Tenant Found Guilty of Breaching Lease Conditions for Short-term Rentals

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AW/LBC/2019/0092 Property : [ADDRESS], [POSTCODE] Applicant : [redacted] : Miss [COUNSEL] – counsel instructed by [COUNSEL] [COUNSEL] Respondent : [redacted] : [NAME] [COUNSEL] of [NAME] : [NAME] for an order that a breach of covenant or a condition in a lease has occurred Tribunal member(s) : Tribunal Judge [NAME] J F Barlow FRICS Date and venue of hearing : 29th January 2020 at 10 [ADDRESS] [POSTCODE] Date of decision : 29th January 2020

DECISION

2

Decisions of the tribunal The tribunal determines pursuant to s168(4) of the Commonhold and Leasehold Reform Act 2002 (the Act) that there has been a breach of covenant and or condition of the lease dated 23rd June 2005 in respect of the property at flat 2, 104 [ADDRESS] [POSTCODE] (the Property) for the reasons set out below. The [NAME]

1. On 5th November 2019 the applicant applied to this tribunal for an order that there had been a breach of covenant and or condition in the lease dated 23rd June 2005 made between [APPELLANT] (1) and [APPELLANT] [NAME] [APPELLANT] (2) (the Lease). The applicant seeks a determination pursuant to section 168(4) of the Act.

2. The [NAME] states that there has been a breach of clause 3.7.2 of the Lease and regulations 1 and 2 of the fourth schedule to the Lease.

3. These terms state : Clause 3.7.2 – Not at any time to assign sublet for a period exceeding twelve months or part with possession of the whole of the Demised Premises or permit or suffer the same to be done unless there shall previously have been executed at the expense of the Tenant and delivered to the Lessors for retention by them a Deed expressed to be made between the Lessors of the first part and the Tenant of the second part and the person or persons to whom, is proposed to assign sublet or part with possession….” 4. Regulation 1 of the fourth schedule states: “Not at any time to use or occupy or permit the Demised Premises to be used or occupied except as a private residential flat only”. Regulation 2 states; “Not at any time to use or permit the use of either the Demised Premises or any part thereof for business purposes” 5. It is alleged that the respondent has been using the Property for occupation by the general public as an [NAME]. It is said that the Property has been so advertised between October and the date the [NAME] was issued. Indeed, it is said in witness statements from [NAME] [NAME] [NAME], that this useage has continued into the early part of this year.

6. The matter came before us for hearing on 29th January 2020. We had been provided with a bundle of papers which included the [NAME], copies of the freehold and leasehold titles, a copy of the Lease, the witness statements of [NAME] [NAME], a witness statement from [NAME] [RESPONDENT]

3 a director of the respondent and a skeleton argument prepared by Miss [COUNSEL], counsel for the applicant. We noted all that was said. Hearing 7. We asked [NAME] [NAME] in the light of his witness statement whether he accepted that had been a breach of the lease. In particular paragraph 5 which reads “The sole purpose of the business was to purchase a lease to rent out on a short term basis. I had made this explicitly clear to both the lender and the conveyancer and neither had expressed any concerns.” He accepted that there had been a breach in that the use of the Property was a business in breach of regulation 2. He said that the breach had stopped. 8. [NAME] [NAME] did tell us that as soon as he had discovered there was an issue he had cancelled the bookings through [NAME] as best he could, although was reluctant to do so at short notice so as to impact on the holiday plans of his users. There is some dispute as to when the useage did stop as [NAME] [NAME] alleges in his second statement that such useage could have continued in 2020, whereas [NAME] [NAME] says it stopped in or about 8th December 2019.

9. Apparently from about 18th December 2019 he has instructed agents to secure a longer term AST letting but wanted to clarify the terms upon which he can do so. He told us that presently the Property is empty. He said that he had never tried to mislead the applicant or to hide the arrangements. He accepted that he had not fully appreciated the terms of the Lease. He did think that the actions of the applicant were disproportionate and that he wished to have a good relationship with his landlord. The Property had apparently been bought as an investment for a ‘disabled child’.

10. Miss [NAME] referred us to her skeleton argument which set out the basis upon which the [NAME] had been brought. It was she said an issue of trust. [NAME] [NAME] indicated that he considered that the lettings were taking place beyond the dates suggested by [NAME] [NAME] but did concede that he could not be certain that the allegations relating to letting in later December and January 2020 were evidence of a continued breach.

11. In the skeleton argument we had been referred to the UT case of [NAME] v [COMPANY] [2016 UKUT 303 (LC) where is HHJ Bridge held, dismissing the appeal that “in order for a property to be used as the occupier’s private residence there must be a degree of permanence going beyond being there for a weekend or as few nights in the week. Where a person occupies a property for a matter of days and then leaves, the occupation is so transient that the occupier would not consider the property to be his or his private residence even for the

4 time being. Granting short term lettings (days and weeks rather than months) as the lessee had done was a breach of the user covenant.”

Findings 12. The admission made by [NAME] [RESPONDENT] on behalf of the respondent has been noted by us. He is a litigant in person and therefore we need to consider the circumstances in which such an admission is made. His witness statement, recited above, clearly and honestly accepts that he intended to use the Property as a business. That is in breach of regulation 2. Further in the light of the findings by the UT in the [NAME] case, it is clear that these short term lets fall foul of the provisions requiring the need for the user to be as “a private residential flat only.” 13. We do not accept the evidence of [NAME] [NAME] that the user of the Property as short term [NAME] went into 2020. The onus of proving that allegation rests with the applicant. [NAME] [APPELLANT] was honest in his acceptance that the times he saw lights and useage after 8th December may have been the agent employed by the respondent, although there was not a compelling answer from [NAME] [NAME] in respect of alleged useage on or about 16th December. It seems to us it matters little as by his own admission there were short term lets until around 8th December 2109 and the entries on the web site indicating later lettings were not sustainable.

14. As to the alleged breach of clause 3.7.2 the language is somewhat clumsy. The use of the Property as a short term let of less than 12 months would not ordinarily require the tenant to enter into a deed of covenant to perform the terms of the lease. We decline to make a finding in respect of this breach.

15. We do find that there has been a breach of regulation 1 and 2 in the fourth schedule and an order is made accordingly. It is hoped that the parties can reach some compromise on this matter. We accept that the respondent has stopped letting in breach of the regulations and would hope that a suitable compromise can now be reached.

Name: Tribunal Judge Dutton Date: 29th January 2020

Rights of appeal

5 By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28 day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28 day time limit; the tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).