The lessee of a flat in London breached the conditions of her lease by letting it for short periods to others using the Airbnb website, a tribunal has ruled.
The Upper Tribunal (Lands Chamber) upheld a decision of the First-tier Tribunal that Iveta Nemcova, leaseholder of a one-bedroom flat in Enfield, had breached a covenant not to use the flat "for any purpose... other than as a private residence" by granting a series of short term lettings and advertising its availability on the internet.
Ms Nemcova accepted she had acted in this way but maintained in evidence that the flat remained her main residence. She let the flat for about 90 days a year, on about seven separate occasions in the past 12 months, usually to business rather than holiday visitors, and stayed with her boyfriend when not there herself.
She argued that there were no material restrictions in the lease on underletting or granting short term tenancies or licences, no positive requirement that she reside in the flat herself or occupy it as her principal home, and no covenant prohibiting business or commercial use or use of the flat for holidays. Provided the flat was being used as a private residence by someone, the circumstances of their occupation were immaterial.
The tribunal judge, Judge Stuart Bridge, said the case depended on the terms of the lease and it was "important to be extremely careful not to gloss the terms of the clause so as to impose a requirement that was not intended". The premises were to be used as "a private residence", not "the private residence" of the lessee or occupier. "However, it is necessary, in my judgment, that there is a connection between the occupier and the residence such that the occupier would think of it as his or her residence albeit not without limit of time. In short, for the covenant to be observed, the occupier for the time being must be using it as his or her private residence."
It did not matter, he considered, whether the person occupying paid rent or not, nor was the reason for their occupation decisive. However the duration of their occupation was material. "It does seem to me that in order for a property to be used as the occupier’s private residence, there must be a degree of permanence going beyond being there for a weekend or a few nights in the week. In my judgment, I do not consider that where a person occupies for a matter of days and then leaves it can be said that during the period of occupation he or she is using the property as his or her private residence. The problem in such circumstances is that the occupation is transient, so transient that the occupier would not consider the property he or she is staying in as being his or her private residence even for the time being.
"Having considered the context of the grant of the lease, and the nature of the intended relationship between lessor and lessee taking account of the obligations entered into, I am of the view that in granting very short term lettings (days and weeks rather than months) as the appellant has done necessarily breaches the covenant under consideration."
The judge emphasised that each case would turn on its facts, but held that in this case Ms Nemcova's actions amounted to a breach of her covenant.