October 2016 Legal Update: AirBnB lettings

Forfeiture of a Residential Lease

Nemcova v Fairfield Rents Limited [2016] UKUT 303 (LC)

Given the rise of short-term lets, particularly as a result of the growing popularity of platforms such as AirBnB, the judgment of HHJ Stuart Brigg in Nemcova v Fairfield Rents Limited [2016] UKUT 303 (LC) is one of some interest.

Ms Nemcova was the leaseholder of a flat of which Fairfield Rents Ltd was her landlord. She admitted to letting her flat to various business visitors on a short-term basis for about ninety days a year. For the remaining period, the flat was her main residence, albeit that it remained empty for long periods. Her lease contained a covenant prohibiting her from using the flat for “any purpose whatsoever other than as a private residence.”

The landlord sought a determination pursuant to section 168(4) of the Commonhold and Leasehold Reform Act 2002 that the tenant was in breach of the lease. At first instance, the First-tier Tribunal held that the covenant in question required the flat to be occupied “as a home”; multiple lettings to various people for short periods of time was incompatible with this requirement.

Ms Nemcova appealed to the Upper Tribunal which considered whether the advertisement and letting of the flat for such a short period constituted a breach. The appeal was unsuccessful; the Upper Tribunal concluded that the duration of the occupation was relevant. In order for the flat to be a private residence, there must be a degree of permanence going beyond a stay of a few nights or a weekend.

In reaching his decision, HHJ Stuart Brigg observed that each lease is different; any similar claim would depend upon its own facts. It is therefore necessary for landlords to exercise caution when seeking to apply blanket policies concerning AirBnB lettings in the future.

By Jeff Hardman (Barrister, Arden Chambers) & Ranjeet Johal (Partner, Mills Chody LLP)

Arden Chambers is a leading set specialising in property, housing, local government and planning. Arden Chambers has a strong and experienced team who provide a full range of services for freeholders and leaseholders in relation to residential property including enfranchisement, lease extension, right to manage and service charge disputes. Chambers has extensive experience of FTT litigation and advisory work, with members appearing both in the FTT and Upper Tribunal on a regular basis.

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