Quick Answers
Is short-term letting automatically a breach of lease?
In most cases yes, but it depends on the specific lease wording. Most long residential leases include a covenant to use the flat as a private residential dwelling only. A succession of paying holiday guests does not constitute private residential occupation. Where the lease also has a subletting restriction, that will almost certainly be breached by a platform let of any duration.
Does it affect the block's insurance?
Yes, potentially. Standard residential buildings insurance is not written to cover commercial short-term holiday letting. If a claim arises from a flat that has been regularly let on Airbnb and the insurer was not notified, the insurer may decline the claim or seek to void the policy. RTM directors who know short-term letting is happening should notify the insurer immediately.
What can the RTM company actually do?
Where the lease is being breached, the RTM company can serve a formal breach notice requiring the leaseholder to stop. If they do not comply, a Tribunal application to confirm the breach is the next step, followed by forfeiture proceedings if the breach continues. In practice, a well-drafted letter from the managing agent citing the insurance consequences resolves most cases before any formal process is needed.
The short answer: short-term letting through platforms like Airbnb almost always breaches the user covenant in a long residential lease. It may also breach a subletting restriction, void or complicate the block's buildings insurance, and in London exceed the 90-night annual planning limit. RTM directors are not powerless: the lease gives them enforcement tools that work when used correctly and promptly.
The common mistake: RTM directors who receive a complaint about Airbnb activity and respond informally, asking the leaseholder to be more considerate, without reading the lease or notifying the insurer. The informal response signals that the RTM company either does not know about the breach or is not prepared to act on it. Both send the wrong message and allow the activity to continue.
Key Takeaways
The user covenant is the primary enforcement tool
Most long residential leases require the leaseholder to use and occupy the flat as a private residential dwelling. Short-term holiday letting involves a series of guests using the flat commercially, not a single household occupying it as a home. This is a clear breach of the user covenant in most standard lease forms, regardless of whether the lease also has an explicit subletting restriction.
The insurance risk is the most immediately serious consequence
A block buildings insurance policy written on a residential basis may not cover damage or liability claims arising from commercial short-term letting. If the flat causes a fire or flood while occupied by holiday guests and the insurer finds that undisclosed short-term letting was occurring, the consequences can extend beyond that flat's claim to the policy as a whole. This is the risk that typically gets a leaseholder's attention fastest when raised formally.
The 90-night planning rule applies across all London boroughs
The Deregulation Act 2015 allows short-term residential lettings in London of up to 90 nights per calendar year without planning permission. Beyond that limit, the use becomes a material change of use to a commercial short-let property, requiring planning consent. Most leaseholders letting on Airbnb casually stay below the threshold; those operating effectively as a short-let business frequently exceed it. This is a matter for the local planning authority, but it is relevant context for the RTM company when deciding how seriously to treat the breach.
Forfeiture is available but disproportionate as a first response
A continuing breach of a user covenant can ground forfeiture proceedings in principle. But the courts and Tribunal treat forfeiture as a remedy of last resort for residential leases, and will not countenance it where the leaseholder has not been given a clear opportunity to remedy the breach. RTM directors who threaten forfeiture as an opening position rarely achieve faster compliance and may create a leaseholder who digs in legally rather than simply stopping the activity.
Evidence is everything if the matter goes to Tribunal
If the leaseholder disputes the breach, the RTM company will need to demonstrate at the Tribunal that short-term letting was actually occurring and that it constitutes a breach of the specific lease covenant. Screenshots of the listing, booking history where obtainable, complaint records from other leaseholders, and dates of observed guest turnover all constitute evidence. An assertion that "everyone knows they're doing Airbnb" is not sufficient for Tribunal purposes.
Managing agents who do nothing are exposing the RTM company
Where a managing agent is aware that a flat is being regularly let on short-term platforms and takes no action, the RTM company faces liability from multiple directions: from other leaseholders for failing to enforce the lease, from the insurer for failing to notify a change in use, and potentially from the planning authority where a breach has been flagged. An agent who says "it's not our problem" in response to a short-let complaint is not doing their job.
Why This Is an RTM Director Problem
RTM directors sometimes treat short-term letting as a neighbour dispute between leaseholders rather than a management problem they own. It is both, but the management dimension is primary.
The RTM company holds the obligation to enforce the leasehold covenants in the block. When a leaseholder breaches a covenant, other leaseholders can expect the RTM company to act. Where the RTM company is aware of a breach and takes no steps to enforce it, the courts have found that the company can lose the right to enforce that covenant against that leaseholder in the future, on the basis of waiver or acquiescence. Taking no action is not neutral. It has legal consequences.
The insurance dimension makes this more urgent. A managing agent who is told by a leaseholder that the flat above theirs has a different group of people staying every weekend, and who files that information without passing it to the insurer or reviewing the policy position, has created a gap in the block's insurance cover that will only be discovered when a claim is made.
