Renting out your ‘residential dwelling’ on a short term let
Depending on where you live, renting out your flat or house on Airbnb can earn you significantly more than if it had been let on an assured shorthold tenancy. In some circumstances the weekly ‘rent’ can exceed the standard monthly rent.
But if you were to hire out your property under a short term weekly let, would you be acting lawfully?
Flats and houses are classed as residential dwellings for planning law purposes. Under the Town and Country Planning (Use Classes) Order 1987, this is ‘C3’ use. However, how is ‘residential dwelling’ defined? This was recently considered in a Scottish case and as such will not be binding in England but the principles are the same so it provides an interesting insight into how a similar scenario would be treated south of the border.
A property in Edinburgh was used by short term visitors. The increased comings and goings of tourists began to annoy the neighbours. After a complaint to the local authority, the council took enforcement proceedings against the owner which resulted in a court case.
The owner argued that even though the property was used for short term holiday lets, it was still essentially a single residential dwelling. The key issue to be decided by the court was the likely disturbance caused by the use as a short term let against the use of an individual user. The court found that the number of arrivals and departures, with associated movements within the communal stairway and landing was likely to be much more from renting as a short term holiday let to that associated with a single permanent resident. As a result, the court determined that there was a material change of use which would require planning permission.
When renting the flat in this manner, the owner would have to apply for change of use to Class C1 use – the same as for hotels, guest houses and hostels.
On an additional point, if the change of use resulted in different planning usage of the property, this would also be a breach of most flat leases as they usually contain covenants to use the property as a single private dwelling and not to apply for planning consent (without the consent of the landlord). Therefore, a flat owner runs the risk of the landlord taking enforcement action against them which could result in forfeiture of their lease.
Oliver Ray is a solicitor specialising in commercial property law in the Property department at Barker Gotelee Solicitors in Ipswich.