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Holiday Lets and the Law

The use of the term ‘Holiday Let’ is often misused and is bandied about as a heading for a ‘Short Let’ – but this could prove very dangerous in certain circumstances as Frances Burkinshaw explains.

Frances Burkinshaw

Tenancy Agreement image

The Housing Act 1988 (as amended by the Housing Act 1996) clearly laid down the definition of an Assured Tenancy…

  • The property is to be let to an individual(s)
  • The property is to be used as that individual’s sole or principle residence
  • The annual rent is less than £100,000
  • The Landlord is not deemed to be a resident landlord
Frances Burkinshaw image

Frances Burkinshaw

If all of these points are met then it is a fact that the property will be let under an Assured Shorthold Tenancy. It is not up to any person to decide that a let is anything other than an AST if the law says that it is indeed an AST.

In order to have a Holiday Let the occupant must be genuinely on holiday. In other words…

If the occupant gets up late, puts on shorts and sandals and a baseball cap and goes out in the garden to kick a football about with a young son then more than likely that person is on holiday.

If, however, the occupant gets up early, dresses in a business suit and leaves the property with a briefcase, brolly and bowler hat and catches the 7.00am train then I would argue strongly that the person is most definitely not on holiday

SHORT LET OR HOLIDAY LET?

I have had a recent example of a potential problem over a supposed ‘Holiday Let’. A friend of mine purchased a property as their home but the property required major works to be done. While these works were taking place the property would be rendered uninhabitable. The friend therefore approached a company who offered ‘Short Lets’ and ‘Holiday Lets’.

If the occupant rises early, puts on a suit and catches the 7am train, he is not on holiday!

The friend and her partner rented an apartment for two months on a ‘Holiday Let’ agreement. They needed the accommodation quickly, know nothing about residential lettings and so signed the Holiday Let agreement for two months.

They quickly realised that the works to their home were going to take considerably longer than planned and so contacted the landlord to say that they would be staying on. The landlord said they could not stay as the property was already re-let in mid-April.

This caused them an enormous amount of stress and worry; they had understood that they could stay on if necessary.

The question here is whether they actually had an assured shorthold tenancy: 1) they are individuals; 2) the property would have been used as their sole home as the other property was uninhabitable; 3) the rent was well below £100,000 pa; 4) the landlord was not a resident landlord. They therefore met all the requirements for an AST. This meant that they could not be asked to leave earlier than six months and the landlord would have to serve them two months’ notice after four months had passed. None of this happened.

In fact my friends were too frightened of being homeless so found alternative accommodation and will be moving in a few days. It would, however, have been a very interesting case to argue; I wonder what the outcome would have been!

Landlords should be wary of offering property to let under the ‘Holiday Let’ banner. There are also very different tax rules for holiday lets and longer lets which can catch a landlord unawares.

Tenancy types and airbnb

Tessa J Shepperson – a specialist landlord & tenant lawyer and a director of Landlord Law Services adds:

When is a tenancy a tenancy and when is it a Holiday Let – and where does an airbnb ‘let’ fit in?

Assured Shorthold Tenancies – this is the ‘default’ tenancy type which will be created (under the Housing Act 1988) unless one of the exceptions apply. The exceptions are all set out in Schedule 1 of the Act. Most of them will not apply in an Airbnb situation. These are the most relevant:

Holiday lets – this is where a property is let for the purpose of a holiday only. Generally, this will be where the guest has a main home elsewhere and the let is for less than three months. However, these last two on their own do not necessarily mean it is a holiday let, so it is best to actually say in your agreement (if you use one) that the property is being let solely for the purpose of a holiday.

Resident landlords – this is where the landlord lives in self-contained accommodation in the same building, e.g. a granny annex or ‘garden flat’.
Remember
These rules will always apply. The fact that Airbnb describes people as ‘hosts’ and ‘guests’ does not change their occupation rights. Airbnb is just an advertising platform (albeit a very effective advertising platform), a way to find people to rent to and earn money. Using Airbnb does not change the law.

June 13, 2018

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