Bermondsey Exchange Freeholders Ltd v Ninos Koumetto (as Trustee in bankruptcy of Kevin Conway)
It is clear that Airbnb letting (or some variation of it) will continue to be an area to watch in 2019. Airbnb reports significant increases in their listings throughout the UK. Many of the properties being advertised are leasehold properties. The case of leaseholder Kevin Conway highlighted the issues concerning the legality for leaseholder owners.
Mr Conway began to let his flat out through Airbnb and other agencies. The Landlord of his building raised concerns over additional nuisance and security risks that temporary short-term guests posed. Never mind the fact that Mr Conway had not been given permission to let his flat in this way (which was against the terms of his lease). An injunction was sought at the County Court to restrain the use of the flat for this purpose. The injunction was granted but appealed. However, the appeal was rejected on every ground, and the Injunction was left to stand.
In making their decision, the court reiterated the following points;
- The covenants within Mr Conway’s lease were not uncommon, and the Landlord must provide consent to use of the flat in this way. Consent had not been obtained, and the lease was therefore in breach.
- The flat was to be used as a residential property with the occupation of one family only. By subletting it out in this way, it had ventured into a commercial arrangement for financial gain – again a further breach of the lease.
There are not many leases that make allowances for this type of letting without (at the very least) permission of the Landlord. However, many leases were written long before Airbnb was in existence. Expect further developments on this front as Landlords and Leaseholders navigate different ways to work with, or around, this type of letting.
