Beware the perils of letting your home for short term holidays and business

Posted: Monday, 28 November 2016 @ 11:13
Beware the perils of letting your home for short term holidays and business

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Sometimes you cannot help but think that the internet of things is moving so fast that it is difficult for old established laws and customs to adapt and keep up with innovations.

The global explosion of short term lets via organisations such as Airbnb is a prime example. It is a huge challenge to the hotel industry, but brings problems of its own to the housing sector. Many countries and cities are quickly introducing regulations to control this phenomena.

Not surprisingly people are alive to making some fast money and  are jumping on the bandwagon to let their accommodation on short term unsecured lets to holiday makers and business users looking for a base outside the hotel system.

But before you jump at this  opportunity you must consider your legal position very carefully.

If you are a freeholder, you should check if there are any covenants in your deeds prohibiting or restricting letting. And if you have a mortgage there may be restrictions, so you should check first with your mortgage company. And of course there may be planning implications. In some areas there are restrictions on the numbers of days per year a property can be let without a change in planning use. So you should check with your local planning officer.

There could well be implications for safety, with a requirement to have gas and electrical safety certified on a regular basis.

If your property is let on a regular basis with a high turnover, there is a far greater risk of nuisance to neighbours, who will probably be wary and not take kindly to a high turnover of strangers.

And if your property is leasehold, additional problems can be encountered. Many leases restrict letting, either through direct covenants or through management agreements, the aim being not only to preserve the landlord's investment but to protect neighbours. There is also the possibility that any longer lets will require notification to the landlords or managing agents.

Many long leases contain covenants not to use the premises "other than as a private residence". In the recent case of Nemcova v Fairfield Rents it was held that occupants under the short term lets were not in fact occupying as their "residence". It was decided that "residence" required a degree of permanence such that the occupier would regard the accommodation as their private residence, their home. Lettings for days and weeks rather than months would not be occupation as a private residence. So the landlord could enforce the covenant, first of all by obtaining a declaration from the Rent Review Tribunal, and then proceeding if necessary to forfeit the lease.

So for many leaseholders in particular, and most flats and apartments will fall under that category, they will be taking a huge risk if they let on short terms without first of all checking their leases and obtaining any necessary consent from their landlord.

Before deciding to let it is strongly recommended that you obtain advice.

 

 

Blog by Nigel Musgrove
Nigel has been providing dispute resolution advice as a solicitor for over 35 years. As well as advising SMEs and business owners on disputes he also offers a specialist licensing law service. View profile
Call Nigel on +44 (0)1285 847 001 or by email
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation to discuss your particular circumstances.

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