According to Giles Peaker in his Nearly Legal Blog, Southwark council have decided that their Right-to-Buy leases should contain covenants that would prevent Airbnb type short-term letting of the whole property, and will be writing to their leaseholders to tell them this.

The covenants that Southwark are apparently relying on are

“not to use or suffer the flat to be used for any purpose other than as a private dwellinghouse” and

“not to do or permit or suffer to be done any act or thing which may be or become a nuisance or annoyance to the council or to the Lessees owners or occupiers of adjoining or neighbouring property”.

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The nuisance clause is straightforward enough says Mr Peaker, so long as nuisance or annoyance has indeed been caused. “That is a matter of evidence and though nuisance and annoyance to neighbours may indeed very well result from short term letting use, it is not an inevitable result,” he says.

So, the general prohibition on short lets relies on the ‘private dwellinghouse’ restriction.

As we have seen in Nemcova, says Mr Peaker, the Upper Tribunal found that ‘not to use other than as a private residence’ was not compatible with short lets, as that was not used as a ‘residence’. The question then will be whether ‘dwellinghouse’ and ‘residence’ have the same, or similar enough, meanings for short lets to be a breach.

This is the kind of question that makes Landlord and Tenant lawyers so popular at parties, says Mr Peaker. For what it is worth, “I think it is likely that ‘dwellinghouse’ will have the same effect as ‘residence’,” he says. “That said, there is a complicated case history that means the two may not be synonymous. But then again, there may not be a relevant difference in the ways that they are not synonymous. If this gets in front of a court or tribunal, someone is going to have fun.”

“Of course, for the leaseholder, this may well turn out to be expensive and unsuccessful fun. The combination of pressure on the 90 days use per year planning permission limit and Southwark threatening breach of lease proceedings should make any Southwark RTB leaseholder – or those looking to buy one with a view to Airbnb/short let use – think twice about letting out the whole flat on short lets.”

“I would anticipate that other Councils will also be looking at their RTB lease clauses in relation to short let use. And if not, why not?, says Mr Peaker.

Author: Giles Peaker

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