By Emma Dunkley
The highlighted case of Nemcova v Fairfield Rents Ltd  UKUT 303 (LC) was decided by the Upper Tribunal in September 2016. It has become known as the ‘Airbnb ruling’.
Ms Nemcova was the long leasehold owner of a flat in London. She conceded that she had let her flat on short term lets via the internet and had done so on approximately seven separate occasions over a year. Ms Nemcova stayed in the flat three or four days a week and paid the council tax and utility bills. The landlord took the view that by letting the flat for short term rentals on Airbnb, Ms Nemcova had breached the user covenant in her lease.
The terms of Ms Nemcova’s lease were that she was permitted to assign, sub let or part with the whole of the flat, except within the last seven years of the term; there were no restrictions as to short term lettings; there was no express prohibition that the flat could not be used as a holiday home and nor did it expressly state that Ms Nemcova had to reside or even occupy the flat as her principal home.
However, the lease contained the usual user covenant:
The Upper Tribunal said that the question to be asked is not whether the property is being used as the occupier’s home, but whether it is being used as a private residence. In the Tribunal’s view:
The Upper Tribunal determined that by letting out the flat on Airbnb, Ms Nemcova had breached the user covenant in her lease.
Whilst it was made clear that each case will turn on its facts, lessees should heed the warning in Nemcova.
For more information contact Simon Painter.
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