When Hosting Can Cost You Your Home
by Peter Rolph, 07 December 2016
The short-term lettings site Airbnb has exploded in popularity in the last year. But since its growth first began, it has been surrounded with controversy and posed multiple legal dilemmas.
Whilst Airbnb was born from the premise of sharing your residence with paying guests, it has developed into an alternative to hotels altogether, advertising entire houses or apartments for short term lettings. A recent Upper Tribunal (Lands Chamber) decision illustrated one of the pitfalls that many would-be hosts could fall into.
Nemcova v Fairfield Rents Limited  involved the short-term lets of a leasehold flat, via the internet. The 99-year lease contained a covenant, providing that the property could only be used as a private residence. Evidence showed that the leaseholder let the property approximately 90 days a year, for between 1 and 3 days per letting. The landlord initiated proceedings against the leaseholder, alleging breach of the terms of her lease, and was successful.
This case is important, as it illustrates a significant risk for those considering using these unconventional means to lease an entire property, as a quick way to make money. They could find themselves, in breach of their lease and at risk of their lease being forfeited.
Hosts in London are also prohibited from letting entire flats or homes being let for more than 90 days per year. Whilst local authorities have little resources to pursue those in breach, Airbnb will be limiting such lettings (in the absence of planning permission to the contrary) on their site from 2017.
The primary Airbnb house share model is not as troublesome for hosts, in terms of legal issues. However, the evolution of some of the site’s hosts into landlords of entire property lettings, is far murkier. It is vital that leaseholders consult their lease, before considering short-term lettings. Trying to make a quick profit could end up costing far more than you ever bargained for!
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