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Can a tenant legally rent out their home on Airbnb?

Airbnb is an online marketplace which can be used to arrange or offer lodging and homestays. If you have an extra room or are planning to go on holiday, you might have considered renting your flat or house on Airbnb to earn some extra cash.

However, a recent case acts as a reminder that if you’re a tenant and thinking about renting out your property, you should carefully consider the terms of your lease to make sure you will not be in breach.

Even if you’re not a tenant and you own your home, you may find there are restrictive covenants which prevent you from renting your property through Airbnb.

Details of the case

In this case, the Leaseholder, Mr Conway, owned a flat in South London which he rented out on Assured Shorthold Tenancies. More recently he advertised the flat for short-term accommodation on sites such as Airbnb. Mr Conway was asked by the landlord to stop advertising the property, but he denied doing so.  He said that, in any event, the terms of the lease didn’t stop him if he wanted to rent on a short term basis.

The landlord was concerned about the obvious potential for additional nuisance and security issues posed by the flat being rented out on a short term basis with a high turnover of occupiers, as well as the detrimental impact on the sense of community amongst the other leaseholders. The landlord sought an injunction to prevent Mr Conway from renting out the flat on a short term basis.

The Court’s decision

The Judge found that the flat had been widely advertised on Airbnb for short-term letting, without the landlord’s permission. This was a breach of the lease and an injunction was granted to force Mr Conway to stop renting the flat on a short term basis.

The clauses in the property lease which were breached included:

  • Mr Conway was prohibited from parting with or sharing possession of the flat or allowing anyone to occupy the flat other than by way of assignment or underlease.
  • Mr Conway was prohibited from assigning or underletting the flat without the prior consent of the landlord.
  • Mr Conway could only use the flat for residential purposes for the occupation of one family.

Mr Conway was made bankrupt before the injunction was granted and his trustee in bankruptcy was given permission to appeal on his behalf. However, the court rejected the appeal and confirmed that the injunction should stay in place.

The case referred to in this article is Bermondsey Exchange Freeholders Ltd v Ninos Koumetto (As Trustee In Bankruptcy of Kevin Geoghehan Conway) [2018] 4 WLUK 619.

For more information, or if you are in any doubt about the terms of a property lease or restrictive covenants, please contact Dan Harley or Leanne Bramley on 0115 9 100 200 or send them a message here.

Posted on August 5, 2019

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