration here is how much of the year the property, or a part of it, is being used by persons other than the lessee, as the provision of temporary sleeping accommodation cannot exceed 90 days each year under the Deregulation Act 2015.
A secondary factor might be whether the advertisement includes the entire property or simply a room within it, implying a different use. These factors can be exacerbated by advertising multiple properties on a similar short-term basis, implying that there is no intention for personal residency at the property.
“…to keep and use the demised premises and all buildings for the time being standing thereon as a private residence in the occupation of one family only and for no other purpose.”
Especially when sleeping accommodation is provided for a significant proportion of the year and advertised to the general public, a covenant like that above is where home sharing could most clearly place the lessee in breach of the terms of their lease.
While most leases contain clauses allowing individuals not party to the lease to visit or stay at the property, there are often strict limits on the proportion of time this should amount to on a monthly or yearly basis.
Consistently hosting regular visitors from outside a lessee’s family for short stays, such as long weekends, are likely to breach such covenants as the one above, thereby providing a realistic grounds for forfeiture by the landlord.
“Not to do or suffer or permit any waste spoil or destruction to or upon the demised premises nor to do or permit to be done any act or thing which shall or may be or become a nuisance damage or annoyance or inconvenience to the Lessor or the Lessor’s tenant or the tenants or occupiers of the adjoining premises and in particular of the other flats in the Building or to the neighbourhood”
Airbnb and other home sharing platforms are often used for city breaks, arguably providing a cheaper, more social alternative to hotels in town centres. Quite often noisy tourist groups staying in a property can irritate other tenants, which can be a significant problem for landlords when they own a number of adjacent properties and one is regularly hosting groups of visitors. If the landlord does not own adjacent properties the absence of a clear line of communication for neighbours could see noise complaints made to the local council, which may result in significant fines against the lessee, whether or not they were present at the time.
Online home sharing platforms offer a simple way of advertising spare space to a wide market without the long term responsibilities that come from renting to long term residential tenants. Nevertheless, subletting leasehold property – certainly where conducted without permission – may breach the property’s lease. Forfeiture proceedings can be expensive and even if not pursued, advertising the property online without the landlord’s consent is a swift way of souring a tenant’s relationship with them.
If you have encountered problems with your landlord concerning enforcement of the covenants in your lease or if you are a landlord or agent and you believe the tenant of your property has breached covenants, please get in touch with Mackrell Turner Garrett’s Property Litigation Team.