Airbnb renting and the law – do you have the right to rent?

This is the second post in my Airbnb series.

Today I am looking at whether you have the right to rent out your property in the first place.

The fact that a house or flat is your home, does not necessarily mean that you have the right to do what you like with it.  For example – you may not have the right to rent it out to tenants or licensees.

Let’s take a look at the issues:

Planning

Most lets via Airbnb are for relatively short periods. A few days or a week or so. Mostly for people on holiday.

Often though there are local regulations forbidding short lets. For example in London.  Although recently, in Lonon, this rule has been relaxed, under s44 of the Deregulation Act 2015 which provides as follows:

… the use as temporary sleeping accommodation of any residential premises in Greater London does not involve a material change of use if two conditions are met.

The conditions are basically that

• the total number of nights does not exceed 90 and
• that the landlord pays Council tax.

If you are not in London, note that similar planning rules may apply in your area – if you are not sure, contact your Local Authority planning dept.

If you breach these rules, for example, if you rent your property as ‘temporary sleeping accommodation’ for more than 90 days in London, you could be prosecuted and fined. Note that Magistrates Courts fines are now unlimited.

The other planning issue relates to HMOs.

If a property is rented to three or more sharers who form more than one ‘household’ (ie are not one family) then you may also need planning permission. Again, have a word with your local planning dept if you think this could apply to you. You will also find some guidance here.

Long leases

If you own your property on a long lease you need to be very careful and read your lease before doing anything.  It may prohibit subletting.

This has been highlighted by a recent case, Nemcova v. Fairfield Rents Ltd the Upper Tribunal which held that if the flat owner only lives in the property for a few days per week, this does not give the necessary ‘degree of permanence’ to satisfy the requirements of her lease (see a report of this case on Nearly Legal).

So always check your lease. Breaching the terms of your lease can have very serious consequences, which can include forfeiture of the lease itself.

Short lets and social housing

You will also, in most cases, be in breach of your tenancy agreement if you sublet your property if you are a tenant in either the private or the social housing sector (although it is possible that this could be an ‘unfair’ clause if it is not drafted properly).

I understand that social housing tenants are generally allowed to take in one lodger – but if you want to do anything more than this, you need to get permission. Most private sector tenancy agreements will prohibit subletting altogether.

If you persistently sublet you are at risk of losing your property.

In the private sector, illegal subletting will also result in bad references which will make it more difficult for you to find anywhere else to live.

Other restrictions

If you have a mortgage you should check the terms of your mortgage deed. You should also check to make sure that subletting will not invalidate your insurance policy.

If you are renting to sharers, note that you may also need to get an HMO license. Failure to do this can result in prosecution and a hefty fine.

Again, if you are not sure if this is required or not – speak to your Local Authority. They will have a housing advice service.

The next post

Assuming you do actually have the right to rent out your property and are not breaching any laws by doing so – that is not the end of it. You also need to comply with all the various rules and regulations.

These will depend to a certain extent on the type of occupation your visitors will have. We look at this in the next post in this series.

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Note – If you are an Airbnb host looking to learn more about your legal rights and obligations – click here.