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Knock Knock, Who’s There? Landlords Beware the Short Term Let.

Renting out space on a short term basis has become increasing popular thanks to websites such as AirBnB. Homeowners and leaseholders across the world are making extra cash by advertising their spare rooms online and welcoming strangers into their properties. The arrangement has clear advantages but landlords should be wary of what seems too good be true. A few checks and giving some thought to the potential issues that can arise could save you a lot of time and hassle in the long term.

Even landlords with large numbers of residential properties that are subject to long-term leases should take note of the short term let phenomenon. You may not be advertising your properties on Airbnb, but would you know if your tenants were?

The Good

You can increase your income with minimal effort beyond making sure the sheets are clean. You could even take advantage of the £11,000 tax-free allowance for those renting out a spare room.

Some landlords may find themselves able to earn more through a series of short-term lets than they do with a long-term lease depending on the locality of the property. Popular events can also drive up the cost of accommodation and tourists are increasingly turning to a short term let to ensure they have a place to stay when a lack of availability drives up the cost of hotel rooms.

The Bad

Some leases contain covenants prohibiting the use as anything other than a private residence. A short-term let could breach those covenants and cause difficulties. If you’re concerned that your tenants are granting short-term lets to strangers without your consent then you need to consider whether to take action.

Landlords need to be mindful of any rules that are specific to their locality. For example, in London, properties can only be made available for short term lets for up to 90 days in a year. Breach of this rule could find landlords in hot water with the authorities.

The Ugly

Mortgage and insurance providers are likely to take an interest in the provision of short term lets and landlords will need to be aware of the terms of their mortgage and insurance policies. Some mortgage providers prohibit sub-letting even on a short-term basis without written consent and that consent can come at a price.

Insurance providers may also refuse to pay out under a policy for damage caused during a period of sub-letting. A short term let could change the basis of your policy so you will definitely need to keep your insurers up to date and pay any premiums that are increased. Even if you do not allow your tenants to grant short term lets, you may need to take action to stop them from doing so to prevent insurers from arguing that you have allowed a breach of policy to take place without taking action.

There could be a risk that the short-term tenants refuse to leave the property. As the ultimate landlord, you’re going to want any trespassers evicted as soon as possible to regain possession. This may require legal proceedings which can take up to three months to conclude.

If you have any questions about the legality of a short term let and how to proceed with tenants that you suspect may be advertising for paying guests, please contact Acuity Legal for advice. 


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