Since its launch in 2008, Airbnb has grown to become a name that is recognised all over the world. In 2018 it was said that Airbnb had a presence in 191 countries, 81,000 cities and had over 4 million listings on the website.
As Airbnb continues to grow, landlords are becoming concerned about tenants letting out their properties and, in the process, breaching various terms of the lease by allowing people to stay on a short term let. It is said that landlords are also concerned that a short term let could breach the terms and conditions of their mortgage as lenders normally require an Assured Shorthold Tenancy for a minimum of six months. It may also render the landlord’s home insurance null and void.
A recent case involving a landlord and his tenant (Bermondsey Exchange Freeholders Limited v Ninos Koumetto) outlined what can happen if the lease prohibits subletting or sharing possession of the property. In this particular case the tenant was subject to a long lease and he decided to let the property out as temporary accommodation.
The landlord became concerned by potential security issues and increased nuisance due to the short-term visitors staying at the property, so they decided to bring legal action against the tenant. The court of appeal found that letting through Airbnb constituted a breach of the lease. This was because the landlord did not consent to a sublet or licence and by allowing people to stay in the property; the court deemed the arrangement constituted a commercial use therefore breaching an additional term of the lease.
Landlords may find reassurance in the outcome of the above case and if they suspect a tenant is subletting the property out, they may want to consider reviewing the terms of the lease and, in particular, underletting provisions and the permitted use of the property.
Residential leases normally contain a restriction noting whether the tenant can sub-let or share possession of the property. If the lease contains a provision not to assign then the tenant may not be permitted to let the property as temporary accommodation.
Residential leases may also include a provision restricting the use of the property to a residential dwelling and for the use of one family only. If a tenant decides to let a property via Airbnb on a temporary basis, it may be viewed as a property that is used for a commercial purpose and this could be a breach of the lease.
For further advice relating to leases or any disputes that arise with your tenants, get in touch with Farleys’ Commercial Property Department on 0845 287 0939 or alternatively contact us through the website.