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Leaseholders who work from home warned they could face legal action

According to a legal academic, some people who work from home or run a business from their flat or house could face legal action for violating the terms of their property’s lease.

During the pandemic, the number of people working from home ballooned, and many have continued to operate from their flats and houses after the Covid restrictions were lifted.

Some people keen to use their property for Airbnb rentals have already been warned about the risk of legal action if the lease, which dictates what their home is used for, prevents it.

Now some of those who work for their employer or operate a business from their home – including people running a nail bar, music teachers and even builders storing construction supplies – could face legal challenges.

Leases frequently contain restrictive clauses – for example, they may say the property can only be used as a residence for a single-family, or it cannot be used to run a business.

Michael Poulsom, a senior lecturer at Manchester Metropolitan University Law School, says it is likely to be a matter of time before landlords litigation to halt or restrict the practice.

“In England and Wales, covenants which prohibit the use of residential property ‘for the purposes of a trade or business, ‘otherwise than as a single private dwelling house’ are very common in both freehold and leasehold titles, and whether working at home breaches those covenants remains in large part unresolved,” he says.

Poulsom estimates that half of the properties in England and Wales could have these restrictive covenants which prevent business use.

“This is of particular concern for leasehold owners, against whom the landlord’s remedy of forfeiting the lease is a possibility.”

While landlords may have ignored people violating the lease terms during the pandemic, Poulsom suggests this may now change and prompt legal action.

Breaching the terms of the lease can have serious consequences for the resident. This can start with notice being given, all the way up to court action to forfeit the lease, which effectively means the lease is terminated and the property is lost.

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