A recent decision in the Upper Tribunal’s Land Chamber, the UK’s highest property court, will carry significant ramifications for landlords and tenants moving forwards. In the case of Nemacova v Fairfield Rents Ltd [2016] the Tribunal held that a tenant breached a covenant in their long lease of a flat. The lease prohibited the use of the flat for any purpose other than as a private residence, which is a common clause in leases.
The tenant was found to have breached this covenant as they had advertised the flat on the internet with websites such as Airbnb and TripAdvisor. The tenant had subsequently granted a series of such short term lettings.
The Tribunal established a breach of the lease by looking for a degree of permanence in the definition of a private residence. They found that this went beyond staying in the property for a weekend or just a couple of days during the week. In doing so, the Tribunal has established a precedent that a lease covenant to only use a property as a ‘private residence’ is likely to be breached by holiday or Airbnb-style letting.
The consequence is that anybody considering letting their property with a service such as Airbnb should check their lease beforehand as landlords or freeholders could be prompted into taking action. Breaching a lease can have serious ramifications for tenants such as legal proceedings, responsibility for legal costs or having to forfeit the lease itself.
For more information on matters concerning leases, please contact Tom Weightman on 0114 224 2168 or [email protected].
