The recent case of Bermondsey Exchange Freeholders Ltd v Koumetto (unreported) in the Central London County Court serves as a useful reminder of the potential risks of certain leasehold properties being listed on Airbnb and other similar sites.
In this particular case the Court decided that a long leaseholder had breached the terms of his 999-year lease by underletting his flat for holiday lets via online sites such as Airbnb and granted an injunction preventing him from doing so. The relevant clauses which were considered are not uncommon ones to find in leases of properties of this kind.
On dismissing the Appeal the Court found that the Airbnb arrangements were short “lettings” and it was decided that there had been a breach of clause 2.10(3) of the particular lease, which prohibited the leaseholder from assigning or underletting the flat without the prior consent of the landlord. There was also a breach of the user covenant as the flat was not being used as a residential flat for one family only but as short-term temporary accommodation for transient occupiers, who had been engaged through Airbnb style platforms, paying commercially.
There are also potential planning considerations to have regard to when deciding whether or not to sign up to these types of arrangements.
N.B. Please note that the above information is a guide only and does not constitute legal advice. We recommend seeking specialist legal advice on your own particular circumstances.