AirBnB: Are you in breach of your lease?

7 March, 2019

AirBnB is an easy and quick way to both let your property and find a short term stay. With over 4 million listings worldwide, it is an attractive way to rent out your property and earn extra cash, however, if you occupy your property under a lease, you may be in breach of the terms agreed by allowing short term lets.

The starting point is to look at the terms of your lease; you need to consider both the underletting provisions and the permitted use terms.

Underletting – is it permitted?

Residential leases are likely to contain a restriction as to whether you can sub-let your property, grant an underlease or share occupation. You may not be permitted to let your property for temporary accommodation if your lease includes a provision to not assign, underlet or part with possession without the consent of the landlord.

In the recent case of Bermondsey Exchange Freeholders v Conway [2018] it was held that a short term AirBnB letting was a breach of the lease terms above. It was held to be an underletting without the landlord’s consent, or alternatively that a licence had been granted which was a breach of the obligation not to permit others to occupy.

Restriction over use

Your lease is likely to also include a provision which restricts the use of the property to a residential flat. If it does, the use as a short-term temporary accommodation for paying visitors may be prohibited. In the above case it was ruled that AirBnB lets were a breach of the covenant which permitted the use of the flat as a residential property for the occupation of one family only. The continued letting of your property may be viewed as a flat used for commercial hire.

You should also consider whether temporary letting of your property is in breach of planning laws – in London, short terms lets are permitted for no more than 90 days per annum – any more than that will require planning permission as a material change of use. Most leases require a tenant to comply with planning (and other statutory requirements); there will be a breach of the lease terms if there are lettings for more than 90 days in London.

What are the consequences?

In Bermondsey Exchange the Court granted the freeholder an injunction preventing the letting of the property, however you should also check your lease for any other rights the Landlord may have where the Tenant has been breaching the terms of the lease.

If you would like more information in relation to this article please contact Emma Pierce-Kemp at Emma.Pierce-Kemp@storrarcowdry.co.uk.