Subletting & Airbnb in Leasehold Flats: Rights Guide
A comprehensive guide to subletting leasehold flat properties and Airbnb leasehold arrangements. Understand lease restrictions on short lets block of flats, the process for obtaining freeholder consent subletting, the London 90-day rule, and how managing agents enforce lease covenants. Whether you are asking can I sublet my flat or want to know the risks of listing on a short-term letting platform, this guide covers everything you need to know.
What Does Your Lease Say About Subletting?
The starting point for any leaseholder considering subletting leasehold flat property is always the lease itself. The lease is the legal document that governs your rights and obligations as a leaseholder, and it will contain specific provisions relating to subletting, assignment, and the use of your flat. These provisions are found in the alienation covenant, which controls how you can deal with your property.
Absolute Prohibition
Some leases contain an absolute prohibition on subletting. This means the leaseholder is not permitted to sublet the flat under any circumstances, and the freeholder is under no obligation to grant consent even if asked. An absolute prohibition is relatively rare in modern leases but is still found in some older leases and certain types of development. If your lease contains an absolute prohibition, the only way to sublet lawfully is to apply for a formal variation of the lease, which requires the freeholder's agreement and may involve legal costs.
Consent Required (Qualified Covenant)
The most common arrangement is a qualified covenant against subletting, which provides that the leaseholder may not sublet without the prior written consent of the freeholder. Under the Landlord and Tenant Act 1927, where a lease contains a covenant requiring the landlord's consent, that consent cannot be unreasonably withheld. This means the freeholder must consider any application to sublet on its merits and can only refuse if there are reasonable grounds for doing so. Common reasonable conditions include requiring the subtenant to enter into a deed of covenant, requiring the subletting to be on an assured shorthold tenancy basis, and requiring the leaseholder to remain responsible for lease compliance.
Alienation Covenants and User Clauses
In addition to the alienation covenant, your lease may contain a user clause that restricts how the flat can be used. A typical user clause requires the flat to be used as a single private dwelling and prohibits any use for business purposes. Short-term letting through platforms such as Airbnb may be considered a business use, and even if the alienation covenant permits subletting with consent, the user clause may separately prohibit the type of occupation that short-term letting involves. Both the alienation covenant and the user clause must be considered together when assessing whether subletting or short lets block of flats arrangements are permitted.
If you are unsure what your lease says about subletting, you should obtain a copy from the Land Registry or from your solicitor and seek professional advice before proceeding. For guidance on lease disputes generally, see our leasehold disputes guide.
Subletting With Freeholder Consent
Where a lease requires freeholder consent subletting, the leaseholder must apply for and obtain written consent before any subletting takes place. The process for obtaining consent and the protections available to leaseholders are set out in the Landlord and Tenant Act 1927.
The Application Process
To apply for consent to sublet, the leaseholder should write to the freeholder (or the managing agent acting on the freeholder's behalf) setting out full details of the proposed subletting. This should include the name and contact details of the proposed subtenant, the proposed rent, the term of the subletting, and confirmation that the subtenant will comply with the covenants in the head lease. The freeholder should respond within a reasonable time, and any consent should be given in writing. The freeholder may charge a reasonable administration fee for considering the application and preparing the licence to sublet.
Landlord and Tenant Act 1927
Section 19 of the Landlord and Tenant Act 1927 provides that where a lease contains a covenant against subletting without consent, that consent shall not be unreasonably withheld. This statutory protection means that a freeholder cannot simply refuse consent without good reason. If a freeholder refuses consent or fails to respond to an application, the leaseholder may apply to the court for a declaration that consent has been unreasonably withheld. The burden of proof is on the freeholder to show that refusal is reasonable. The Landlord and Tenant Act 1988 further strengthens this protection by requiring the landlord to give consent within a reasonable time and to provide written reasons for any refusal.
Reasonable Conditions
Even where consent is granted, the freeholder may attach reasonable conditions. Common conditions include requiring the subtenant to sign a deed of covenant agreeing to comply with the terms of the head lease, requiring the subletting to be on an assured shorthold tenancy of not less than six or twelve months, prohibiting further sub-subletting, and requiring the leaseholder to provide a copy of the tenancy agreement. These conditions are designed to protect the interests of the freeholder and the other leaseholders in the building. The leaseholder remains responsible for compliance with the head lease and for the actions of their subtenant.
