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Sub-letting a leasehold flat

I'm considering buying a (999yr) leasehold flat in England which has a clause saying that it may not be rented out for financial gain (or some-such wording). However my plan is to potentially offer it via Airbnb etc for occasional short holiday lets here and there. I'm told that although the lease forbids it, many other owners in the block do it, and that the management co knows but turns a blind eye.

Other than the management suddenly clamping down and enforcing the ban, what are the potential legal pitfalls?

There is a service charge on the building which includes buildings insurance. Would it for instance invalidate the insurance? And if so is there a way round that?

Gordonbennet
I'm not a lawyer, so this is just my opinion. Don't go acting on legal advice you get from a stranger on the internet!

Comments

  • Comms69
    Comms69 Posts: 14,229 Forumite
    10,000 Posts Third Anniversary Name Dropper
    Well they could forfeit your lease.... Dunno about you, but I tend to not gamble with £250+k
  • eddddy
    eddddy Posts: 17,538 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    There is a service charge on the building which includes buildings insurance. Would it for instance invalidate the insurance? And if so is there a way round that?

    You'd need to get a copy of the freeholder's buildings insurance policy and see if it covers what you want to do.

    As you can imagine, it would not be good for you, if one of your airbnb clients leaves a chip pan on and burns down the building - and the insurers refuse to pay, because the policy doesn't allow short-term letting.

    You would probably be personally liable to cover the cost of the damage.
  • AlexMac
    AlexMac Posts: 3,063 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    edited 2 March 2019 pm31 3:54PM
    I've just renewed the freeholder insurance on our small 6-unit conversion block (acting for the other leaseholders in this "shared freehold" company).

    I had to confirm that all units were either owner occupied or sub-let on proper ASTs of at least 6 months, i.e, not B&B or AirBeenbies ... which iis also what also says in the leases. Identical clauses in the last Insurance Company's policies and the same lease conditions in the previous few flats I've owned.

    So up to you if you want to copy others in the block and risk it. I dunno how likely it is that the freeholder would actually "determine " (end) your lease in practice for breaching conditions, but as a leaseholder, I'd be hacked off if I was living in a block which was also being used as a transient hotel...

    I'd be even more hacked off if there was a fire and subsequent refusal of full repairs or reinstatement costs by the insurer. But maybe your prospective neighbours are more tolerant if they are all on the game?
  • Slithery
    Slithery Posts: 6,046 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Photogenic
    edited 2 March 2019 pm31 8:20PM
    AlexMac wrote:
    I'd be even more hacked off if there was a fire and subsequent refusal of full repairs or reinstatement costs by the insurer. But maybe your prospective neighbours are more tolerant if they are all on the game?

    Last edited by AlexMac; Today at 3:54 PM. Reason: I in no way mean to imply that your AirB&B clients will be "on the game"... but, now there's an idea?
    Brilliant
    :rotfl::rotfl::rotfl:
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