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Are you breaching the terms of your lease with short term holiday lets?

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Published: 14/10/2016   Last Updated: 14/10/2016  
Tags: Are You Breaching The Terms Of Your Lease With Short Term Holiday Lets

As from the 6 April 2016 the Government increased the tax allowance on their Rent a Room scheme, from £4,250 to £7,500 per year. Enabling people to rent out a room even if they don’t own their own home or run a bed and breakfast or guesthouse up to  £7,500 tax-free, each year.

Holiday letting sites such as Airbnb, Rent a Room have facilitated this, by marketing properties as short term holiday lets - however according to a new warning by the legal company Mishcon de Reya many property owners who own leasehold properties might be breaching the terms of their leases.

In a case brought to the high property court – Nemcova v Fairfield Rents Limited, the lease stated that the property must be used only ‘as a private residence’ which means that the leaseholder doesn’t have the right to rent out any space in her home for a short period of time.1

Nemcova rented her property out through sites such as Trip Advisor and Airbnb, however other residents in the same block of flats made complaints about strangers coming into the communal areas and making a disturbance. The tribunal came to the conclusion that she was in breach of her leasehold stating: "In order for a property to be used as the occupier's private residence, there must be a degree of permanence going beyond being there for a weekend or a few nights in the week.  Granting very short term lettings (days and weeks rather than months) … is a breach of this covenant.

“Having numerous individuals coming and going and, in the case of secured blocks, having access to the common areas can create security concerns for other leaseholders as well as noise and nuisance issues, ” Fairfield Rents warned.

This case could stand as a president for other people with leasehold properties, so if you do own a leasehold property it would be advisable to check the terms and conditions to make sure you can rent out your property on a short-term basis.

Source: 1 https://www.lettingagenttoday.co.uk/breaking-news/2016/10/airbnb-short-lets-new-warning-that-owners-may-breach-leases