The tenant owned a long lease of a ground floor flat in a purpose-built block of flats. The lease contained a covenant which imposed a prohibition ‘not to use the flat or permit it to be used for any illegal or immoral purpose or for any purpose whatsoever other than as a private residence’.
The tenant advertised the availability of the flat for short-term lettings on several flat sharing websites and had allowed the flat to be let to business visitors on around 7 separate occasions over a twelve month period. The tenant lived in the premises approximately 3 to 4 days a week and let the flat for approximately 90 days of the year. The tenant’s neighbours became concerned about strangers regularly staying in the premises and requested the Freeholder to take action against the tenant.
The tenant argued that by continuing to pay council tax and bills and staying at the premises ‘three or four days a week’ she was not in breach and was using the property for ‘private residence’. She also argued that there was no explicit bar on charging people to stay at the premises for short periods whilst it was not occupied.
The Upper Tribunal found in the Landlord’s favour. The Tribunal held that the tenant had breached the covenant as a degree of permanence for a property to be used as the occupier’s private residence and this required the occupier to reside in the property for more than a weekend or a few nights in the week.
The decision was based on the specific lease and the Tribunal commented that it was not possible to give a definitive answer to the question of whether a tenant would breach a covenant which restricted the use for private residence only by advertising the availability of their flat on the internet for short-term lettings. The Tribunal acknowledged that this case was fact specific and the construction of the particular covenant in its own factual context would need to be considered.
This case provides a useful summary of the law and its application to leases and will be of particular interest to residential landlords and tenants given the increasing popularity for residential property occupiers to advertise their properties on the internet as alternatives to hotels. It is essential that tenants check leases or tenancy agreements carefully before doing so to ensure that they do not fall foul of any covenant restricting use.
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