Breached lease renting on Air B n B

cchurchill1986

Hi all.

I am currently drowning in debt. My service charge for my apartment is £2500 a year. A fire safety assessment was carried out and it states that the insulation in the building is flammable, so I have to pay ANOTHER £2500 a year for the new insurance. I have just received ANOTHER bill for ground rent for almost £700...... I am still waiting for the bill to replace the insulation which could be £10,000+ per apartment.

I decided to put my flat on Air BnB a few months ago to try and get some money to pay these extortionate bills. I received this letter from the management agency:

____________________________

Sent 29th November

I write to advise you that Keppie Massie, as managing agents for the freeholder, Walace Estates Ltd, have been made aware that you are in breach of the following covenant in your lease:

Clause 3.20: which states: Not to use the apartment or permit it to be used for any purpose whatsoever other than a single private dwelling for residential purposes only…'
In that your are permitting short term and weekend lets at your property groups of Individuals.

We have evidence that the apartment has been let via Air BnB on the following dates:

(List of dates spanning 4 months)

As Freeholder, Wallace Estates has a responsibility to enforce covenants in the lease in the interests of all leaseholders.. To do so, they employ Keppie Massie, as their managing agents, to enforce those covenants on heir behalf. As such, we require that your remedy this breach forthwith.

In the event that you do not remedy this breach fortwith or permit a further breach of continuation of this breach, Keppie Massie on behalf of Wallace Estates will take legal action to prevent or cease this breach and will seek to recover it’s full costs in doing so including legal costs.

You should be aware that breaches of the covenants in your lease can lead to forfeiture of your lease. Moreover, we are sure that you would not wish to cause unnecessary inconvenience or distress to your fellow leaseholders.

We look forward to hearing from you within 7 days of the steps you have taken to remedy this breach. If we do not hear from you within 7 days , we shall refer the matter to our clients solicitors.
_______________________

It seems they have been monitoring me for some time, but this is the first time I have received any correspondence from them regarding this issue.
I’m not sure what evidence they could have….. Perhaps the concierges have been feeding them who is coming and going from my apartment?

I understand that I have now been caught and I intend to stop. But I want to honour the bookings I have for this month, as that will at least get some of the big bills sorted.
How should I proceed? Should I ignore this letter and just carry on but stop on the 1st of Jan?

What will happen? I don't want to forfeit the lease and for them to take my apartment from me!!! What is the likelihood of that happening if I just carry on for the remainder of this month?

I am on the edge to be honest.... It is one thing. after another.....

AdrianC

cchurchill1986 wrote: »

I decided to put my flat on Air BnB a few months ago to try and get some money to pay these extortionate bills.

"We have evidence that the apartment has been let via Air BnB on the following dates:"

I’m not sure what evidence they could have….. Perhaps the concierges have been feeding them who is coming and going from my apartment?

Or, perhaps, they monitor what's available in the postcode on AirBnB...?

I understand that I have now been caught and I intend to stop. But I want to honour the bookings I have for this month, as that will at least get some of the big bills sorted.
How should I proceed? Should I ignore this letter and just carry on but stop on the 1st of Jan?

You've got 7 days to respond. That's the 10th Dec. Write to them, apologise sincerely, and say that you've already withdrawn marketing the property. (You have, right?)

Not much they're going to do about that, apart from check the AirBnB listings, until the NY.

If you can't afford to live there - and that includes paying the ground rent and service charges - then you're going to have to sell. Of course, there's the vicious circle that that's going to be hard until the cladding issues are resolved... And if you're "drowning in debt", I presume that remortgaging is not an issue.

Perhaps it's time to head over to the debt management board?

cchurchill1986

Yes the listing has been removed from Air B n B and I am accepting no new bookings.

The flat has been on the market for months, nobody will touch it because of the cladding issue.....

So I have an apartment which is a complete money pit which I am unable to sell....

Arthritic_Toe

How about responding within 7 days saying something like "I am taking steps to cease the operation. The property has been removed from Air B&B and there will be no further breaches after the current bookings are honoured. All activity will cease by 1st Jan"

I'm sure theyd be happy with that.

princeofpounds

Hi there. Don't panic. Firstly, you don't have to reply for seven days (actually, you don't technically need to reply at all, but that route might not be a great idea).

When you do reply, do not admit directly to whatever you have been doing (at least initially). It will just be evidence for them.

The threat of breaking your lease is strong (ultimately, forfeiture is theoretically possible) but it's a very long road to get there. It's not going to happen, unless you are insanely stubborn.

The process is that the freeholder has to take you to tribunal to establish if there actually is a breach or not (this is the initial place where actual evidence will be important). Then they can issue a section 146 notice. Only then can they pursue remedy in court. That remedy is very unlikely to be forfeiture in the first instance. All this takes months and months.

I'm thinking a bit further about what timings may be wisest to reply and how, but if your plan is to stop in 4 weeks at the latest, I don't think there are going to be any lasting problems.

Of course you should be stopping, as it is a condition of the lease.

Finally - you are letting out the whole property? Not just a room? Just clarifying; from the way you talk it sounds like the former.

princeofpounds

Yes I think a simple 'Thank for you communication, I can confirm there will not be any Airbnb or similar bookings from January 2020' is probably enough.

cchurchill1986

Hey.

Yes I am renting the whole property.

I knew I would be breaching the lease, but I am just desperate, hence why I made the decision. There are other properties in my building doing the same thing. They have been doing it for over a year so I thought if they are doing it the management much be turning a blind eye to it.... But apparently not. I kind of feel like I have been singled out for some reason....

I didn't realise it would be a drawn out process like that. In my naivet! I thought it wold be more like 'You have breached your lease, we warned you with a later, it has been 2 weeks and you are still letting out your apartment, so now we are taking it form you'

So I should just reply with something like

"If my apartment was on Air BnB, it is not on there now. I hope this remedies the situation."

G_M

I agree that when you reply (and you don't have but would be wise to) you should be very cautious in your wording.


Avoid making a written confession!
Make clear there are no listings on airbnb, and invite them to check
(but without mentioning any historic listings or saying 'any longer')
Thank them for their help in highlighting the lease clause in question (without saying you've breached it!) and agree that of course you don't wish to cause unnecessary inconvenience or distress to your fellow leaseholders and have every intention of complying with the terms of your lease and other contractual obligations. (which is suitably ambiguous but includes you current bookings!)


How many bookings do you actually have?

AdrianC

cchurchill1986 wrote: »

Yes I am renting the whole property.

So you don't live there?

Would it be a solution to sell your other property and move in to the flat?
Or rent the flat via AST? (This would not breach the quoted term...)

Clause 3.20: which states: Not to use the apartment or permit it to be used for any purpose whatsoever other than a single private dwelling for residential purposes only…'

cchurchill1986

Yes I'll be very careful about how I word it. Your suggestions sound good.

This month is pretty much full with bookings. There are 12 in total.

cchurchill1986

My current situation is that I own this property which I am renting on Air BnB.
I am sharing a flat with a friend whilst my flat is on Air BnB. I only own 1 property.

I could rent my property out normally and get around £850 a month for it, but I of course have to pay my friend £500 a month rent..... So I won't be making a whole lot of money from my flat to cover these huge bills I have.

What is AST? Is that just normal renting to a tenant?