Thousands of people who use Airbnb to let out their leasehold properties are potentially breaching their leases, and could be in danger of losing their homes, according to a recent ruling from the Upper Tribunal (Lands Chamber), the highest property court in the land.
The verdict came after a woman who was letting out her flat via Airbnb fell out with her neighbours in a development in north London. Residents asked the freeholder of the block to act, and the case went to court. The court ruled that residents whose leases state that their property must be used as a ‘private residence’ may be violating that rule when hosting residents on Airbnb.
The implication of the case could be huge to the millions of Airbnb hosts who may have breached their lease terms unwittingly. Anyone who lives in a leasehold flat that is defined as a private residence could be in breach if the freeholder discovers the flat is being let out to paying guests for short periods. Many landlords already ban short-term subletting in their tenancy agreements, which means tenants who host on Airbnb could face eviction.
Even if you are allowed to let your property, you could be unknowingly jeopardising your insurance—if you don’t alert your insurer about plans to host, your insurer could invalidate your cover. Although Airbnb provides a ‘host guarantee’ that promises to ‘reimburse eligible hosts for damages up to £600,000’, the host guarantee should not be a replacement for home or tenants’ insurance. The Airbnb guarantee does not protect the owner’s cash and securities, pets, reasonable wear and tear, or common areas. It also only offers limited protection for jewellery, collectibles and artwork.
If you’re considering letting out your property, be sure to consult your lease. Also be sure to inform your building and contents insurer, or face the risk of your insurer invalidating potential claims.