How to Avoid Sub Letting Scams

Written By PropertyLoop
February 19, 2021

Around 3.3 million people were living illegally as tenants, according to research revealed by insurers Direct Line.  

The company’s investigation showed they weren’t listed on a tenancy agreement. In other words, they were unofficially sub-letting, with the tenancy agreement officially in someone else’s name.  

Landlords were unaware their property was being advertised for let on sites such as Airbnb and Gumtree, many of them simply content take the rental money each month. And yet, sub-letting is a criminal offence (if it’s done without the know-how of the landlord). Not only that, but it usually invalidates landlord insurance too. So, it’s important to uncover sub-letting practices if you believe your tenant may be guilty of it. 

It’s always a good idea to put a clause in the tenancy agreement advising that sub-letting your property isn’t permitted. 

How Can You Tell if Someone Is Sub Letting?

  • He or she was happy to pay a large amount of rent upfront ie six months to a year 
  • They wanted a five-bed house yet there’s only two of them 
  • When you go around to inspect it looks like there’s more than two people living there ie lots of toothbrushes in the bathroom and sleeping bags lying around 
  • Neighbours say it’s always really noisy, as if there’s a party on every night 
  • They are reluctant to let you carry out an inspection and always coming up with some sort of excuse 
  • Neighbours complain there’s an awful lot of rubbish for two people 

What Are the Consequences of Sub Letting?

If your tenants sub-let, chances are they’ll attempt to cram as many people into the property as possible. And that usually means turning it into an HMO. However, they obviously won’t have applied for an HMO licence.  

This means that should they get caught then you, as the landlord, will get the local authority fine for not having a licence. They probably won’t have complied with health and safety conditions either. The fines could be as much as £50,000, depending on the authority. You’d most likely also be banned from renting out property in the future. Be aware that you can’t claim ignorance of the situation – that’s not deemed a credible enough defence. 

There is a strong likelihood that should your mortgage lender discover your tenant is illegally sub-letting, then they will pull the funding. 

Having to evict a tenant who is sub-letting won’t be easy – especially if they disappear after their deception has been uncovered. This could end up taking months, meaning you’re not receiving any rental income for months and having to fork out for court costs and probably bailiffs later down the line. 

What a Landlord Can Do if There’s Illegal Sub-Letting

If you suspect that there’s illegal immigrants living in your property then contact the Home Office immediately. If it’s become an HMO then let the local council’s Housing department know so they can do their own investigation. 

Or, if neither apply, then simply start eviction proceedings – as you would with any tenant ie serve a Section 8 Notice on the official tenant because he or she has breached the tenancy agreement by sub-letting. You may have to apply for legal possession of your property via the courts but once this is granted you can send in bailiffs to remove the sub-tenants for you. 

How to Avoid Tenant Sub-Letting in the First Place

Make sure you screen prospective tenants for your property. That means getting references and verifying their identity. Always listen to your gut too – you’d be surprised how efficient this means of weeding out can be. And finally, keep up with neighbours – they can act as your eyes and ears to check there’s nothing untoward going on. 

PropertyLoop is the world’s first commission free lettings platform. Our platform allows landlords to advertise their rental, reference tenants, curate an agreement, register the deposit and collect rent completely for free! There are no hidden charges, upfront fees or any catches.   

Built by experienced property investors and landlords, PropertyLoop connects renters with the owners directly. Your property is featured on all major search and comparison portals as well as advertised by PropertyLoop everywhere else on the Internet. You don’t have to worry about finding the good renters, that’s the job for the platform. Receive offers straight to your mailbox and select the renters that are right for your property. Need access to busy London property market? No problem at all! PropertyLoop is the London market specialist with years of experience and unique knowledge. Whatever your needs are, you can always speak to friendly support staff. Renting property is made as simple as one, two, three. 

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