Recent years have seen the advent of a number of on-line facilities that expedite the short term letting of residential property and these facilities are becoming increasingly popular. There are a number of considerations however if you are thinking of letting your property on this basis.
Residential Properties in London
The Deregulation Act 2015 now means that you no longer have to apply for planning permission if you wish to let temporary sleeping accommodation. This historically was defined as less than 90 days. The new legislation repeals this requirement providing that that this is the secondary use of the property and that:
- the total number of nights the premises is let for temporary sleeping accommodation does not exceed 90 days in any one calendar year
- the person letting the property pays council tax
Leasehold Flats
In the case of leasehold flats the situation is more complicated. Obviously if your lease prohibits letting or requires the landlord’s consent then the situation is quite clear. However a recent ruling in the upper chamber, Iveta Nemcova v Fairfield Rents Ltd UKUT 0303(LC) indicates that short lets could constitute a breach of lease.
In this ruling attention was brought to the leasehold covenant requiring that the demised flat was only used as a private residence, a form of lease that is very common. The determination was that short term letting did not constitute the use of the flat as a private dwelling as clearly it was not the intent of the short term occupier to inhabit that flat as their home, being the generally accepted definition of use as a private dwelling.
It is therefore safe to assume from this ruling that most flats will be in breach of lease if let on a short term basis.
Insurance Considerations
Currently all of our policy wordings and insurers for our Blocks of Flats buildings policies will accept the occasional short term let, although this is not true of other facilities. That said, this may change in the future so it would be unsafe to rely on this information in the future. In addition insurers’ positions may change in the future and the fact that a flat is let on a short term basis may need to be disclosed to the insurers. We do, however exclude malicious damage by persons lawfully in the flat / tenants and, on some policies, also exclude theft in the flat in which they reside.
The lessee will also need to notify their contents insurer who may impose terms.
Conclusion
The recent outcome in Iveta Nemcova v Fairfield Rents Ltd probably means that very few flats will be able to be let without being in breach of lease. As such our advice is to check the form of the lease before considering such letting activities and seeking legal advice where appropriate. If in any doubt you probably are best advised not to let on this basis as the consequences of a lease breach are very severe and potentially expensive.
