Sorry to barge in with questions on my first post.
We have an apartment in a city centre and have been doing holiday lets since September, all was going well until the management company asked us to stop saying we can't do short lets or run a business from our own premises, can they stop us.... Anyone have any experience with this please?
Apartment holiday lets
No experience, but it all depends on your lease I believe. Go and examine that with a fine toothcomb as the use of a flat (or not) for a holiday let is frequently specified within a lease.
I think there are some other threads on here about it. If I find any I'll pop them here.
viewtopic.php?t=18276
viewtopic.php?t=20708
The second one looks of use.
I think there are some other threads on here about it. If I find any I'll pop them here.
viewtopic.php?t=18276
viewtopic.php?t=20708
The second one looks of use.
I pessimistically think that I might be the bearer of bad news for you. I am assuming that your apartment is in the UK, because what I am saying is relevant just to the UK.
The lease for your apartment may say "no subletting without consent" or even "no subletting at all" - well, words to that effect.
Also, you may have some direct agreement with your management company (who may or may not also be your landlords by another name). If so, you would need to check the paperwork to see what (if anything) it says on the subject of subletting for holiday lets or otherwise.
In my experience, these management companies are rather watchful and 'have their eye on the ball', but I once successfully negotiated with one. It was to allow subletting on a monthly tenancy - holiday lets might be a different matter.
Did you buy using the services of a solicitor? If so, did you tell him/her what your purpose was in buying the property?
The lease for your apartment may say "no subletting without consent" or even "no subletting at all" - well, words to that effect.
Also, you may have some direct agreement with your management company (who may or may not also be your landlords by another name). If so, you would need to check the paperwork to see what (if anything) it says on the subject of subletting for holiday lets or otherwise.
In my experience, these management companies are rather watchful and 'have their eye on the ball', but I once successfully negotiated with one. It was to allow subletting on a monthly tenancy - holiday lets might be a different matter.
Did you buy using the services of a solicitor? If so, did you tell him/her what your purpose was in buying the property?
In the UK it is more the norm than not to have a leasehold that prevents the apartment being used for a business. This also includes sub-letting and holiday letting. In Bournemouth 99% of all apartment block leases prevent the apartments being used for business use. Some that do also except holiday lets. Hence the reason that there are so few apartment block holiday lets in Bournemouth - many are illegal. When we bought our apartments we had to buy in blocks that allowed business use; even so we had them changed to specifically name usage for holiday lets.
Even running an eBay business from home could be in breech of the leasehold agreement.
Even running an eBay business from home could be in breech of the leasehold agreement.
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The lease will not ordinarily preclude you letting the property on a long term basis under an assured shorthold (although some do) so it's probably the 'business usage' clause that's being invoked. The managing agents are usually not the freeholder, they are just appointed by the freeholder to administer the building and grounds, so you could approach the freeholder for consent.
Many thanks for all the comments.
The structure of our block is that all apt owners are Freeholders and own an equal shared in the management committee. It is the Directors of the committee that have issued a notice to cease through the appointed Management company. No vote or consultation with other owners has taken place.
The agreement does not specify that holiday lets are not permitted it is just prevents 'running a business' clause. To our knowledge we are the only owners in the block of 34 offering holiday let which is conducted through two of the major on-line booking sites with all guests are fully vetted all paying by credit/debit card and giving full home addresses to authorise payment as well as providing breakage deposit.
My understanding from the comments given is that to stop the practice ALL Freeholders would have to agree to and change in the lease or enforcement to stop us trading and as we would always have a vote this would not be attainable?
One other important consideration for the whole community is that recent changes in the budget affecting taxation of landlords on conventional but-to-let properties (precluding holiday lets) make holiday lets very attractive in the future
Kindest
The structure of our block is that all apt owners are Freeholders and own an equal shared in the management committee. It is the Directors of the committee that have issued a notice to cease through the appointed Management company. No vote or consultation with other owners has taken place.
The agreement does not specify that holiday lets are not permitted it is just prevents 'running a business' clause. To our knowledge we are the only owners in the block of 34 offering holiday let which is conducted through two of the major on-line booking sites with all guests are fully vetted all paying by credit/debit card and giving full home addresses to authorise payment as well as providing breakage deposit.
My understanding from the comments given is that to stop the practice ALL Freeholders would have to agree to and change in the lease or enforcement to stop us trading and as we would always have a vote this would not be attainable?
One other important consideration for the whole community is that recent changes in the budget affecting taxation of landlords on conventional but-to-let properties (precluding holiday lets) make holiday lets very attractive in the future
Kindest
I had a similar problem about ten years ago with a property I owned which was freehold. Within that freehold it stated no business was to be run from the property.
Using a litigation solicitor, I checked and found holiday letting was not considered as running a business from the premises as the holiday makers would only be utilising the premises in the way any resident would: sleeping, eating, going in and out.
So, I went ahead and bought the property and was open with the three sets of neighbours in the courtyard. But, it wasn't long before one set of neighbours decided to become awkward and I decided to sell on quickly.
I wasn't flouting any terms but the neighbours were making things difficult, on one occasion leaving a nasty note for the guests and being generally awkward and attempting to spoil the guests' stay. As I was off site, the worry this caused me was awful.
So, my thoughts are, it might be worth gauging the neighbours' feelings as this is very important to prevent things backfiring.
Some people have a bad feeling about having strangers as neighbours, who change weekly or every few days.
Good luck and keep us posted. For what it us worth, I know exactly how you feel, as you have set it all up and it was working well and now you have that element of doubt. Utterly devastating.
