Want to make money from short-term lets? Check your lease!

Many of us now use short-term lets to pay for our holidays or to make a regular income. As we're right in the middle of the holiday season you might be tempted to give it a go. But before you do - think again. Here's a cautionary tale for renters or leaseholders thinking of using Airbnb or another online platform to make a bit of extra cash.

Toby Harman was taken to court in July and was hit with a whopping £100,000 fine for renting out his London flat on Airbnb. He had been renting out his 'cosy studio apartment with a hot tub on the short-term lettings website since 2013. Sounds great if you fancy a bijou London base for a spot of sightseeing. Unfortunately for Toby, he was caught out when Westminster City Council discovered the host masquerading on Airbnb as Lara was in fact one of their tenants. It turned out that Toby was sub-letting his flat in strict breach of his social housing tenancy agreement. After a failed appeal he was evicted and told to pay back £100,974 in unlawful profits.

This case revolves around the dos and don'ts of social housing but the same rules are likely to apply to any homeowner who doesn't own their freehold. If you are renting, it goes without saying that your landlord may not be thrilled to find you are sub-letting his property. Eviction is the likely outcome if you're caught out and you could end up in court. And if you are a leaseholder, don't even think about going down the Airbnb route without first checking your lease. Read the small print the devil is always in the detail.
Most leases state that a flat can only be used as a private dwelling and short-term lets are very unlikely to fit the bill. This is clear from the widely reported 2016 case of Nemcova v Fairfield Rents Ltd - now known as 'the Airbnb ruling'. Well worth a closer look if you're in any doubt.

Another important point was highlighted last year in the case of Bermondsey Exchange Freeholders Limited v Ninos Koumetto. This case drew attention to the fact that most residential leases don't allow owners to share possession or occupation of their flat or to use it for a commercial purpose (which includes AirBnB lettings) without consent of the freeholder. So by all means talk to your landlord but don't be surprised if you get a negative reaction.

What all these court cases clearly show is that short term lets are a minefield for leaseholders. So tread carefully!