The Specific Risks
Lease breach: user covenant
The standard "private residential dwelling" user covenant prohibits using the flat for anything other than occupation as a single private home. A rotation of paying holiday guests is commercial use, not private residential occupation. Breach is typically clear where the lease wording is standard.
High risk of breachLease breach: subletting restriction
Many leases prohibit subletting without the landlord's consent, or prohibit subletting of part of the flat, or require a minimum tenancy term. A short-term platform let almost certainly engages one or more of these restrictions. Where a consent requirement applies, consent will rarely be forthcoming for Airbnb-style letting.
High risk of breachBuildings insurance void or compromised
Residential buildings policies are not written to cover commercial short-term holiday letting. Undisclosed change of use can allow the insurer to decline claims or void the policy. The risk is most acute where a claim arises from damage caused during a guest stay that the insurer can trace back to the letting activity.
High risk if undisclosedPlanning enforcement
Exceeding 90 nights per year in London without planning consent is a change of use. Some London boroughs actively monitor platforms and pursue enforcement. The leaseholder is the planning applicant and bears the enforcement liability, but a planning notice on a property in the block creates reputational and administrative complications for the RTM company.
Medium risk for regular operatorsNoise and nuisance complaints
Transient guests are more likely than long-term residents to cause noise, leave common areas in poor condition, and use shared facilities carelessly. Other leaseholders will direct complaints to the RTM company. Where the source is known to be a short-let flat, the RTM company needs a response that addresses both the immediate nuisance and the underlying lease position.
Medium ongoing riskSecurity and access control
Short-term letting involves a continuous flow of unknown individuals accessing the building, using key safes or electronic lockboxes on the exterior, and potentially propping open communal doors. This compromises the building's access control and is a fire safety and security issue that the responsible person cannot ignore.
Medium security riskWhat the Lease Says: Three Possible Positions
Before taking any enforcement action, read the specific lease. Not all leases are drafted identically, and the approach depends on what the lease actually says.
Lease prohibits short-term letting expressly or by user covenant
Most standard long residential leases contain a covenant to use the flat as a private residential dwelling only, which on its own is sufficient to prohibit short-term holiday letting. Some also include explicit restrictions on subletting without consent, or on lettings of less than six months. Where either of these provisions is present, the breach is clear. The RTM company can proceed to a formal breach notice without needing further legal analysis.
Lease is silent on short-term lets or contains a permissive subletting clause
Older leases, particularly those drafted in the 1970s and 1980s, sometimes have permissive subletting clauses allowing the leaseholder to sublet with or without consent, without specifying a minimum term. Where the lease does not restrict the use sufficiently to prohibit short-term lets, the RTM company has weaker grounds. In this position, take legal advice before asserting a breach that the lease may not support. The insurance and planning arguments remain available regardless of the lease position.
Lease contains no user covenant or subletting restriction
Unusual in a modern residential lease but not impossible, particularly in converted stock where lease drafting was informal. Where there is no user covenant and no subletting restriction, the RTM company cannot enforce through the lease on those grounds. The planning position (90-night rule), the insurance notification obligation, and the nuisance covenant (most leases do have one) remain as potential levers. Legal advice is essential before any formal step.
The Planning Position in London
In London specifically, short-term residential letting is governed by the Deregulation Act 2015, which introduced a permitted development right allowing temporary sleeping accommodation for up to 90 nights per calendar year without planning permission.
What this means in practice:
- A leaseholder who lets their flat on Airbnb for up to 90 nights per year is within the permitted development right and does not need planning consent from their borough.
- A leaseholder who lets for more than 90 nights in a calendar year has changed the use of the property from residential (Use Class C3) to short-term let (Use Class C1 or sui generis), which requires planning permission.
- The 90-night limit is per property per year, and runs across all platforms combined. A leaseholder who uses both Airbnb and VRBO cannot combine the limits.
- Airbnb enforces the 90-night cap for London properties on its platform, but other platforms may not, and the leaseholder is ultimately responsible for compliance regardless of what the platform does.
For RTM directors, the planning position is a supporting argument rather than the primary one. Planning enforcement is the local authority's responsibility, not the RTM company's. But where a leaseholder is clearly operating as a commercial short-let business and has exceeded the 90-night limit, flagging the planning breach to the borough's planning enforcement team is a legitimate escalation step after the lease enforcement route has been pursued.
How to Identify Short-Term Letting in Your Block
Most short-term letting in residential blocks is identified through complaints from other leaseholders rather than proactive monitoring. But there are straightforward steps an RTM company or managing agent can take.
- Search the platforms. Search Airbnb, VRBO, and Booking.com by postcode or address. Most listings include photographs of the interior and exterior that make identification straightforward. Screenshot the listing and note the URL, listing name, and number of reviews.
- Review the reviews. Platform reviews typically include the reviewer's name and the approximate date of their stay. A flat with 40 reviews over two years is a commercial operation. A flat with two reviews in three years may be a leaseholder letting occasionally when they travel. The review volume and frequency indicate the scale of the activity.
