Interesting article from the Times this week. Worth sharing.

Mark Loveday
March 17 2017, 12:01am,
The Times
I rent out a flat on a 12-month tenancy, but am thinking of using it for short-term rentals, such as Airbnb. However, the building’s management company has told everyone our leases do not allow this. They rely on a provision that requires each flat to be used as “a private residence only”. Can they stop me renting my flat through Airbnb?

This kind of restriction is commonly known as a “user” clause, which come in many shapes and sizes. They may prohibit something such as “business use”, or they may permit or require the premises to be used “by one family only”, or as “a dwelling-house”, a “single dwelling”, “a private dwelling-house”, or “a private residence”.

Each of these phrases can have a slightly different meaning — and the meaning of the same phrases may change from lease to lease. The courts use established principles of contractual interpretation when trying to work out exactly what these phrases mean.

The question whether a short-term letting infringes a user covenant has come to the legal forefront as a result of the 2016 case of Nemcova v Fairfield Rents (sometimes referred to as the “Airbnb case”). In Nemcova, the user clause stated that the leaseholder must not “use the Demised Premises . . . for any purpose whatsoever other than as a private residence”.

The Upper Tribunal decided this meant the flat could not be rented out for short-term lettings.
The judge decided the user clause required any letting to have “a degree of permanence going beyond being there for a weekend, or a few nights in the week”.

The crucial issue was the length the occupiers stayed in the flat and this meant that “very short-term lettings (days and weeks rather than months)” breached the user covenant in the lease.

It follows that although the context of your lease may differ, you would probably break the terms of your lease by renting out the flat for very short periods.