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Short-term lettings, AirBnB and Planning


Thursday, January 5, 2017

The Issue: do AirBnB lettings require planning permission?

In October 2016 the Irish Planning Board, An Bord Pleanála, decided that:

  •  the use of an entire residential apartment on a year-round basis for a series of short-term holiday lettings constitutes a change of use;
  • such change of use raises planning considerations that are materially different to the planning considerations relating to the ‘normal’ use as a residential apartment;
  • the change of use is a material change of use, and therefore constitutes ‘development’ under the Planning and Development Act 2000, as amended; and
  • such ‘development’ is not exempted development, and therefore requires planning permission.

The Board’s decision arose from an appeal of an earlier decision by Dublin City Council in response to a question raised by Temple Bar Residents concerning an apartment in Crown Alley in Temple Bar, Dublin, which was being sold on the basis that it generated €79,000 in 2015 from short-term lettings via the AirBnB platform. The Residents used section 5 of the Planning and Development Act to refer a question to Dublin City Council as to whether such use constitutes ‘development’, and whether such development is exempted development. Dublin City Council determined that the use was a material change of use, and this decision was referred by the apartment owner to the Planning Board for review.

 

The Decision: commercial short-term lettings may require planning permission
The Board’s Inspector identified three questions to ask in deciding whether the use of the apartment for short-term lettings constituted development, and whether such development was or was not exempted development:

  • Has a change of use occurred?
  • If so, has a material change of use occurred such as would constitute ‘development’?
  • If development has occurred, is it exempted development?

Change of Use – The Board found that the use of the apartment for short-term holiday lettings constituted a change of use, for a number of reasons including that there was no one permanently occupying the apartment, it was no longer in use as a private residential apartment, its use was now short-term holiday lettings accommodation.

Material Change of Use – The Board found that the change of use was a material change of use, due largely to the different planning considerations raised by the new use, including:

  • the extent and frequency of coming and going to and from the apartment by short-term renters and servicing staff,
  • associated concerns for other residents in respect of security and general disturbance and
  • the fully commercial nature of the activity.

Exempted Development – The change of use did not come within any class of exemption under the Planning legislation.

 

The Implications: Landlords, property owners and neighbours
The Department of Housing, Planning, Community and Local Government issued a Circular on 22 December 2016 with a view to providing clarity to planning authorities and stakeholders.

The Department’s Circular emphasises the difference between properties which are:

a) only made available for short-term letting purposes on an occasional basis or for particular periods of the year,
b) partially occupied by the residential owners on an ongoing basis, and
c) exclusively used for commercial short-term letting purposes on a year-round basis.

The Department Circular directs planning authorities to focus planning enforcement action on scenario (c) above, entire properties which are used for commercial short-term lettings on a near-continuous basis.

The Department Circular suggests that enforcement action should not be focused on other scenarios, for example the renting out of a room or rooms of a property while the owner or principal occupier remains in occupation, or renting the entirety of a property for limited periods in the year. Accordingly, not all AirBnB or other short-term property lettings will necessarily be considered as having undergone a material change of use requiring planning permission. (The Department’s Circular does not however amount to an exemption from planning for those types of lettings – they must be considered in light of their particular circumstances).

The Department Circular indicates that a working group has been established to review and advise on the implications of the decision by Q2, 2017. In the meantime, planning authorities are encouraged to carry out enforcement action where necessary to ensure that properties in the scenario (c) above are subject to planning controls. Any person, including both landlords and other parties, may refer a question to a planning authority as to whether the use of a particular apartment, house or other property constitutes ‘development’ using section 5 of the Planning and Development Act. Planning authorities may also, at their own initiative, investigate short-term letting arrangements and initiate enforcement action even in the absence of third party complaint. In these circumstances the property owner or manager will be required to cease the unauthorised change of use and/or apply for planning permission.


Author

Alice Whittaker

PARTNER


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