Preventing Airbnb type sub-lettings

With the rise in popularity of websites like “Airbnb” and “Booking.com”, home owners and occupiers have increasingly taken opportunities to let (or sub-let) out their homes on very short term lets. This has sometimes given rise to noise and anti-social behaviour problems for neighbours, as guests make the most of their stay.

The recent case of Triplerose Ltd v Beattie [2020] has provided useful guidance on the extent to which a landlord can use lease covenants to control such activity.

The case

In Triplerose the dwelling was a flat, held on a long term lease, containing a covenant not to use the flat for any purpose other than “as a private dwelling house for occupation by one family at any one time”, and not to carry on any trade or business “upon the property”. The lessees lived in the flat 2-3 days a week, but let it out for short term occupation at other times.  A separate company handled advertising, check-ins and laundry.

The First-tier Tribunal found no breach of the lease, but the landlord then appealed. The Upper Tribunal found a breach of one covenant, but not the other as follows:

Private dwelling use

The Tribunal decided the correct approach was to ask whether the occupant of the flat at any given time, was using it for any purpose other than as a private dwelling for occupation by one family at any one time. The individuals who occupied the flat after responding to internet advertisements were not fulfilling this requirement, and thus the lessees were in breach of covenant.

Trade or business prohibition

The Tribunal noted a distinction between using premises as a business resource and carrying on a business upon the premises. The covenant prohibited the lessees from conducting business “upon the property”, but the lessees were not doing that. Although they were using the flat for the business of short-term letting, the business was being carried on from elsewhere. The provision of laundry and check in services by the company did not alter this position. The flat itself was being used for short-term residential purposes (albeit as part of a business); no activity was being carried on “upon” the property, which in itself amounted to a business and thus there was no breach of this covenant.