‘Everyone does it’, but leaseholders and tenants must tread carefully if they want to avoid repercussions.
Growing numbers of landlords are launching possession proceedings against tenants who have sublet their property via sites such as Airbnb without permission, it was claimed this week. Tenants who do this without consent risk eviction for a breach of their assured shorthold tenancy agreement. Meanwhile, owners of leasehold flats have also been warned they should tread very carefully.
Only Airbnb hosts who own their property outright can be sure that they are not breaching any contractual obligations – but even these homeowners, like any other landlord, are breaking the law if they fail to get a gas safety certificate for the property each year.
There are other rules, too – for example, Londoners are forbidden from using their home to provide temporary sleeping accommodation for paying guests for more than 90 days in each calendar year.
“I had no idea about any of this,” says Nicole (not her real name), who regularly lets out a room in her two-bed London flat on Airbnb. “It is just something everyone does in my part of the city. I haven’t informed my lender, freeholder or insurer, or had the boiler checked. Now I feel quite stupid – and worried.”
Most flats and maisonettes are leasehold-owned, apart from in Scotland. If you are a leaseholder and considering hosting on Airbnb, check your lease first. There is usually a clause or “covenant” which places some restriction on assigning, subletting or otherwise “parting with possession” of the property without the freeholder’s consent, explains Howard Dent, a senior lecturer at the Manchester Law School. But he adds: “Would you need this consent for ‘parting with possession’ to an Airbnb guest? It’s arguable.”
If a freeholder believes a leaseholder has breached this lease covenant and carried out an unlawful subletting, the freeholder can serve a section 146 notice as a first step. If successful, the freeholder could end the leasehold interest and remove the leaseholder from the property.
“However, I think that if the leaseholder had stopped the unlawful subletting – even though in law it is an ‘irremediable breach’, which effectively means it can never be put right – then the court would be very reluctant to grant possession to the freeholder,” says Nyree Applegarth, a property litigation partner at Higgs & Sons solicitors.
Dent agrees: “Any court would be very reluctant to forfeit a lease on such grounds, but it will cost you money to battle with the freeholder. You might have to fall back on the human rights law argument that the loss of property would be a disproportionate result from such a trivial breach. Do you really want to go there?”
If, on the other hand, you ask the freeholder’s permission, be aware that your lease may give them the right to simply refuse, or to charge you whatever fee they like for their consent – potentially each time you host a new guest.
Your freeholder will also have your mortgage lender’s details and could decide to inform them about what you are doing – especially if you had not sought permission from the freeholder and so have breached a lease covenant.
This is one of the reasons landlords of leasehold properties usually put clauses in their assured shorthold tenancy agreements preventing tenants from subletting without prior consent.
Failing to get this consent, even for a short-term Airbnb let, could result in an eviction by the landlord.
“We are receiving a growing number of instructions from landlords who want us to start possession proceedings against tenants who have sublet via Airbnb without their consent,” says Paul Shamplina, founder of Landlord Action, a company that specialises in tenant evictions. “Subletting is fast becoming one of the leading grounds for a tenant eviction.”
Last year the government said it planned to make it easier for tenants to sublet a room by legislating against the use of clauses in private fixed-term tenancy agreements that expressly rule out subletting or otherwise sharing space on a short-term basis.
However, it has not yet set a date for a consultation on the plans, and the Residential Landlords Association believes the idea has been pushed into “the political long grass”.
Airbnb says it tells hosts to check and certify that they are following local rules before they list their space. “This is made clear in our terms of service. We also remind hosts about the rules on our responsible hosting page.”
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