Buying a property to let is not an easy process – it’s expensive, and it can feel like a real labour of love being a landlord in today’s market. So, what do you do when your tenant turns landlord and sublets your property? Should you accept it, or are you within your rights to be unhappy about this? With subletting on the rise in our towns and cities, this isn’t something that can be ignored.
What is it?
As the cost of living creeps up, people are getting more creative with how to save, and make, money.
One of the most popular ways to increase an income and minimise outgoings – especially in the UK’s pricey towns and cities – is for a tenant to sublet a property. The subtenant would have a tenancy for part of the property, which is let to them by the named tenant, who is acting as the landlord.
Why is it a problem?
Subletting can pose a problem with regards to you as a primary landlord’s mortgage of insurance conditions.
Additionally, research by the National Landlords Association (NLA) has revealed that almost 50% of tenants who sublet their property do so without their landlord’s consent. If you are not aware of who is living in your property, you can face many issues further down the line, for example you have no control over the sub-letters or their actions, but can be pursued should any anti-social behaviour, noise or nuisance notices arise.
What are the legal implications?
It is important to remember that your tenant needs your written permission before they are legally allowed to start subletting your property. In some cases, if you refuse the request and the sublet goes ahead you are permitted to start possession proceedings against your tenant for breaking the terms of their tenancy agreement and in some cases, social housing tenants can be prosecuted for unlawful subletting, which carries an unlimited fine and a potential prison sentence of up to two years.
It's only legal to sublet part of the property, such as a spare room. If they let the entire property, their status as a secure tenant could be invalidated.
If they choose to sublet, your primary tenant would take on the role as landlord. This would mean that they would be responsible for vital legal checks, such as Right to Rent checks on all incoming tenants. If your tenant fails to undertake these checks, and the incoming tenant is not legally allowed to rent in the UK, the primary tenant could face an unlimited fine, or even a prison sentence.
How can I stop it happening?
One of the first things you should do is make sure that the tenancy agreement that you provide your tenants with includes a clause stating that subletting is only allowed with the landlord’s permission, which will not be unreasonably withheld.
It was made illegal in 2015 for tenancy agreements to completely ban subletting within a property, however by including a clause which enables you to consider every request, you can work with your tenant, whilst still protecting yourself, your investment, and your primary tenant from potential difficulties!
What do I do if my tenant goes ahead and does it anyway?
If your tenant is illegally subletting, chances are they will be being fairly clever about the process. Before you do anything, it’s important to ascertain whether they are subletting or not! And this does require a little detective work…
If there are multiple occupants in a property which has been marketed for sole occupancy, you would expect to see an accelerated level of wear, tear and damage – after all, there’ll be a higher level of footfall! You will understand what you will expect to see in your property, so schedule a maintenance check and keep an eye open for tell-tale signs of another person in the property.
Without getting too Sherlock Holmes, pay attention to small details such as the number of toothbrushes in the bathroom, shoes by the door, and lived-in bedrooms in operation.
Finally, don’t underestimate the power of the curtain twitcher! A casual chat over the garden fence to neighbours to ask if they have noticed lots of different people coming and going from the property could shed some light on whether your single-person tenant has actually turned into small HMO!
If you assess that there is definitely someone else living there, the time has come for an awkward conversation with your tenant. From a legal point of view, your tenant can have a friend or relative stay with them, and as long as they are not charging them rent this would not be considered subletting.
However, if your tenant admits to taking in a tenant of their own (or if you manage to speak to the subtenant who clarifies the situation) you are able to start possession proceedings against your tenant to evict them using a Section 21.
If your tenant has sublet the entire property, they have forfeited their tenancy status. This means that the tenancy ceases to be secure, flexible or introductory, and they have lost the protection of the law. In this instance, you are able to start the eviction processes by serving a ‘Notice to Quit.’
How do I evict the subtenant?
Once the tenant that you have a legal agreement with is no longer in residence at the property, the tenant who was subletting is considered a trespasser. You have no legal agreement with this tenant, and do not require a possession order to evict this tenant, although you can arrange one if you choose.
It is worth considering though that in many instances this person acted in good faith, and rented a property through your tenant in the belief that everything was ‘above board’. Taking time to speak with them where possible, and if you can, come to an agreement that makes the change as easy as possible for all parties will help ease the pressure on this innocent party!
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