Published: 30/06/2019 By Allan Fuller
i) The Lease
Leaseholders need to ensure that the Lease does not have any Clauses preventing them from Letting as a holiday Let on AirBnB. The main standard Clause which Leaseholders could potentially breach, by Letting the property on AirBnB, would be Change of Use - There have been a few discussions on the issue of whether the use of premises to Let on AirBnB is in breach of any Clause in a Lease which restricts the use of the property as a private residence only or prohibits carrying our any business in the premises. Pets - If the Lease doesn't allow pets in the premises and the Leaseholders' guests have pets during their stay, the Leaseholder may find himself in breach of their Lease. Noise - As a Leaseholder you could be in breach of your Lease, if your guests are causing noise in the property and the Freeholder or other Leaseholders submit a claim against you. By permitting AirBnB guests to use the property, and those guests, either having parties or the Leaseholder permitting them to do so, the flat owner would be held responsible.
ii) Health and Safety Issues
Landlords who Let their property are obligated to comply with Health and Safety Laws. If you decide to Let the property as Holiday Accomodation, the Heath and Safety Laws would apply to you as you would be considered to be a Landlord under the Law. Regulations to consider would be 'The Regulatory Reform (Fire Safety) Order 2005', 'Smoke and Carbon Monoxide Alarm (England) Regulations 2015' etc.
Leaseholders must make sure that if they intend to Let their property as a Holiday Let on AirBnB, their insurance is not invalidated by doing so. Property owners should inspect both of the policies to ensure that they are not in breach of either.
iv) Mortgage Lender
Leaseholders who have mortgaged their property need to ensure that by Lettings their property as a Holiday Let on AirBnB, they do not breach the Terms of their mortgage. Any Letting may require consent in writing from the mortgage lender, and failing to do so may lead to a demand for repayment in full or repossession of the property.
v) Planning Law
In London, local authorites can serve enforcement notices on a property owner who has breached Planning Law if he changes the use without planning permission, and may be liable to a £20,000 fine if they don't comply with the notice under "The 1973 Act".
Under 'The Income Tax (Trading and other Income) Act 2005', Landlords who Let or Licence a furnished room in a property, which is their main or only residence, benefit from 'Rent-a-Room' incoming tax relief. In year 2016/17 it was £7,500. However, property owners who exceed the threshold must comply with the tax rules and submit a return.
In conclusion; before subletting your property, the Leaseholder must always keen in mind the legal implications surrounding the subject.
Priya Dyer BSc (Hons) AIRPM
Head of Block & Estate Management
Allan Fuller Estate Agents