A couple of county court cases on Airbnb/short let use by leaseholders. One was reported in the newspapers, the other has not been reported anywhere before. Both show the potentially serious consequences of leaseholders letting out on short lets, where lease clauses arguably prevent it. We have seen the clause ‘use only as a private residence’ in the Upper Tribunal Nemcova, and subletting without consent, “otherwise than as a private residence for occupation by a single household” and carrying out a trade, business or profession from the Property in the FTT in LON/00AY/LBC/2015/0021. In both these cases, other lease clauses were involved, so there is an extension of the kind of clause catching Airbnb/short let use.
Bermondsey Exchange Freeholders Limited v Kevin Geoghegan Conway. County Court at Lambeth (10 November 2016) (unreported elsewhere)
BEF is the freehold management company of an apartment building in Southwark. Mr C is the leaseholder of one of the flats. According to BEF, Mr C had been letting out the property on Airbnb and other short term letting sites since at least November 2014. Following complaints from other residents about noise and disturbance, BEF asked Mr C to stop, but he did not. BEF considered that this use was a breach of several lease clauses.
BEF issued proceedings for an injunction in the County Court to prevent the use for short lets. Mr C defended on the basis that the letting hadn’t happened, documentary evidence from the Airbnb site couldn’t be relied upon, there was anyway no breach of lease and he counterclaimed for harassment for singling him out and making spurious allegations. In any event, he asserted the use had stopped.
The lease clauses BEF relied upon were:
Not to use or permit the use of the Demised Premises or any part thereof otherwise than as a residential flat with the occupation of one family only. (The main clause relied upon)
Not at any time to assign sub-let or part with possession of part only of the Demised Premises.
Not to part with or share possession of the whole of the Demised Premises or permit any company or person to occupy the same save by way of an assignment or underlease of the whole of the Demised Premises.
Without prejudice to the absolute prohibitions hereinbefore contained not to assign or underlet the whole of the Demised Premises without the prior written consent of the Landlord such consent not to be unreasonably withheld.
After trial, District Judge Desai granted an injunction. An application for permission to appeal was refused. The DJ found breach of lease clauses. While there is no transcript of judgment (yet), it appears from the terms of the injunction order, that breach was found in respect of:
Using the property otherwise than as a residential flat for the occupation of one family only
Parting with or sharing possession of the whole of the Demised Premises or permit any company or person to occupy the same save by way of an assignment or underlease of the whole of the Demised Premises.
Assigning or underletting the whole of the Demised Premises without the prior written consent of the Landlord, such consent not to be unreasonably withheld.
An injunction forbidding such use for 4 years was granted. Permission to appeal refused and costs to the claimant. The counterclaim, if indeed advanced at trial, was not upheld.
We understand Mr C has sought permission to appeal out of time. We’ll update with any significant developments. (Full discosure – my firm acted for BEF.)
Meanwhile, over the river in Westminster, a forfeiture case was reported in the newspapers. The most detailed link, unfortunately, is to the Daily Mail (I’m sorry).
Ashley Gardens Freeholds Limited v Linda Marinelli Landor. County Court at Central London. 4 April 2017?
Ms L is (was) the leaseholder of a flat in an apartment block, overlooking Westminster Cathedral.
These were forfeiture proceedings, in which Ms L was accused of continuing to let out the property on Airbnb and similar sites for short term lets and for parties. There had apparently been a previous First Tier Tribunal determination of breach of lease for these uses, but the allegation was that Ms L had persisted.
Despite Ms L’s apparent case that these were family and friends, and that any apparent payment was a donation to her arts foundation, the court was not impressed, finding this ‘blatantly untrue’.
‘It was and is a business obviously dedicated to supplementing her very meagre income and thereby allowing her to maintain a style of living which she enjoys and enjoys sharing with others.’
Ms L was found in breach of – as far as I can tell from the Mail report (so, not reliable) – lease clauses forbidding:
- use other than occupancy for a single family
- Use for a business
These were repeated breaches from the FTT decision. It would seem that , after that FTT decision, Ms L had promised to abide by the terms of the lease. The fining here was that she had not. There was continued disturbance and annoyance to other lessees in the building.
Ms L clearly had a degree of sympathy from the court, despite HHJ Lochrane observing variously that “Unfortunately, Mrs Landor has demonstrated over very many years that she either does not understand the rules or feels that they do not apply to her.” and “Mrs Landor has been given a chance and has, to stray into the vernacular, blown it spectacularly.”
Forfeiture was ordered, but delayed for 6 months to give Ms L an opportunity to sell the flat.
Update: I have found Ms L’s previous Tribunal cases, both of them. There is a 2010 LVT decision finding breach of covenant not to ‘use other than a private residential flat in one occupation only’ because of frequent paying guests. Then there is a 2014 FTT decision finding continued breach of the same covenant.