There has been an astronomic rise in the presence of Airbnb in the UK in recent years. Airbnb is a peer-to-peer platform connecting homeowners with space to spare to those who need space for a short term. They can let an extra room while still residing on the property or let the entire property while they are away.
Airbnb allows leaseholders to rent their properties for up to 90 days for short-term lets. It has proven to be a lucrative proposal for many and a simple way to launch a property business. However, leaseholders must consider several things before sending out those stunning photographs from the best angles of their property. This is especially crucial for those who own a long lease on their property. UK lease agreements do not allow leaseholders to use their property as a holiday home listed on Airbnb without permission. The law also allows investigation of the term ‘Change of use of the property,’ as was a consideration with Nemcova v Fairfield Rents Ltd.
The Nemcova lease terms indicated that the leaseholder was “not to use the premises or permit them to be used for any illegal or immoral purpose or any other purpose otherwise than as a private residence.” Use of the property as a holiday lease through Airbnb was regarded as a breach of this lease term. The activities of any Airbnb guests are also considered by many legal experts as a breach of the lease. They cause unacceptable levels of noise and disturb the neighbours. Bringing pets to the property is also regarded as a breach.
Other Aspects Under Consideration
Leasing a property for a holiday entails a unique type of insurance that protects the freeholder. If such insurance is not in place, the agreement could be seen as violating various issues related to health and safety matters. There is also the possibility of the existing insurance being invalidated by using the property for a different purpose. This could have serious implications for the freeholder of the property.
The local authority can issue an enforcement notice and also pass an order imposing fines. They can ask for steps to be taken within a specified time frame to rectify the situation. Before entering into business contract with Airbnb, leaseholders must check with their local authority if they enjoy any exemptions that allow the use of the property as a holiday home.
If the leaseholder has entered into a mortgage agreement, this aspect must also be considered before listing the property on Airbnb. Changing the use of the property may create a breach of the mortgage agreement. A change in the interest rate might be initiated by the Mortgagee consequently. Leaseholders must seek professional legal advice before listing the property on Airbnb and allowing in holiday guests for short-term lets.
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