There is a lot of interest in the present trend for letting property for short term or holiday lets on the internet. The greatest demand is often in cities where many of the properties are flats and are therefore let on long leases.

The long leases of flats commonly contain a covenant by the tenant not to use the property for any purpose whatsoever other than as a private residence.

In a recent Upper Tribunal decision the tribunal decided that a tenant had breached such a covenant in their long lease of a flat by advertising the flat on the internet for short-term lettings and granting a series of such lettings.

The tenant (T) owned the long lease of a flat in a purpose-built block of flats. T had advertised the flat for short-term lettings on the internet and had granted a number of such lettings.

Evidence was given that:

• T paid council tax and utility bills for the flat.
• The flat remained T’s main residence although it had recently remained empty for 75% of the year. 
• T only let the flat out for about 90 days a year and that T’s lettings were almost all to business visitors (not holiday lets in this case). 
• At the time of the hearing T stayed in the flat about three or four days a week. On the other days she stayed with her boyfriend. 
• T had let the flat out on about seven separate occasions in the twelve months before the hearing. 
• T had set up a website advertising her and her boyfriend’s homes as alternatives to hotels.

After the Lower Tribunal decided that T had breached the covenant in her lease, T appealed to the Upper Tribunal which also found against her. 

It acknowledged that a person occupying a flat on a short term basis could have more than one residence: a permanent residence that they called home, as well as other temporary residences which they might use while they are away from home on business or on holiday. It was therefore immaterial that the occupier might have another more permanent residence elsewhere. 

Nonetheless, there had to be a connection between the occupier and the flat so that the occupier would think of it as their residence. In other words, the current occupier must use the flat as their private residence for the covenant to be observed.

The Tribunal indicated that there had to be a degree of permanence for a property to be used as the occupier’s private residence, which meant the occupier would need to reside in the flat for more than a few nights. In the Tribunal’s view a person who occupies a property for a matter of days and then leaves, was not using the property as their private residence. 

The Tribunal acknowledged that each case would depend on the particular wording of the lease and the particular facts of the case. Nonetheless, the case is still an interesting indication of the application of the law to the current trend for residential property owners to advertise their properties as alternatives to hotels, to create an income.