Covenant Prohibiting Use Other Than as a Private Residence Breached by Short-Term Lettings

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In the case of Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC) the Upper Tribunal (Lands Chamber) held that a tenant had breached a covenant in their residential long lease that prevented the use of the flat for any purpose other than as a private residence.

The tenant had set up a website advertising the flat as an alternative to a hotel and used a reservation system which published the details of the availability of the property on several different websites. They had subsequently let the flat out 7 times over the course of a year.

The First-Tier Tribunal held that as the individuals occupying the flat on a short-term letting were not occupying the property as their home, it followed that the property was being used other than as a private residence. On appeal, The Upper Tribunal upheld this decision and further stated that there has to be a degree of permanence to the tenant’s occupation and that this would require that the occupier resided in the property for more than a weekend or a few nights in the week. The Upper Tribunal acknowledged that this case was fact-specific and that each case would depend upon the covenant in its own factual context.

However, this case is still an interesting comment on a current trend where residential property owners advertise their properties, as alternatives to hotels, on the internet in return for a steady income stream.

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