It is essential that the consent is obtained in writing before the subletting commences. Subletting without obtaining the required consent, even if consent would not have been unreasonably withheld, is a breach of covenant and can expose the leaseholder to enforcement action.
Airbnb and Short-Term Lets in Blocks of Flats
The growth of Airbnb leasehold listings and other short-term letting platforms has created significant challenges for managing agents, freeholders, and other residents in blocks of flats. Short-term lets raise distinct issues that go beyond those associated with traditional subletting, and the legal and practical implications are considerable.
Lease Restrictions on Short-Term Lets
Many leases were drafted before the emergence of platforms like Airbnb and do not specifically mention short-term or holiday lets. However, the existing lease covenants are often broad enough to cover this type of use. A covenant prohibiting subletting without consent will typically apply to short-term lets as well as longer tenancies. A user clause requiring the flat to be used as a single private dwelling may be breached by transient occupation. A covenant against causing nuisance and annoyance to other residents may be engaged by the disruption that short-term guests can cause. Courts have increasingly taken the view that short lets block of flats arrangements fall within existing lease restrictions, even where the lease does not specifically reference holiday or short-term letting.
The 90-Day Rule in London
In Greater London, the Deregulation Act 2015 introduced a 90-day rule for short-term lets. A residential property can be used for short-term lets for up to 90 nights per calendar year without requiring planning permission for a change of use. If the property is let for more than 90 nights, this constitutes a material change of use and planning permission is required. However, the 90-day rule only addresses the planning position. It does not override any lease restrictions, and a leaseholder who is within the 90-day limit may still be in breach of their lease. Outside London, there is no equivalent statutory limit, but short-term letting may still require planning permission depending on the local authority's interpretation.
Insurance Implications
Short-term lets can have a material impact on the block insurance policy. Most buildings insurance policies are underwritten on the basis that flats are occupied by leaseholders or long-term tenants. The introduction of short-term guests changes the risk profile of the building, as transient occupiers are statistically more likely to cause accidental damage and less likely to be familiar with fire safety procedures and building security arrangements. Insurers may require notification of any short-term letting activity, and failure to disclose this could invalidate the policy or result in a claim being refused, affecting every leaseholder in the building.
Leaseholders considering listing their flat on Airbnb or a similar platform should review their lease, consult with their managing agent, and check the buildings insurance position before proceeding. The consequences of non-compliance can be severe.
Impact of Short Lets on Other Residents
One of the primary concerns with Airbnb leasehold arrangements and other short lets block of flats is the impact on other residents in the building. The issues are practical, financial, and often deeply disruptive to the community within a block.
Security Concerns
Short-term guests are given access to the building, including communal entrance doors, corridors, and sometimes parking areas, without the same vetting that would apply to a long-term tenant. The frequent turnover of occupants means that residents do not know who is in the building, key codes or fob access may be shared with strangers, and the security of the building is compromised. In blocks with concierge or entry phone systems, short-term letting can undermine the effectiveness of these security measures.
Noise and Antisocial Behaviour
Short-term guests, particularly those using a flat for a holiday or weekend stay, may have different expectations about noise levels and behaviour compared to permanent residents. Complaints about late-night noise, parties, and disturbance in communal areas are common in buildings where short-term letting takes place. This can constitute a breach of the lease covenant against causing nuisance and annoyance and can significantly reduce the quality of life for other residents in the block.
Communal Area Wear and Tear
The increased footfall associated with short-term lets accelerates wear and tear on communal areas, including hallways, lifts, stairwells, and entrance lobbies. Guests arriving with luggage, unfamiliar with the building layout, and less careful with communal property all contribute to higher maintenance costs. This additional wear is borne by all leaseholders through the service charge, meaning that compliant leaseholders effectively subsidise the short-term letting activity of others.
Increased Cleaning and Maintenance Costs
Buildings with active short-term letting often require more frequent cleaning of communal areas, additional rubbish collection, and increased maintenance of lifts and entry systems. These costs are passed on to all leaseholders through the service charge. Where short-term letting is concentrated in a small number of flats, it can be particularly unfair on leaseholders who are paying an equal share of increased costs caused by activity they have no control over and have not consented to.
