Property legal Q&A: What legal issues should I consider before I let a leasehold flat in a mansion block?

 
Hema Anand
Albert Court Mansions in Kensington

Question:

I own a leasehold flat in a mansion block and am considering letting it on a daily/weekly basis. What legal issues should I consider before doing so?

Answer:

The success of Airbnb and similar providers of short room/property rentals has increased significantly over the past few years, but there are several factors to consider before making your property available for short term rental.

If you have a mortgage, you must check whether or not the terms of the mortgage allow for short lettings of your property. If you are in breach, a lender can withdraw the mortgage and demand repayment of the loan.

You must consider the terms of your lease. Some leases do not allow a property to be sub-let, or require landlord’s consent before doing so. Many leases contain a provision stating the property can only be used for residential purposes and renting for short periods of time on a regular basis could be treated as carrying on a business and therefore in breach of your lease. A landlord can take action against you for the breach, which may include an injunction to prevent further short lets.

You need also to check the terms of your home contents insurance policy (as well as the buildings insurance policy) as to sub-letting, to ensure you do not invalidate the policies.

Do also bear in mind that several local authorities and London Borough Councils, require planning permission where the property is let for income for more than a total of 90 days in the year. Many councils are collecting evidence and actively taking enforcement action against owners who have not first received the appropriate planning permission.

There are also practical considerations such as the disruption to other occupiers within the building, where complaints often stem from the noise as various occupiers move in and out of the property or use it in a noisy way. Tax is likely to be payable on the rent, as well.

Bircham Dyson Bell is a multi-disciplinary UK law firm advising private companies, public sector bodies, not-for-profit organisations and individuals since 1834. Visit bdb-law.co.uk to find out more

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