Airbnb Boom

Founded in August 2008 and based in San Francisco, Airbnb is a “trusted community marketplace for people to list, discover and book unique accommodation around the world”-online or from a mobile or tablet. Whether a room for a night, a house for a week or a villa for a month, Airbnb connects people to unique travel experiences in more than 34,000 cities and 191 countries. It has become immensely popular over the years and has many benefits for both hosts and travellers. Hosts get to meet people from all over the world, while making a little extra money and travellers can often stay for less than the cost of a hotel room.

That said both property owners and their tenants may well find that they are either breaching their mortgage or insurance conditions or their rental agreements respectively by participating in Airbnb. Indeed this is highlighted by a recent English case Iveta Nemcova v Fairfield Rents Limited (2016). A tenant asked the First-Tier Tribunal whether she was contravening a clause of her lease agreement by renting out the property using Airbnb. The Tribunal found in favour of the landlord and the tenant appealed to the Upper Tribunal.  She argued that there was no specific term in her lease that said she could not sub-let but only a clause saying that the property had to be used  as “a private residence.” The tenant contended that as the lease referred to “a private residence” rather than “the private residence” that she could let out the flat, as it did not need to be the tenant herself occupying the property providing it was being used by someone as “a private residence”. The decision of the Upper Tribunal was that Airbnb short term lets were lacking the necessary degree of permanence to amount to using the property as “a private residence” and found in favour of the landlord.

Of course this is an English case and is not binding in Scotland but tenants here should be equally aware and check their leases. In Scotland in terms of the Housing (Scotland) Act 1988 Section 23, there is an implied condition that a tenant in an assured or short assured tenancy can only sub-let or assign his or her lease with the landlord’s consent unless the lease specifically states otherwise. So if a tenant in Scotland wishes to let out property he or she would need to examine the stipulations of the lease for an express clause and if there is none then the landlord’s permission should be sought. The landlord can refuse and there is no need for the refusal to be reasonable.

A property owner or a landlord considering using Airbnb should seriously give thought to the implications before doing so. A property owner with a mortgage may find that the lender’s conditions prohibit the owner from letting out the property at all. The landlord with a mortgage may only be able to let out his or her property using a short assured tenancy. Breaking these terms could mean the agreement is invalidated and risk the mortgage being called up.

Extremely importantly a property owner or landlord’s insurance policy will not normally cover short term lets or subletting, so if anything goes wrong the policy may not be valid. Also depending on the letting, an HMO licence may be necessary and if the letting or subletting amounts to a change of use then planning permission may be required.

If you would like more information please contact Alison Gourley by email on ajg@mitchells-roberton.co.uk or by calling 0141 552 3422.

Acceptance in Lieu

An 18th century portrait of the 5th Earl of Carlisle by Joshua Reynolds has been accepted by the nation in lieu of £4.7m inheritance tax.

The Acceptance in Lieu (AIL) scheme is administered by Arts Council England and enables taxpayers to pay Inheritance Tax by transferring important works of art and heritage objects into public ownership. The taxpayer is given the full open market value of the item. The object is then allocated to a public museum, archive or library by the appropriate minister.

The Acceptance in Lieu Panel advises on whether property accepted in lieu is of suitable importance and offered at a value which is fair to both the nation and the taxpayer. In the last decade the scheme has apparently brought over £250m of cultural property into public collections.

In this case the full length portrait of the lavishly dressed aristocrat has hung at Castle Howard- made famous as the backdrop for Brideshead Revisited- for more than 200 years.  Frederick Howard  (1748-1825) became the 5th Earl of Carlisle on his father’s death in 1758. The Reynolds portrait , painted in 1769 depicts him age 20 newly returned from an indulgent European tour.  Howard was a man who liked to enjoy himself, often losing large amounts of money at gaming tables and being  the reluctant guardian of the “bad boy” poet Lord Byron.

The Reynolds painting has been passed down through the family and its offer to the AIL follows the sale last year of art works and furniture by the castle’s present custodians to help secure the estate’s long term future.

The AIL scheme was created in David Lloyd George’s people’s budget of 1910 with hundreds of outstanding objects and collections given as a way of settling tax bills.

Edward Harley, the chairman of the AIL panel said “The acceptance in lieu scheme has been enriching our heritage for over a century; I am delighted that this masterpiece by Reynolds, one of the most important painters of the day, has entered our national collection under the scheme.”

Private Landlords Should Ready Themselves For New Legislation

Major new legislation is on the horizon which will make significant changes to renting and letting residential property in Scotland. The time of arrival is as yet unknown but it is expected to be late 2017 or early 2018.

At the moment landlords let property under ‘assured tenancies’ or ‘short assured tenancies’. Under the new legislation these will be replaced by the Scottish Private Residential Tenancy (SPRT).

Currently if you let a flat for 6 months or more you are able to get it back on the ‘no fault’ ground assuming your paperwork is in order and delivered properly. Under the new SPRT landlords will no longer have this automatic right to repossess the property. Instead they will need to show grounds for repossession, such as selling the property, a family member wanting to live there, rent arrears or anti-social behaviour.

The government’s intention in introducing the SPRT is to create more stability in the private rented housing market and provide tenants with greater security of tenure.

You should note that the new legislation is not retrospective and any existing assured or short assured tenancies will continue on the old basis but you will have to use the SPRT if you enter into a new tenancy agreement after the legislation becomes effective.

Although the change is not imminent I would recommend watching out for its advent and getting advice about how the introduction of the legislation will affect you.

If I can assist please call me Alison Gourley on 0141 552 3422 or contact me by email on ajg@mitchells-roberton.co.uk

LET IT

LET IT – be known that letting agents can be sanctioned for failing to comply with Tenancy Deposit Scheme rules.

For the first time, a letting agent, rather than a landlord, has been penalised since the introduction of regulations imposing an obligation on a landlord to secure deposits even if that landlord has appointed a letting agent.

Largs-based agents, Colvin Houston, were fined for £750 (reduced to £500 for an early guilty plea) for failing to secure two tenancy deposits on behalf of landlord clients totalling £925.

Trading Standards had received a complaint from a landlord who argued that the letting agent had engaged in an “unfair commercial practice” in terms of the Unfair Trading Regulations 2008. Under the 2008 regulations, a commercial practice is considered “unfair” if it fails to meet the special standard of skill and care to be expected in the trader’s field of activity.

Trading Standards successfully argued that paying a deposit into an approved scheme is the standard of care reasonably expected of a letting agent and failure to do so is an offence under consumer law.

Colvin Houston tried to argue that the landlords in question were not consumers but commercial landlords. This was not accepted by the court and a fine was levied.

If you are a letting agent and would like advice on your obligations please contact Paul Neilly on 0141 552 3422 or pdn@mitchells-roberton.co.uk

Mitchells Roberton Great Solicitors Bake Off

On Thursday 29 September 2016 our firm held a bake off competition to raise funds for Macmillan Cancer Support.

There were 6 entrants Alison, Angela, Jan, Paul, Sarah and Willie. Each produced wonderful cakes.

The judges were our very own Paul Hollywood (aka Donald Reid) and Mary Berry (aka) Morag Inglis.

After much tasting and deliberation the judges came to a decision.

While complementing all the entrants on their baking skills they named the top three bakers in reverse order:

Paul was third

Jan was second

ALISON WAS THE WINNER WITH HER PERFECT CARROT CAKE.

I have to say that if I had been a judge Sarah’s white chocolate and strawberry cheese cake would have been my number 1 !

The cakes were then all enjoyed by the rest of the staff.

We raised £220 and had a lot of fun.