Stopping Airbnb Richard Clarke and Brooke Lyne - www.propertylawconference.co.uk - Landmark Chambers

www.propertylawconference.co.uk

  Stopping Airbnb
Richard Clarke and Brooke Lyne
             #PropertyLawConf

Introduction
•   Growth in the short-letting sector
•   Why do landlords care?
     – Breaches of mortgage and insurance conditions
     – Damage, complaints, nuisance and annoyance
     – Negative impact on local housing market
•   Regulation of this sector is unlikely in the short to medium term

                                    #PropertyLawConf

Starting with the Lease – Construing Covenants
• Arnold v Britton [2015] UKSC 36
    - Swept away the importance of the canons of construction
    - Focus on the actual words used
• Every lease is different
• The slightest difference in the words used can have a dramatic effect on
  the correct interpretation
• Other cases are of limited relevance

                               #PropertyLawConf

Starting with the Lease – Alienation Covenants
• Covenants against subletting
   - Parting with possession?
   - Bermondsey Exchange Freeholders Ltd v Koumetto (Central London
   CC, 1 May 2018)
        • “Not at any time to assign sub-let or part with possession of part
           only of the Demised Premises.”
   - Qualified covenants
   - Reasonable refusal of consent
                                #PropertyLawConf

Starting with the Lease – User Covenants
• For residential purposes:
   - “Use as a single dwelling”;
   - “Use as a private dwelling house”;
   - “Use as a residential flat for the occupation of one family”
• Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC)
   - Prohibited use other than as a “private residence”
   - Relied on Caradon District Council v Paton [2000] 3 EGLR 57

                              #PropertyLawConf

Starting with the Lease – User Covenants

• Laxcon Developments Ltd v Rogers (FTT, 8 June 2015)
   - Shall not be used “for any purpose whatsoever other than as a private
   residence for occupation by a single household”
• Roundlistic Ltd v Jones [2016] UKUT 325 (LC)
• O’Connor v The Proprietors Strata Plan [2017] UKPC 45

                               #PropertyLawConf

Starting with the Lease – User Covenants

• Snarecroft Ltd v Quantum Securities Ltd [2018] EWHC 2071
   - “not to use the premises or any part thereof other than for residential
   purposes”
• Prohibition on business use
   - “shall not carry out any trade or business”
   - Florent v Horez (1984) 12 H.L.R. 1

                                #PropertyLawConf

Starting with the Lease – Nuisance and Annoyance
• “Nuisance” includes behaviour that would fall within the tort of nuisance,
  but “annoyance” means something more (Tod-Heatly v Benham (1888) 40
  Ch.D. 80)
• Florent v Horez (1984) 12 H.L.R. 1
• Laxcon
    - parties, excessive music, police attendances and people ringing the
    wrong door bell at unsociable hours
• Practical problems of evidence
                                #PropertyLawConf

Starting with the Lease – Sweeping up provisions
 • Insurance covenants
 • Mortgage condition covenants
 • Covenants requiring all leases to be in the same form
     - Waiting on SC judgment in Duval v 11-13 Randolph Crescent Ltd
 • Unlawful use covenants generally
 • Covenants that specifically prohibit breaches of planning law

                               #PropertyLawConf

Liability for subtenants
 • What if a lawful subtenant uses the property for Airbnb?
 • Patel v K&J Restaurants [2010] EWCA Civ 1211
    - Knowledge and action of the lessee will be crucial to the question of
    whether she is entitled to obtain relief from forfeiture

                                 #PropertyLawConf

Remedies
• Forfeiture
   – Determination under s.168, Commonhold and Leasehold Reform
      Act
   – Relief?
• Injunctions

                          #PropertyLawConf

The Planning Angle
•   London
     – Different planning rules apply
     – Section 25, Greater London Council (General Powers) Act 1973
          “use as temporary sleeping accommodation of any residential premises
            in Greater London involves a material change of use of the premises
            and of each part thereof which is so used”
     – Section 44, Deregulation Act 2015
          Relaxation of restrictions on short term use
          90 night limit           #PropertyLawConf

The Planning Angle
•   Outside of London
     – No limit
     – Up to individual planning authorities to decide whether short-term lettings
         amounts to a material change of use
•   Enforcement
•   Moore v Secretary of State for Communities and Local Government [2012] EWCA
    Civ 1202

                                  #PropertyLawConf

Thanks for listening

RClarke@landmarkchambers.co.uk

BLyne@landmarkchambers.co.uk

          #PropertyLawConf