* indicates required

Airbnb lettings – too good to be true?

By Louise James

Scott Fowler Solicitors

IT is estimated that some 100,000 UK homeowners have rented out all or part of their properties on Airbnb or similar. While these types of short-term lettings can seem financially attractive, as well as more flexible for those not wanting to commit to longer term rentals, it is worth bearing in mind the potential legal pitfalls.

Recent case law has suggested that courts are likely to interpret residential leases fairly stringently and so, where there is any doubt, flat owners could find themselves in breach of their lease by renting their properties out on Airbnb and the like. This need not be on the basis of falling foul of a specific restriction, but could be because the letting amounts to a nuisance to other flat owners or adversely affects the building insurance policy.

Where homeowners have a mortgage on their property then they should also be aware of their lender’s stance. Generally speaking, this type of letting will be in breach of the mortgage terms and conditions and borrowers could even be asked to repay the loan in its entirety. Property owners should be aware that, while some lenders will allow underlettings of a more standard nature, they may prohibit very short term ones. If in doubt, owners should check with their lender before committing to an Airbnb listing.

For those homeowners who are neither flat tenants nor mortgage borrowers the position is still not straightforward unfortunately. Home insurers vary in their attitude towards short-term lettings and some offer specific ‘add on’ policies to cover them. In the absence of one of these, owners should be aware that doing anything to invalidate their policy could result in the insurer refusing to pay out for an entirely unrelated claim. This means that a property owner could find themselves effectively uninsured in the event of, say, a serious fire, on the basis that they had previously let out their property on Airbnb.

Lastly, from a planning perspective, the permanent use of residential property for temporary sleeping accommodation constitutes a material change of use for which planning permission is required and, if the property in question is in Greater London, there are specific restrictions on using a property for temporary sleeping accommodation for more than 90 nights in any calendar year.

For more information on this topic please call Louise James on 01604 683813.

Companies mentioned in this article

More legal articles: