In an increasingly tight rental market – partly driven by the government’s reduction of tax deductions for landlords and even more by the threatened abolition of what are pejoratively referred to as ‘no-fault evictions’ but are simply the right to possession at the end of a tenancy – short-term lettings are forming a growing part of the market. This is due to a shifting population with shallower roots in a job or location looking either for a home or to bridge the gap between the sale of their old home and the purchase of their next one.
What rights do tenants have if they take one of these lets? And how can homeowners be sure of getting possession at the end of the contract term? I will use the Airbnb terms of ‘host’ and ‘guest’ to differentiate from a landlord and tenant under an assured shorthold tenancy (AST).
To be an AST, a tenancy must be for a minimum of six months. Moreover, in London these short lets should normally amount in aggregate to no more than 90 days in a year without needing planning approval (in effect to carry on a holiday-let business).
So, I will take the typical short let as being for no more than 90 days on guest terms. That is with the host paying all outgoings, including specifically council tax.
Tenure concerns
A guest on such a let has no security of tenure. If they refuse to leave, and in effect squat at the property, a host cannot simply change the locks and exclude them but will have to go to the court for a possession order.
This will be given, but court delays will mean some time passing before the former guest can be evicted. The host would, in principle, be entitled to damages for the period of unlawful occupation, but that may not be enforceable in practice.
The property must be safe and in a good state of repair; there must be valid gas and electricity certificates and working smoke alarms, for example. That apart, the position rests on contract – the host must provide what is stipulated in the agreement for the stay.
It is also implied that the host warrants that the letting is lawful, which means not only under local or national legislation but also, for example, not a breach of the host’s mortgage terms.
Even more importantly in the case of flats, the short let may be a breach of the terms of the host’s lease. Freeholders, especially tenant-owned management companies, are becoming increasingly impatient with these lettings, not only on the grounds of noise and other nuisance but also for security reasons.
Lease terms
Many leases now ban lettings for less than six months. A series of short lets over the 90-day total can also be seen as use for a holiday letting business and thus a breach of the covenant to use only as a private dwelling (it is a question of fact and degree, but there is clear risk); or against parting with or sharing possession.
Restrictive lease terms would generally override any permissive entitlement under statute, such as the Deregulation Act 2015. Freeholders are right to be concerned, incidentally, as such lettings can breach the terms of the building insurance.
The government has launched a consultation on a registration scheme for short lets, with the aim of “ensuring that England continues to provide safe and high-quality guest accommodation” (the devolved administrations will make their own rules); with the principal options of a mandatory nationwide scheme or an opt- in scheme for local authorities especially affected by these lets, for example those in London or Cornwall.
This seems to be aimed principally at giving local councils data and powers that will monitor both planning use and resultant revenue. There are wider social issues of which the dramatic increase in short lets for non-holiday purposes is an expression, and with which the law will need to keep pace for the protection of hosts and guests alike.
John Stephenson is partner at law firm BDB Pitmans
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