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Do you Let out property through Air BnB? Are you in breach of your Lease?

Breach of covenant - short term letting ruling at the Upper Tribunal

A recent Upper Tribunal (Lands Chamber) decision has held that an owner of residential leasehold property that rented the property out on the Air BnB website was in breach of the terms of their lease.

A leaseholder of a flat in Enfield, Middlesex recently lost her appeal to overturn an earlier decision by the First Tier Tribunal in which they held that by her advertising on the internet the property for short term lettings, she was in breach of a restriction in her lease to use the property only as a private residence.

It is not uncommon for residential flat leases to contain a Leaseholder covenant "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". Indeed this covenant was contained in the lease in question before the Tribunal.

The First Tier Tribunal found, and the Upper Tribunal subsequently agreed that, in offering the flat for short term lets online, the Leaseholder was in breach of her covenant not to use it other than as a private residence.

The First Tier Tribunal decided that "occupation of the flat as a private residence" required the flat in question to be occupied as a home. It then took the view that in offering the flat to rent on short term lets online, they were using the flat other than as a home, and the Leaseholder was ruled to be in breach of the terms of her lease in doing so.

If you own leasehold property and let it on short term basis whether online or otherwise, we are happy to advise you on whether or not you are in breach of the terms of your lease in doing so, just contact Ben Colenutt on 0330 2000 017 or for more information.


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