Menu

Council tenant ordered to pay £100,000 following unlawful Airbnb lets

Counting British pounds Print publication

25/09/2019

Karl Anders, Housing Management & Litigation partner at Walker Morris reports on recent action taken by a Local Authority to tackle the issue of Airbnb-style short term lets.

‘Airbnb’-style lets – ongoing issues

Walker Morris has reported previously on the various legal and practical problems arising from the ‘Airbnb’ short-term lets model. In particular, in our most recent briefing we highlighted the fact that Westminster City Council has estimated that as many as 1 in 15 housing units in its Borough are being let as short-term rentals. That equates to around 8,000 properties in that Borough alone, which are consequently not available for long-term residents needing to work and live in the area.

Such lets often involve breaches of residential lease covenants, mortgage conditions, insurance provisions and planning laws; and can give rise to noise and other nuisance and repair/maintenance and security issues. Local authorities are also acutely aware of the very significant strain that Airbnb-style lets are having on the already-pressured social housing market.

What can be done?

In 2015 the UK Government implemented a 90-day per year per limit for Airbnb style short term rentals. In practice, this is incredibly difficult to enforce – primarily because resource-poor Local Authorities struggle to undertake the surveillance needed to obtain the evidence to support enforcement action. Recent investment by Westminster City Council in a specialist team set up to tackle housing fraud has however yielded some positive results.

Legal action was taken by Westminster Council after it established that one of its tenants had been advertising the property on Airbnb and had over 300 reviews dating back to 2013. Bank statements confirmed that the tenant had been receiving payments from Airbnb for several years. As well as obtaining a possession order and evicting the tenant, Westminster Council was able to rely on the Prevention of Social Housing Fraud Act 2013 (PSHFA) to obtain an Unlawful Profits Order (UPO) requiring the tenant to pay over £100,000 to the Council.

The PSHFA is intended to help clamp down on housing tenancy fraud – in particular the unlawful subletting of social housing. It enables Local Authority landlords to take civil and/or criminal action against their secure tenants; and similarly private residential providers (PRPs) (such as housing associations and arm’s-length management organisations) to take action against their assured tenants [1]. Such action can result in fines, imprisonment and/or the levying of UPOs.

The Mayor of London and representatives from cities and Councils across the UK have asked the Government to introduce tighter measures to more effectively control the short-term letting market, but we understand that the Government has no current plans to pursue any such proposals. In the immediate term, therefore, short-term rentals – and the various legal, practical and social problems to which they give rise – are here to stay.

If you would like any advice or assistance in connection with unlawful Airbnb-style lets, please do not hesitate to contact Karl Anders or any member of Walker Morris’ Housing Management & Litigation Team.

_____________________

[1] albeit this does not extend to shared ownership arrangements

Contacts