The number of short-term lettings in England and Wales has increased vastly in recent years. The development and growth of the ‘sharing economy’ and the ease of use of ‘peer-to-peer’ accommodation websites (of which there are several that are very well known) can be a real temptation for property owners to dip their toes into the short-term and holiday let market.
However, the increase in properties on such websites has been matched with a wave of reported case law which examines the legalities of these arrangements. Many property owners are unaware that their plans to enter the short-term lettings market could easily be thwarted – and it would be unwise for any landowner to contemplate entering this market without understanding their legal position.
The Covenants
Aside from any public law planning rules that may come into play, landowners need to be aware of any covenants that apply to their property. If you have a leasehold flat, then it is likely there may be a significant number of covenants that you as a tenant must abide by. Equally, freehold owners of property may find that their home has a number of restrictive covenants that control what can and cannot be done with the property.
Covenants often contain restrictions on who can use a property – “single private dwellinghouse,” “dwellinghouse for the sole use of the registered owner” and “private dwelling” are some of the variations that often appear. Sometimes, the covenants then go further and also include terms that prevent trade or business or commercial use.
Space does not permit a detailed look at some of the recent case law. Suffice it to say by way of summary that the devil is in the detail. Each and every word of your particular covenant could be significant, as can the finest of details about quite how your property is being used. But the takeaway has to be that if you have covenants that include terms that refer to how the property can be used, your proposals for launching into the short-term rental market may be stopped in their tracks.
Covenants are rarely as clear as they seem, and restrictive covenants (where enforceability also needs to be considered) can be particularly tricky for landowners to understand.
How can Tozers help?
Given that getting this wrong can have financial major implications, the best advice is always to take advice. Our team would be happy to assist with your queries.
