Can residents in my apartment block stop me Airbnb-ing my negative-equity flat?
All residents in a development are subject to house rules and short-term lets are often associated with noise, parties and lack of concern for neighbours
An increasing number of management companies are moving to prohibit short-term holiday lets. Photograph: Getty Images
Q. I bought an apartment some years ago and was almost immediately in negative equity with it. Since then, I have moved on to rent a bigger apartment that is closer to my work and I now Airbnb my original apartment. However, at a recent management meeting of the building, the residents have decided to ban short lets and have even introduced penalties for owners who let their units out in this way. I was not aware of any trouble with the apartment I have been renting out, which is a one-bed, and I have been careful to rent to couples or small families, rather than to groups of friends who might make too much noise. I know for a fact that other apartments in the building are being let out on Airbnb. Where do I stand in objecting to this ban? The rent is helping me to get out of negative equity and I need to keep up the payments.
A. Your question relates to an issue that is a very topical subject of discussion at AGMs of owners’ management companies (OMCs). As in your development, an increasing number of OMCs are moving to prohibit short-term holiday lets, for several reasons.
One is noise and disruption – while you have been careful, short-term holiday lets are sometimes associated with late-night parties, people coming back in the early hours and a lack of concern for neighbours. It is unfortunately sometimes the case that while one or two people may rent the unit, other friends can then show up also and this is very hard to control by a landlord who is not on site. Also, noise can be caused by people coming and going at odd hours, such as to the airport.
A second concern is security – keys for short-term residents are sometimes left in unsafe places, such as in letterboxes. Also, short-term letting means different people in a building who are not known to regular residents. A third area of concern relates to wear and tear to common areas – from scuffing of wallpaper on staircases by suitcases to incorrect disposal of refuse.
All residents in a development are subject to house rules, including tenants of any duration and owner-occupiers. These normally contain rules in relation to noise and security and would normally be the first port of call for an OMC in dealing with such matters. However, if there are a number of complaints arising in a development, the issue for an OMC is that it is not practical for it to monitor individual units engaging in short-term lettings, some of which may be causing problems and some of which may not be. As such, the view increasingly taken by owners is to ban short-term holiday lets.
Property owners are also bound by the lease agreement they sign when they purchase a property. While most leases pre-date internet-based letting services, the lease may contain a prohibition on certain types of activity (such as running a business from the apartment) and your OMC may have relied on the lease provisions when introducing its ban on short-term lets. In some developments, the original planning permission will have certain conditions, for example, that properties would be for residential use only and not holiday use, so your OMC may be relying on this. It is possible that, in new residential developments, leases may be more explicit with regard to the use of a property for short-term holiday lets.
In relation to planning, even though there is no original condition on this, planning authorities have decided in a number of cases that ongoing use of a full apartment for short-term holiday lets is a material ‘change of use’ and, as such, requires the owner to apply for approval of this. Guidelines issued by the Department of Housing, Planning and Local Government state that planning authorities should be proactive in ensuring short-term letting activity complies with the planning code and the guidelines have noted the negative impact of short-term letting on the long-term rental market. Further guidelines are expected from the department in 2018.
As such, you do of course have the right to raise your points with your OMC and its managing agent or at a future AGM of members. However, if the members of the OMC have considered this matter and come to a clear conclusion, you may now need to move to a standard long-term letting arrangement, in what is at least a strong letting market for landlords.
Finbar McDonnell is a chartered property manager and member of the Society of Chartered Surveyors Ireland, www.scsi.ie