For many years now, flats have been a popular investment. Put a medium sized two bedroom flat on the market and it will typically sell within days.
In cities such as Bath and Bristol, flats can be let quickly, earning the landlord a regular income plus longer term capital growth. Most such flats are let as Short Term Lets, typically the minimum let being six months.
This trend has changed the character of many blocks of flats. Traditionally such properties would be bought by older people downsizing. Often lonely, the property would become a small community where flat owners would ‘look out’ for one another. As managing agents we would see the AGM was a special evening where flat owners would dress, It was an important gathering.
With the move to ‘buy to let’ flats the nature of properties has changed. Tenants come and go and many properties have become ‘anonymous’, no one really knows who anyone is any more. Issues such as waste management also become problematic as tenants don’t know nor much care about rules and regulations.
Now we are seeing a new development, the short term holiday let. Companies such as AirBNB provide for landlords attractive incomes considerably better than the returns from traditional short term lets. In cities which are popular holiday centres, the growth in such properties is burgeoning.
What it means however is that houses are gradually turning into mini hotels, people come and go at all hours, larger properties are often attractive to stag or hen weekends. Live-in flat owners often get frustrated, feeling their quality of life is being compromised for someone else’s profit.
Community living can indeed prove tricky. But is there anything that can be done? Well the first step is to check the lease to see whether things like holiday lets are specifically excluded. Unfortunately because holiday lets didn’t exist when many of the leases were drafted they are rarely strong in this regards.
Some management companies have actually gone to the lengths of having their leases redrafted to specifically control how the flats can be used, but this can be an expensive process.
PM Property have developed a ‘third way’ that is low cost but does ensure the situation can be managed. Landlords wishing to operate a short term let are invited to put a proposal to the other leaseholders in the property, often offering to take a greater proportion of the service charge costs, thereby making it financially attractive to everyone in the property.
If there is support for the proposal we would produce a ‘licence’ setting out the conditions under which it should operate (noise, rubbish management, assurance flat occupiers are recorded etc.) are all agreed. It means that the landlord can get to operate the holiday let, while ensuring that disturbance to other residents is minimised. And if the licence is breached then it can be withdrawn and if the holiday let continues to operate the landlord will be in breach of the lease, a potentially serious situation for the leaseholder.
PM Property Management pride ourselves in being creative over problems. Saying ‘no’ would be easy, but all too often that is the lazy way of dealing with such situations. We like to think outside the box.