Andrew Francis tells some cautionary tales of restrictive covenants used for holiday & other short-term lettings
- This article examines problems arising from restrictive covenants on short-term lets.
- It examines the case law in relation to breach, which show the importance of considering the covenants affecting the title, either at the pre-contract stage, or post purchase where a change of use is contemplated.
Let us start with three examples.
No 1: Your client has instructed you to act on the purchase of the freehold title to a house by the sea. This is subject to a restrictive covenant providing that the property is ‘only to be used as a private dwelling house’. There is also a ‘no nuisance or annoyance’ covenant. Your client has told you that it intends to use the house for short-term/Airbnb letting during the holiday season.
No 2: Your client has instructed you to act on the purchase of a leasehold residential flat in central London. This is subject to tenant’s covenants providing that the property is ‘only to be used as a private residence’ and against
