Potential Pitfalls for Airbnb Landlords

It seems harmless enough, allowing visitors to the area to use your spare room or even the whole property for a few nights and you make some money out of it. This is an increasing trend with the rise of Airbnb and similar websites.

Tenants and leaseholders offering up their available space need to ensure that they are not putting themselves at risk of breaching their lease and facing the possibility of losing their property.

Tenants living in a property under an Assured Shorthold Tenancy will undoubtedly have a clause in their contract preventing them from using the property for business. The contract may also state that it must only be used as a single private residence. Allowing people to occupy your property for money is generally considered business use and will also breach the single private residential use clause. You could be faced with eviction by your landlord.

Now, imagine the effect of this on a long leaseholder with a lease for say 99 years? If the lease specifies the clauses in the previous paragraph, the freeholder could take steps to bring your lease to an end. Court cases have been decided against the leaseholders for taking money from short term guests in breach of their lease.

Partying and disruptive Airbnb users could also cause problems where leases state that there must be no nuisance caused to neighbours or where you are not allowed to part with or share possession of the Property. Insurance can be invalidated by allowing temporary occupants to stay in your property and leaseholders may be faced with substantial losses which will not be met by their insurance.

Mortgage companies could well call in their loan and start possession proceedings if you are allowing Airbnb occupants to stay in your property without their consent.

The above of course also affects London properties but in addition, they are required to have planning permission where there are short term lets for over 90 days in a year. Enforcement action is a real possibility where this is not done.

It may seem like easy money but freeholders and leaseholders should check the terms of their lease before embarking on the Airbnb route. It may end up costing you significantly more than you earn from doing it.

For advice on all aspects of landlord and tenant law, contact Jacqui Swann on 01935 846254 or jacqui.swann@battens.co.uk