Short-term letting a leasehold flat? Discover how Nemcova v Fairfield affects Airbnb use and what leaseholders should do next.

Nemcova v Fairfield: What the Airbnb Ruling Means for Short-Term Holiday Lets

Dinah Jantasz December 16, 2025

Short-term holiday lettings through platforms like Airbnb have exploded in popularity in recent years. While they are a flexible way for property owners to earn income, they can also create legal and practical challenges for leaseholders, especially those living in blocks of flats. If you own a flat with a long lease and you are thinking about Airbnb lettings on a short-term basis, the landmark decision in Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC) is essential reading. It clarified what counts as a “private residence” under a residential lease and remains the leading authority on short-term letting restrictions.

Background to the Nemcova Case

The Nemcova case reached the Upper Tribunal and dealt specifically with short-term, Airbnb-style lettings of leasehold flats. Here is what happened:

The leaseholder, Ms Nemcova, owned a long lease on a flat in a residential block.
Her lease stated that the property must be used “as a private residence” only.
Despite this, she advertised the flat for short stays on websites like Airbnb and had guests staying for as little as a few nights at a time.
Neighbours began to complain, and the freeholder took the issue to the First-tier Tribunal, arguing that these short-term lets were a breach of the lease.
The First-tier Tribunal agreed, and the decision was later upheld by the Upper Tribunal.

The court found that guests staying for a couple of days at a time were not using the flat as a “private residence” in the way the lease required. It emphasised that for a property to be used as a residence, there must be a sufficient degree of permanence and connection between the occupier and the property. Simply sleeping in a place for a night or two does not qualify as using it as your home.

The Tribunal made clear that the “nature, frequency and pattern” of Airbnb-style use fundamentally differed from traditional residential occupation. This distinction remains the cornerstone of subsequent decisions.

What Does This Mean for Leaseholders?

This case is particularly important because many leaseholders assume that if there is no express ban on subletting, short-term lets must be acceptable. However, the Nemcova case shows that even if a lease does not outright forbid subletting, it can still be breached if short-term lets conflict with other lease terms, such as only using the flat as a “private residence”.

The ruling also demonstrates that it is not just about what is written in black and white; the way a property is actually used matters. If a lease states that a flat must be used as a private residence, and you are regularly renting it out to different people for a few days at a time, that is likely to be seen as a breach, especially if it disturbs other residents in the building.

It is also worth noting that many leases contain additional covenants, such as restrictions on business use, nuisance clauses, security obligations, or requirements not to cause annoyance to neighbours, which can be triggered even if the “private residence” clause is not. Short-term lettings may risk breaching several covenants simultaneously.

Practical Considerations for Short-Term Lettings

If you are a leaseholder considering listing your property on Airbnb or a similar platform, the Nemcova case highlights the importance of taking a cautious approach. Short-term letting is not always straightforward under the terms of a lease and could lead to complications.

Before proceeding, it may be sensible to:

Review the terms of your lease, particularly any clauses relating to use or subletting.
Reflect on how frequently the property would be let and whether this aligns with your lease.
Be mindful of any potential impact on neighbours, especially in shared buildings.
Consider seeking professional advice to understand how the lease terms may apply to your specific circumstances.

Leaseholders should also be aware of potential insurance implications, mortgage restrictions, planning requirements in certain local authorities, and the risk of enforcement action from managing agents. Many lenders and insurers treat short-term letting as a materially different form of occupation, which can invalidate policies or breach mortgage terms if not disclosed.

Every lease is different, and what is permitted in one case may not be in another. If in doubt, it is always best to take guidance before listing a property for short stays.

Why Nemcova Still Matters

Although the judgment was handed down in 2016, Nemcova remains the leading case on short-term letting of leasehold flats. Subsequent Tribunal decisions have followed the same logic, reinforcing the idea that:

Short stays typically do not meet the “residential use” requirement; and
Short-term letting can constitute a breach even without explicit wording.

With the rise of Airbnb and similar platforms, particularly in cities and tourist hotspots, more leaseholders are encountering disputes with landlords, managing agents, or other residents.

The Nemcova ruling serves as a clear warning: if your lease restricts the use of your flat to a private residence, regular Airbnb lettings may leave you exposed to legal action or enforcement by your freeholder.

Recent cases confirm that Tribunals are increasingly willing to issue determinations of breach, paving the way for landlords to serve Section 146 notices and, in extreme cases, pursue forfeiture. Even where forfeiture is unlikely, leaseholders can still face significant legal costs, service charge disputes, and reputational issues within the building.

For many leaseholders, the cost of resolving a dispute after the event far exceeds the cost of obtaining early legal advice before hosting guests.

Wider Issues Affecting Short-Term Lettings

Beyond Nemcova, the legal landscape around short-term letting is evolving. Key areas property owners should be aware of include:

Local authority regulation: some councils now require planning permission for material changes of use where properties are let more than a defined number of nights per year.
Building insurance: blocks may face increased premiums or refused cover where short-term lets are present, especially if guests cause damage.
Security and safety concerns: frequent occupier turnover can raise fire safety, key security, and anti-social behaviour risks.
Service charge disputes: managing agents may argue that increased wear-and-tear or additional management burdens justify higher contributions from units used as short-term lets.
Freeholder policy shifts: many landlords are now proactively amending leases on renewal or variation to prohibit or restrict Airbnb use.

Understanding how these issues interact with your specific lease is recommended before proceeding with any short-term letting activity.

How We Can Help

If you are concerned that short-term letting might breach your lease, or if you have received complaints or legal warnings from a landlord or managing agent, our experienced legal team can assist. We are here to review your lease, explain your legal position, and help you explore your options moving forward. We usually offer a no-cost, no-obligation 20-minute introductory call as a starting point or, in some cases, if you would just like some initial advice and guidance, we will instead offer a one-hour fixed fee appointment (charged from £250 plus VAT depending on the complexity of the issues and seniority of the fee earner).

Please email wewillhelp@jonathanlea.net providing us with any relevant information ensuring that any call we have is as productive as possible or call us on 01444 708640. After this call, we can then email you a scope of work, fee estimate (or fixed fee quote if possible), and confirmation of any other points or information mentioned on the call.

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This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.