Some people who work from home or run a business from their apartment or house could face legal action for violating the terms of the lease on their property, according to a legal scholar.
During the pandemic, the number of people working from home exploded, and many continued to operate from their apartments and homes after Covid restrictions were lifted.
Some people who want to use their property for Airbnb rentals have already been warned of the risk of legal action if the lease, which dictates the use of their listing, prevents this.
Now some of those who work for their employers or run a business from home – which could include people running a nail bar, music teachers and even builders stocking building materials – could face legal challenges. .
Leases often contain restrictive covenants – for example, they may say that the property can only be used as a residence for one family, or that it cannot be used to run a business.
Michael Poulsom, a senior lecturer at Manchester Metropolitan University Law School, says it will likely only be a matter of time before landlord litigation takes place to stop or restrict the practice.
“In England and Wales, clauses prohibiting the use of residential property ‘for any business or commercial purpose’, ‘otherwise than as a single private dwelling house’ are very common in freehold titles and leasehold, and that work-from-home violations of these covenants remain largely unresolved,” he says.
Poulsom estimates that half of properties in England and Wales could have these covenants which prevent commercial use.
“This is of particular concern to leaseholders, against whom recourse by the landlord to terminate the lease is a possibility.”
While landlords may have overlooked people violating lease terms during the pandemic, Poulsom suggests that now could change and lead to legal action.
Non-compliance with the clauses of the lease can have serious consequences for the resident. This can start with a notice being given, all the way to legal action to waive the lease, which effectively means that the lease is terminated and the property is lost.
“I think if you have someone sitting in front of a laptop at their kitchen table, doing what they normally would do in their office, the chances of the owner suppressing that are probably pretty slim,” he says.
“Once you get into the situation where people are doing something that is public, with the result that customers start showing up at the property or the amount of traffic on the street increases, the commercial activity starts to become more visible, more intrusive.. I think it’s potentially a risk [for legal action].”
Some people looking to buy or use a property as an Airbnb, and who had assumed they could rent it out on a short-term basis, found out that was not allowed.
The leases of many apartments often contain small print which, for example, could prevent them from being rented for periods of less than six months. Renting them despite these rules increases the risk of legal action. Some will not be aware of this or decide to go ahead and hope for the best.
In the case of an apartment building, the free owner can very well be represented by a management company. Renting an apartment for a short period could violate clauses that limit its use to a private residence only.
The best advice in any case is to check the lease and documents very carefully. If necessary, check with the owner or management company or management agent and consider obtaining legal advice.