Suppose you have found a property you intend to rent as a short-term holiday let.
In that case, your solicitor will carry out due diligence on the property and will check that the title documentation does not contain any restrictive covenants which will prohibit the use of the property.
There have been reports in recent times of restrictive covenants that state properties should be maintained as private residences only and are not to be used for commercial purposes.
A holiday let would breach these covenants if they are in place. These covenants may be put in place to create sustainable communities and enjoyable places for permanent residents to live.
Such covenants are illustrated in the Nemcova v Fairfield Rents Ltd (2016) case, whereby the leaseholder rented out her London flat via Airbnb.
The freeholder took the leaseholder to court for breaching a private residence covenant, and the judge found it in the freeholder's favour and did indeed take the view that the covenant had been breached.
If you already own a second property, and would like to transition to renting the property out as a short-term holiday let, you must ensure that the covenants within the title deeds to the property do not prohibit such actions.