What is subletting? Is it Illegal? – Guide for Landlords and Tenants
You have found the perfect tenant who pays their rent on time, keeps their rental home in good order and is easy and pleasant to deal with. Then you discover they just happen to be subletting to someone you’ve never heard of – and they didn’t ask you first. While this sounds like a worrying scenario, a tenant subletting without consent needn’t be a disaster. There’s a clear process you can follow – if you need to do anything at all.
What is subletting
Subletting happens when an existing tenant lets part or all of a property they rent to another person. It’s perfectly legal, as long as the tenant seeks the private landlord’s permission first.
In the words of The Housing Act 1988: “If an existing tenant lets all or part of their home to someone else, known as a subtenant, then they must have the written permission from the landlord to do so, even if this is implied in the tenancy agreement.”
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Why do tenants sublet?
There are various genuine reasons why your tenant may have decided to sublet. If they are living in the property, they may be struggling to pay the rent alone or there may have been a change in their circumstances such as a relationship breakdown. They may also have been forced to take on a lower paid job.
Other reasons include:
Your tenant may need to be away from home for a short period but want to hold on to the property and make sure the rent is covered – otherwise they’ll break the terms of the rental agreement and could lose the apartment or house.
The tenant may have a year’s sabbatical abroad and, understandably, doesn’t want to be paying two lots of rent while away. Yet they want to be able to come back to the same apartment on their return to the country.
Subletting v Lodging
It’s worth pointing out that your tenant isn’t subletting if they have a member of the family to stay for several weeks or even longer. It would only be classed if subletting if they had a room to themselves exclusively and were paying rent to the tenant.
As a landlord can you refuse a sublet?
Whether or not you can refuse to allow your existing tenant to sublet to a friend, colleague or stranger, depends on what it says in his or her tenancy agreement. If, for instance, the agreement has a clause which states that the tenant can ask to sublet, then a landlord needs a good reason to refuse the request (and which must be done in writing). Otherwise, the tenant may be able to take the landlord to court.
A tenant may still be able to sublet if their tenancy is fixed as there is no mention of it being forbidden in the tenancy agreement. However, if they ask the landlord to sublet and are refused yet go ahead and get in another person, then your tenant can be charged with fraud. That’s because making money from renting when refused permission can carry a jail sentence or fine, depending on whether it’s heard in the local magistrate’s court or a crown court. They may also be forced to pay all the money they earned sub-letting to the landlord.
1. Ask is it really a problem?
The first question to ask is whether the unlawful subletting is causing a problem. If you are happy with the original tenant, rent is being paid on time and the property is well treated, you should discuss the matter with them and draw up a fresh tenancy agreement.
Without a new tenancy agreement, the person subletting is the tenant or lodger of your original tenant, not you. This may create issues later on since it’s difficult to evict a tenant if there is no tenancy agreement in the first place.
Subletting may violate the terms of your mortgage, if you have one, giving your lender the right to withdraw their loan. That’s because a number of mortgage lenders don’t allow subletting. It’s always worth checking beforehand, in the event you decide to go ahead and allow your tenant to sublet. And that’s not all. Subletting may also cause you difficulties with your building insurance provider. The result being you may have to find another insurer or increase your existing premiums.
2. Is there overcrowding?
If your tenant has brought in a number of people, your property may have become a house of multiple occupancy (HMO). Depending on how many people are living in your property this could bring additional responsibilities for you and even mean you are inadvertently committing a criminal offence – check the government’s HMO guidelines.
Multiple occupants could increase the risk of damage to your property. And if the home becomes an HMO, you could be contravening your mortgage and insurance terms. You should contact your lender and insurance company and report the situation your local council.
3. If you’d like them to leave
You have no legal agreement with the subletting tenants, so you have no right to evict them – attempting to do so could put you on the wrong side of the law.
If the original tenant is still living in the property, the subtenant is considered their lodger and enjoys the protection of lodgers’ rights. You can only remove the subtenant after you have evicted your own, original tenant.
Never accept money or rent from a subletting tenant, as this would be seen as consent to their presence in your property.
4. Approach the original tenant
It is always worth approaching your original tenant first, giving them 30 days to rectify the situation. But take care to do everything strictly by the book or your tenant may claim that you’ve harassed them or attempted to evict them illegally.
Identify how the tenancy agreement has been broken – the mere fact that they have sublet the property without your permission is likely to count as a breach.
If the tenant has moved out, they will have broken the clause in most tenancy agreements which states that the tenant should use the property as their main home.
Once you have identified a breach, you can serve your tenant with a notice to quit and start legal proceedings.
5. Or the subtenants
The subtenants may be unaware of the situation and willing to vacate the property voluntarily. Or you may be happy for them to stay, subject to a new tenancy agreement being drawn up and signed. While it might be worth speaking to the subtenants, tread carefully and under no circumstances should you accept any payments from them.
6. Legal action against the original tenant
If you decide to go ahead with legal action, you must serve your tenant with a formal written notice to quit. You can serve them with a Section 8 notice if, as is likely, he or she has broken the terms of their assured shorthold tenancy by subletting.
You may also be able to use a Section 21 notice to evict your tenants without a reason if they are no longer in the fixed term of their tenancy or they have a periodic tenancy with no end date. Find out more about these types on notice on the gov.uk website and evaluate which one is most appropriate for you. It is a good idea to get independent legal advice at this point.
Every notice must be in writing and will let the tenant know the date when it expires. The required notice period depends on the type of tenancy agreement. If the tenant is still on the premises once the notice has expired, you should to apply to the courts for a possession order.
7. Starting again
Once the original tenant has left, you can evict any remaining subletting tenants and start afresh. If you are certain you do not want your tenants to sublet then ensure that you include a relevant clause in your next tenancy agreement. Carrying out regular property inspections, subject to the law, will help you keep an eye on the property and deter subletting in future.
Remember, M&M Property has years of experience in the rental business. For support or advice on letting your property in Islington, Stoke Newington, Newington Green or Highbury, get in touch today.