Managing Agent Responsibilities
Managing agents play a central role in monitoring and enforcing lease covenants relating to subletting and short-term lets. At Block, we take a proactive approach to ensuring that subletting leasehold flat arrangements comply with the lease and do not adversely affect other residents.
- Monitoring the building for signs of unauthorised subletting or short-term letting activity
- Responding promptly to complaints from residents about suspected Airbnb or short-term let guests
- Reviewing lease terms to confirm whether subletting is permitted and on what conditions
- Communicating with the freeholder to obtain instructions on enforcement action
- Writing to leaseholders who are in breach of subletting restrictions to demand that the breach is remedied
- Maintaining accurate records of consents granted, licences to sublet, and deeds of covenant
- Advising directors and freeholders on the options available for enforcement, including Section 146 notices
- Liaising with insurers to ensure that the buildings insurance policy reflects the actual use of flats in the building
Effective enforcement requires a clear understanding of the lease terms, good communication with leaseholders and freeholders, and a willingness to escalate matters where necessary. Managing agents who fail to act on known breaches may face criticism from compliant leaseholders and could expose the freeholder to claims that the covenant has been waived through inaction.
Breach of Covenant and Enforcement
Subletting without the required consent or in breach of an absolute prohibition is a breach of covenant under the lease. The freeholder has a range of enforcement options available, and the consequences for the leaseholder can be severe. Understanding the enforcement process is important for both leaseholders who may be in breach and those who are affected by unauthorised subletting in their building.
Informal Resolution
In many cases, the first step is an informal approach. The managing agent will write to the leaseholder identifying the breach and requesting that it is remedied. This may involve requiring the leaseholder to remove the Airbnb listing, terminate the subletting, and apply for retrospective consent if appropriate. Many breaches can be resolved at this stage without the need for formal legal proceedings, particularly where the leaseholder was unaware of the restriction or is willing to comply.
Section 146 Notices
Where a breach continues or the leaseholder refuses to engage, the freeholder may serve a Section 146 notice under the Law of Property Act 1925. This is a formal notice that specifies the breach, requires the leaseholder to remedy it, and requires the leaseholder to pay compensation if appropriate. The Section 146 notice is a prerequisite to forfeiture proceedings and must comply with strict procedural requirements. For more information about Section 146 notices and the forfeiture process, see our leasehold disputes guide.
Forfeiture Risk
Forfeiture is the most serious consequence of a breach of covenant. It allows the freeholder to bring the lease to an end, meaning the leaseholder loses their property and their financial investment. Courts will not order forfeiture lightly, and the leaseholder has the right to apply for relief from forfeiture under Section 146(2) of the Law of Property Act 1925. However, the threat of forfeiture is a powerful enforcement tool, and leaseholders should take any Section 146 notice extremely seriously. Persistent or deliberate breaches of subletting covenants, particularly where the leaseholder has been warned and continues to operate an Airbnb or short-term let, are the type of breach where forfeiture is most likely to be pursued.
Leaseholders who receive a letter about a breach of subletting covenants should seek legal advice immediately and take steps to remedy the breach. Early engagement with the managing agent and the freeholder is the best way to avoid the escalation of enforcement action.
Frequently Asked Questions About Subletting and Airbnb in Leasehold Flats
Can I sublet my leasehold flat?
Whether you can sublet your leasehold flat depends entirely on the terms of your lease. Some leases contain an absolute prohibition on subletting, meaning you cannot sublet under any circumstances without a formal variation of the lease. Other leases permit subletting with the prior written consent of the freeholder, which is the most common arrangement. Under the Landlord and Tenant Act 1927, where a lease requires the landlord's consent to sublet, that consent cannot be unreasonably withheld. However, the freeholder may attach reasonable conditions to the consent, such as requiring the subtenant to comply with the lease covenants or requiring a deed of covenant. Before subletting, you should obtain a copy of your lease, review the alienation clause carefully, and apply to the freeholder for formal consent. Subletting without the required consent constitutes a breach of covenant and can have serious legal consequences, including forfeiture of the lease.
Do I need freeholder consent to list on Airbnb?
