Airbnb and subletting in social housing – a guide for registered providers

From low level noise through to full blown party houses, Airbnb and subletting is creating a broad range of issues for registered providers (RPs). That was the message that came through loud and clear at a recent event we held to discuss the impact of the room-letting website on the social housing sector.

So if you’re a social landlord seeking to manage residents who are letting out their properties, here’s our guide to the options available.

Leasehold properties:

Subletting is typically allowed under a long lease, but if nuisance has been caused to other residents, this may be a breach of mutual covenant, which could be relied upon when issuing proceedings for breach of lease.

If a property is let out as holiday let on Airbnb or via similar website, a recent case (Nemcova) has introduced a ‘private residence’ test. If a lease states that the property can be used as a private residence only, it can’t be rented out on a short-term basis ie a few days or weeks otherwise the leaseholder will be in breach of their lease.

This was however, a fact specific case so it is important to consider individual lease terms and seek legal advice if unsure. For example, the rest of the lease may contain additional clauses prohibiting the leaseholder from using the property for business purposes, and provisions in respect of nuisance and annoyance may be relevant.

Right to Buy/Preserved Right to Buy properties:

For leaseholders who have bought their properties under Right to Buy/ Preserved Right to Buy (or Voluntary Right to Buy in the future), subletting is normally permitted with conditions, so is unlikely to form the basis of a claim.

In holiday let cases however, leaseholders are not usually permitted to use the premises for anything other than ‘residential purposes’. This wording may be different from ‘private residence’ but following the Nemcova case, landlords could potentially argue that residential purposes would not include using as a holiday let for a few days or weeks.

Shared Ownership:

For shared owners, subletting is prohibited until the shared owner owns 100% of the lease after which it may be allowed depending on the lease terms. Until this point has been reached, landlords can serve a Notice of Seeking Possession to terminate the tenancy.

If shared owners are offering their properties as a holiday let, a shared ownership lease usually specifies that the property should not be used as anything other than a private residence, so the Nemcova case is directly applicable.

Assured, secure and fixed-term tenancies:

The “only or principal home” condition combined with a subletting restriction means a landlord is already in a much stronger position when seeking to enforce the terms of the tenancy.

If the tenant is letting out the property as a holiday let, then it’s also likely that they will have breached the condition not to use the premises for business purposes. Furthermore, it’s not uncommon for holiday guests to cause nuisance and annoyance to long-term residents and this would further be a breach.

As with any possession claim, the landlord should seek to demonstrate as many breaches as possible as well as relying on an NTQ or forfeiture notice in the case of a fixed-term tenancy on the basis of non-occupation/subletting.

Unlawful Profit Orders:

It is possible to seek Unlawful Profit Orders against tenants (but not leaseholder or shared owners) who have:

  • sublet the whole of the property or part of their property without consent
  • ceased to occupy the property as their only or principal home
  • received monies in excess of their rent.

It is advisable for landlords to work out the fee being charged to subtenants or holiday let guests as this would form the basis of a money claim which might act as a deterrent to other tenants attempting to do the same thing.

For further information on Airbnb and subletting, including the options available, contact Anna Bennett in our specialist housing management team.

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