- Record complaints. Any complaint from a leaseholder or resident about unfamiliar people accessing the building, noise from a specific flat, or a key safe attached to the exterior should be recorded, dated, and linked to the relevant flat. This creates a chronological evidence record that will be needed if the matter proceeds to Tribunal.
- Inspect communal areas. Regular physical inspections will reveal key safes or lockboxes on exterior walls or communal door frames, luggage left in hallways, and higher than normal wear on communal areas near a specific flat.
The Enforcement Process
Read the lease and confirm the breach
Identify the specific covenant being breached: the user covenant, subletting restriction, or both. Note the precise wording. If you are uncertain whether the activity constitutes a breach under the specific lease terms, take legal advice before proceeding. An assertion of breach that the lease does not support will be quickly dismissed and may allow the leaseholder to claim costs at Tribunal.
Notify the insurer
Before doing anything else, inform the block insurer that a flat in the building has been identified as operating short-term lets. Ask for written confirmation of how this affects the policy. Some insurers will issue an endorsement noting the activity; others will require the letting to cease as a condition of continued cover. Either way, the RTM company has fulfilled its disclosure obligation and documented that it acted promptly on the information.
Write formally to the leaseholder
Send a letter in writing (and by email if available) to the leaseholder setting out: the specific clause being breached, the evidence of the breach (platform listing, dates, review count), the insurance implications including the risk to the policy, and a deadline for compliance (typically 14 to 21 days). The tone should be firm and factual, not threatening. Most leaseholders stop the activity when they understand the insurance consequences.
If no response: Tribunal application
Where the leaseholder does not respond or does not comply by the deadline, an application to the First-tier Tribunal (Property Chamber) for a determination that a breach of covenant has occurred is the next step. The Tribunal considers the evidence, reads the lease, and determines whether a breach exists. A Tribunal determination confirming the breach is then the basis for forfeiture proceedings if the activity continues.
Section 146 notice and forfeiture (last resort)
Where the Tribunal has confirmed the breach and the leaseholder continues, the RTM company can serve a Section 146 notice under the Law of Property Act 1925, giving the leaseholder an opportunity to remedy the breach. If the breach continues after the notice period, forfeiture proceedings can be commenced. Forfeiture of a long residential lease is an extreme remedy that courts treat cautiously, but its availability is a significant deterrent once the Tribunal route has been completed.
If the RTM company or managing agent becomes aware of short-term letting and does nothing for a significant period, a court may find that the breach has been waived and that enforcement is no longer available in respect of the historical activity. Acting promptly when the breach is identified is important not just for practical reasons but to preserve the legal right to enforce. Do not delay formal action for more than a few weeks once the breach is known.
For how to approach noise complaints from the same flat in parallel with the lease enforcement process, see the forthcoming post on Noise Complaints and Nuisance in Blocks of Flats. For the broader question of what a well-managed RTM company should be doing, see What Makes a Good Managing Agent?
Frequently Asked Questions
It depends on the lease. Most long residential leases contain a user covenant requiring the flat to be used as a private residential dwelling only, which prohibits short-term holiday letting. Some leases also contain explicit subletting restrictions. Where either provision is present, Airbnb-style letting is almost certainly a breach. In London, the 90-night annual planning limit also applies regardless of the lease position.
It can. Residential buildings insurance is typically not written to cover commercial short-term holiday letting. If a claim arises from a flat being used for Airbnb and this was not disclosed to the insurer, the insurer may decline the claim or seek to void the policy. RTM directors who discover short-term letting should notify the insurer immediately to protect the block's coverage position.
Under the Deregulation Act 2015, London properties can be let on a short-term basis for up to 90 nights per calendar year without planning permission. Exceeding this limit requires planning consent from the relevant borough, as the use constitutes a material change from residential to commercial. The limit applies across all platforms combined. Airbnb enforces this cap for London listings on its own platform; other platforms may not.
Yes, where the lease contains a covenant being breached. The process is: confirm the breach by reading the lease, notify the insurer, write formally to the leaseholder citing the specific clause and setting a compliance deadline. If the leaseholder does not comply, apply to the First-tier Tribunal for a determination that a breach has occurred. A Tribunal determination confirming the breach then supports forfeiture proceedings if the activity continues. In practice, most cases resolve after the formal letter stage.
Search the flat's address on Airbnb, VRBO, and similar platforms. Screenshot any listings found. Read the lease of the specific flat to identify the relevant covenants. Notify the managing agent (or act directly if self-managing) to write formally to the leaseholder. Keep records of all steps taken. Act promptly: delay risks waiving the right to enforce in respect of historical breaches.
Short-term letting problem in your block?
Neon manages lease enforcement for RTM companies across East London and Essex, including identifying short-term letting activity, notifying insurers, and managing the formal breach process. If your current agent is not acting on it, that is a management failure with real consequences.
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