What's creeping about in the small print?

Our lawyer, Fiona McNulty, explains the covenants that some leases may have restricting holiday lettings
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© Merrily Harpur (harper.org)
Question: I've just inherited a flat from my godfather. I'd like to have a go at renting it out for holiday lets.

I spoke to a specialist holiday letting agency about doing this, and their first question was to ask whether I am allowed to use the flat for holiday lets. Why shouldn't I be able to do so, provided I declare the income to the tax people? I have never owned a flat before.

Answer: I expect that the holiday letting agency is trying to find out if the terms of your lease allows holiday lets as it will not want you to be in breach of the covenants in your lease.

You need to look at your lease carefully. It will be drafted in sections and there will be different clauses and probably schedules as well. There should also be a list of covenants and/or regulations which you, as the lessee, are bound to observe.

Read these covenants, restrictions and any regulations very carefully. In residential leases there are often covenants restricting the use of the flat to that of a private dwelling and prohibiting any business or trade being carried out in the flat. The lease could say that the flat must be occupied by a single family only.

If business use is not allowed then you are likely to be in breach of covenant if you use the flat for holiday lets. Short-term multiple lets for profit tend to move that sort of letting into the realms of a business.

Having read the lease, if you are still unsure of the situation simply ask the freeholder for written consent to use the flat for holiday lets.

What's your problem?

If you have a question for Fiona McNulty, email legalsolutions@standard.co.uk. We regret that questions cannot be answered individually.

Fiona is a partner in the residential real estate team at Thring LLP www.thrings.com.

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