In most cases, yes. The majority of leasehold flats contain covenants that restrict or prohibit subletting, and listing your property on Airbnb constitutes a form of short-term letting that will typically fall within these restrictions. Even if your lease permits subletting with consent, using the flat for short-term holiday lets is often treated differently from a standard assured shorthold tenancy. Many leases contain specific clauses prohibiting the use of the flat for business purposes or for short-term lettings, and an Airbnb listing may breach one or both of these covenants. You should review your lease carefully, paying particular attention to any alienation clause, user clause, or covenant against causing nuisance and annoyance to other residents. If your lease requires consent, you must obtain written permission from the freeholder before listing on any short-term letting platform.
What is the 90-day rule for short-term lets in London?
The 90-day rule applies specifically to properties in Greater London under the Deregulation Act 2015. It provides that a residential property in London can be used for short-term lets (defined as lettings of less than 90 consecutive nights) for a maximum of 90 nights per calendar year without requiring planning permission for a change of use. If the property is let for more than 90 nights in a calendar year, this constitutes a material change of use from residential (C3 use class) to temporary sleeping accommodation, which requires planning permission from the local authority. Platforms such as Airbnb have implemented automatic limits for London listings to comply with this rule. However, the 90-day rule only addresses the planning position. It does not override any lease restrictions on subletting or short-term lets. Even if you are within the 90-day limit, you may still be in breach of your lease if subletting or short-term letting is prohibited or requires consent.
Can a managing agent stop me from subletting?
A managing agent does not have an independent power to stop you from subletting. The right to control subletting belongs to the freeholder under the terms of the lease. However, the managing agent acts on behalf of the freeholder and is responsible for monitoring compliance with lease covenants, including restrictions on subletting. If the managing agent becomes aware that a leaseholder is subletting without consent or in breach of the lease terms, they will typically report this to the freeholder and may be instructed to take enforcement action. This can include writing to the leaseholder to demand that the subletting cease, notifying the leaseholder of the breach of covenant, and if necessary, instructing solicitors to serve a Section 146 notice under the Law of Property Act 1925 as a precursor to forfeiture proceedings. In practice, the managing agent is the first point of contact for enforcement and plays a central role in ensuring that subletting restrictions are observed.
What happens if I sublet in breach of my lease?
Subletting in breach of your lease is a breach of covenant that can have serious legal consequences. The freeholder is entitled to take enforcement action, which typically begins with a formal letter demanding that the breach be remedied. If the breach continues, the freeholder may serve a Section 146 notice under the Law of Property Act 1925, which is a formal notice requiring the leaseholder to remedy the breach within a specified period. If the breach is not remedied, the freeholder may apply to the court for forfeiture of the lease, which means you could lose your home and your investment in the property. Even if forfeiture is not pursued, a breach of covenant can result in an injunction preventing further subletting, an award of damages, and legal costs being charged to the leaseholder. A history of covenant breaches can also affect the saleability of your flat, as prospective buyers and their solicitors will review the compliance history of the property.
Does subletting affect my buildings insurance?
Yes, subletting can have significant implications for the buildings insurance policy covering your block of flats. Most buildings insurance policies are arranged on the basis that the flats are occupied by leaseholders or long-term tenants. Short-term lets, particularly those arranged through platforms like Airbnb, change the risk profile of the building because transient occupiers are less familiar with the property, less likely to take care of communal areas, and may present different security risks. Insurers may require notification of any subletting or short-term letting in the building, and failure to disclose this information could invalidate the policy or result in a claim being refused. If the insurer becomes aware of short-term letting that has not been disclosed, they may impose additional conditions, increase the premium, or withdraw cover altogether. Leaseholders who sublet should ensure that their managing agent and the freeholder are aware so that the buildings insurance can be reviewed. For more information, see our block insurance guide.
Need Advice on Subletting or Airbnb in Your Block?
Whether you are a leaseholder wondering can I sublet my flat, a director concerned about unauthorised Airbnb leasehold activity in your building, or a freeholder seeking to enforce subletting leasehold flat restrictions, Block is here to help. Our experienced team advises on lease compliance, enforcement action, and the practical management of buildings affected by short-term letting. We also work closely with insurers to ensure your block insurance remains valid.