Leasehold dreams and nightmares

Flats remain a fertile source of litigation whether in relation to the right to enfranchise or the interpretation of lease covenants, advises Glenda Ferneyhough.

The Upper Tribunal decision in Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC) is a warning for flat owners of the potential risk in offering their properties as holiday lets in Airbnb or similar schemes.

The lease contained a covenant that is often found in a lease of a flat ‘not to use or permit the flat to be used other than as a private residence’. The judge had no difficulty in distinguishing the occupation of the flat for a few days with occupation by a friend or a subtenant. In the former case, the transient nature of the occupation was fatal, as the occupant would not consider that the property was his private residence. Accordingly, the judge confirmed the decision of the First-Tier Tribunal that the flat owner had breached the covenant in granting short-term lettings.

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If you would like more information or advice relating to this article or a Commercial Property law matter, please do not hesitate to contact Glenda Ferneyhoughon 01727 798071.

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