Using a litigation solicitor, I checked and found holiday letting was not considered as running a business from the premises as the holiday makers would only be utilising the premises in the way any resident would: sleeping, eating, going in and out.
So, I went ahead and bought the property and was open with the three sets of neighbours in the courtyard. But, it wasn't long before one set of neighbours decided to become awkward and I decided to sell on quickly.
I wasn't flouting any terms but the neighbours were making things difficult, on one occasion leaving a nasty note for the guests and being generally awkward and attempting to spoil the guests' stay. As I was off site, the worry this caused me was awful.
So, my thoughts are, it might be worth gauging the neighbours' feelings as this is very important to prevent things backfiring.
Some people have a bad feeling about having strangers as neighbours, who change weekly or every few days.
Good luck and keep us posted. For what it us worth, I know exactly how you feel, as you have set it all up and it was working well and now you have that element of doubt. Utterly devastating.
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Sense of humour essential!Unfortunately if you are in contravention of the terms of your lease then you are in contravention of the terms of your lease and it doesn't need to be put to the vote. HOWEVER are you in contravention at all? As has been mentioned, a qualifying furnished holiday let is not a 'business' per se. If I were you I would be taking legal advice.Belgravia wrote:
My understanding from the comments given is that to stop the practice ALL Freeholders would have to agree to and change in the lease or enforcement to stop us trading and as we would always have a vote this would not be attainable?
Just to put a thought in as another angle. When letting out, HMRC regards it as income from property, not as self employment. That ties in with the thought that it's not a business. Holidaymakers don't utilise the building in a different way to a householder as has been said. They come and go, eat and sleep just like normal householders. The difference is they are not familiar with the building so more issues can arise as a result.
I'd rather have a holiday let than a short term let next to me any day of the week. If a "tenant" is annoying, noisy or anything else, you know they will be gone in a few days! Short term tenants, as we know can turn out to be nightmare tenants.
I'd rather have a holiday let than a short term let next to me any day of the week. If a "tenant" is annoying, noisy or anything else, you know they will be gone in a few days! Short term tenants, as we know can turn out to be nightmare tenants.
To my mind that's your best course, because you need advice which is specific to your particular situation. Absolutely agree with those who say "make sure you have got the neighbours on board". An unpleasant neighbour could wreck a guest's holiday.Belgravia wrote:Interesting... if 'holiday let' isn't considered a business then we are not breaking any lease agreement, but we are taking legal advice and will let you know how we get on.
Thanks again.
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brightmike
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We tried to find a flat in Brighton for a long time that would allow holiday lettings. Most have a lease that preclude it. A few allow it. We always asked the estate agent who said "don't worry it's fine". When we asked to see a copy of the lease before making an offer they always went quiet.
From what I remember most leases allow letting (i.e. as an AST) but stipulate a minimum period which prevents holiday lets.
I would ask your solicitor to check your lease then you will know for sure.
From what I remember most leases allow letting (i.e. as an AST) but stipulate a minimum period which prevents holiday lets.
I would ask your solicitor to check your lease then you will know for sure.
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It's the lease that determines the terms of your occupancy. Being a freeholder has no bearing on your status as a leaseholder. To change any lease terms all freeholders must agree to the new terms, not just a majority. Any changes must apply to all leaseholders and not just one. The directors of the freeholders share company are appointed by the freeholders to ensure that the leases are complied with; the directors will normally do this through the freeholder appointed property management company. Directors will take advice from the property management company too as they are more likely to be aware of affecting legislation.
If all the freeholders agree; and this must be done at a shareholders meeting, that a holiday let is okay and does not break the "no business" lease clause then that will suffice for the period of your leasehold tenancy, but not necessarily for the whole period of the lease that you currently have - you couldn't necessarily sell the property as a going concern holiday let.
Definitions of a business described by HMRC & Council Tax/Business Rating bodies don't apply to leasehold terms - these lease definitions are well tried and tested in law and apply to all of England and therefore all regions.
A specialist property solicitor will be able to tell you quickly if the definition in your lease is a standard one and precludes holiday lets.
In my experience a no business clause will preclude holiday lets too, unless, it states that holiday lets are accepted definitively. I have two properties, both of which exclude use as a business premises, including running a business from there (i.e. online), however, both except that the properties can be used for sub-letting including holiday lets.
If all the freeholders agree; and this must be done at a shareholders meeting, that a holiday let is okay and does not break the "no business" lease clause then that will suffice for the period of your leasehold tenancy, but not necessarily for the whole period of the lease that you currently have - you couldn't necessarily sell the property as a going concern holiday let.
Definitions of a business described by HMRC & Council Tax/Business Rating bodies don't apply to leasehold terms - these lease definitions are well tried and tested in law and apply to all of England and therefore all regions.
A specialist property solicitor will be able to tell you quickly if the definition in your lease is a standard one and precludes holiday lets.
In my experience a no business clause will preclude holiday lets too, unless, it states that holiday lets are accepted definitively. I have two properties, both of which exclude use as a business premises, including running a business from there (i.e. online), however, both except that the properties can be used for sub-letting including holiday lets.
"Write something, even if it's just a suicide note"
"There is no human problem which could not be solved if people would simply do as I advise"
"As for my amnesia, I've had it as long as I can remember"
Real name: Steve
Gender: Male
"There is no human problem which could not be solved if people would simply do as I advise"
"As for my amnesia, I've had it as long as I can remember"
Real name: Steve
Gender: Male