Airbnb and Unlawful Subletting: Do You Have a Right to Rent?

Written by Linda Marshall, a Chartered Legal Executive at Spire Solicitors LLP.

Airbnb is a fairly modern phenomenon which allows you to rent out a spare room or your entire house as a short-term let. There are now over 2,000,000 properties listed on Airbnb, and the number of home owners seeking to leverage income from their homes has increased dramatically in recent years. Whilst this option may seem tempting, it is important for you to check whether you have the right to rent out your property in the first place.

When deciding whether to become an Airbnb host, you must establish whether your local planning law permits you to rent out your property on a short-term basis. Some cities have laws that restrict your ability to host paying guests for short periods. This issue has recently been in the news as New York, Singapore, Japan and parts of Spain have now restricted or banned short-term holiday lettings. In the UK, Greater London has a restriction which prevents hosts from renting out their property for longer than 90 nights. If a host wishes to exceed this limit, they must apply for “material change of use” planning permission from their local authority. Additionally, if your property is available to let for 140 days or more per year, it will be deemed a self-catering property and therefore will be subject to business rates. These rules can be confusing and you should contact your local authority planning department to see if any planning rules apply.

If you own a flat or maisonette, it is highly likely that it is leasehold-owned. In many cases there will be a clause or covenant which places some restriction on subletting the property without the freeholders consent. If a freeholder believes a leaseholder has breached this lease covenant, the freeholder can serve a section 146 notice which could end the leasehold interest and remove the leaseholder from the property. Therefore you will need to check your lease first to ensure no restrictions apply.

You will also need to check the terms of your mortgage deed. As your mortgage company has a legal interest in the property, they also have a right, via the terms of the mortgage deed, to say what you do with it. Unless you have a “buy to let” mortgage, it is likely your mortgage deed will prohibit subletting.

If you are a tenant, you will need to check your tenancy agreement. Most landlords will not permit any subletting of the property without their permission first. If your landlord finds out that you have been subletting, it is likely they will evict you from the property.

If you would like to discuss any points in this article further, please contact Spire Solicitors LLP on 01603 677077 for all your legal needs.