Subletting: What Can Landlords Do?
What Is Subletting?
If after moving into a rental property a tenant were to let out either part or the entire property out to another party, this would be considered a sublet. This would not be seen as the owner of the rental property taking on another resident, but rather the existing tenants would become the “landlord” for the new occupants.
Despite perhaps being a way in which tenants could generate additional income to help cover their existing rental commitment, renters should be cautious before hastily advertising a room to rent. As with many aspects of a successful tenancy period, transparency is essential. As can be expected, trying to operate a sublet in a property you’re renting without first informing the landlord can land some renters in hot water, but this doesn’t have to be the case.
When subletting is taking place in a rental property, the owner of the letting opportunity is considered to be the “head landlord”, with the party they hold a tenancy agreement with being referred to as the “mesnse tenant”, with the remaining renter being deemed the subtenant as they hold a tenancy agreement with a tenant of the property.
What Is the Difference Between Subtenants and Lodgers?
When a tenant takes on a subtenant, the new residents will enjoy exclusive access and right of use to the parts of the property they are renting, and will therefore be entitled to the right to quiet enjoyment. However, lodgers by comparison have greatly reduced rights and face a far swifter eviction process by the landlord than a tenant as they will not need to be served a notice period before needing to vacate the rental property. The main distinction between lodgers and renters is that lodgers are not entitled to the exclusive use of their rental accommodation, with the kitchen and barroom being shared.
Is Subletting Illegal?
This could perhaps be considered a grey area, although through communicating with the original landlord of the property, subletting can be done without apprehension of legal repercussion. In some cases the residents of a rental property may be able to argue that they are within their rights to sublet the property if this is not stated within the terms of the original tenancy agreement. If the landlord explicitly states that the occupants of their property must not sublet, then in doing so they will be found in breach of this agreement and any subletting be deemed unlawful.
However, in some cases the tenancy agreement will allow for the tenant to sublet the rental property on the condition that they first seek out the permission of the landlord. This is enforced by the Housing Act 1988, which affirms that tenants are unable to assign a tenancy or sub-let or part with possession of the whole or any part of the dwelling-house let on the tenancy. With this being said, if such a term is included in the tenancy agreement and a tenant approaches the landlord requesting that they be permitted to sublet the property, the landlord must be able to demonstrate a justifiable reasoning for withholding their consent.
If a landlord does not wish to allow for then the tenants of their rental property to sublet it is highly recommended that this is stated within the tenancy agreement to avoid a dispute further into the rental period. In most cases off unlawful subletting, of course the landlord is unaware that this is being conducted in their rental property. To ensure that property owners are not caught off guard by illegal subletting they can conduct regular inspections of their property; however in doing so it is essential that they respect their tenant’s right to quiet enjoyment of the property and first gain their permission before entering.
What if a Tenant Sublets Without Landlord Permission?
If a tenant is found to be residing in a rental property without the knowledge of the original landlord, this can of course complicate proceedings with the tenancy. As can be expected, this would be a violation of the tenancy agreement and give the owner of the rental property ample justification to pursue eviction proceedings through a section 8 notice and reclaim possession of the rental.
If the owner of the rental property is looking for both the tenant and the subtenant to vacate the rental, it may be easy to brand this as unnecessarily heavy handed and adopt a stance in support of the tenants. However, in many cases a landlord will be found to be in breach of their buy to let mortgage if they are found to be permitting a tenant to sub-let. Similarly, many providers that offer landlords insurance policies on buy to let properties will likely have conditions that prohibit subletting from taking place in the property the insurance is taken out for. This may also work in the landlord’s favour if they are looking to pursue eviction proceedings against the mesne tenant and there was no terms explicitly preventing the tenant from subletting the property in the original tenancy agreement.
When a tenant is subletting their property, in most circumstance they will still be residing in the property whilst doing so. If this is the case and the property has ample space to accommodate an additional tenant, it may be worth curating a new tenancy agreement rather than requesting that they vacate the property. Naturally, this should be evaluated on an individual case by case basis and shouldn’t be taken lightly by the landlord. Just as you wouldn’t rush into a tenancy agreement without first referencing a prospective renter, the same rigorous scrutiny must be applied to the subtenant. If they have been found to cause considerable damage to the property and its furnishings or have otherwise acted in an antisocial manner, it may be best to ask them to vacate the property.
With this being said is important to note that despite the circumstance in which it was created, the subtenant’s tenancy agreement must be respected as valid. This doesn’t mean that their tenancy cannot be terminated however, as if the mesne tenant ends their tenancy, or the mesne’s tenancy is brought to an end, in some cases so too will the subtenant’s.
Subletting With the Landlords Permission
However, there are some circumstances under which the sub tenancy can continue. The simplest route is for the owner of the rental property and the subtenant to curate a new tenancy agreement, technically brining the sub tenancy to an end, but allows for the renter to remain in the rental property. It is also worth noting that in some cases the subtenant may be able to argue that the owner of the property was complicit in the sub tenancy, or approved of it as they accepted rental payments. It is for this reason that if the landlord is looking to remove the subtenant and the original tenant from the property, they should not accept any form of payment from the new resident.
Given the circumstance it is likely that the owner of the rental property will be looking to remove the tenant that created the sub tenancy to vacate the rental property. With this in mind it could be possible for the tenant and landlord to negotiate a surrender of the tenancy agreement. This would result in the subtenant being able to assume the position of the previous tenant under a new tenancy agreement with the landlord.
Naturally not all property owners in the rental industry take a blanket ban against subletting in their rentals; however there can be serious benefits for both the landlord and tenant when doing so.
Perhaps one of the greatest fears of landlords is experiencing extended void periods. Not only would having an unoccupied rental property leave landlords with no rental income to support their property management, or cover any interest payments on a buy to let mortgage, but this could also seriously reduce the amount of protection granted by their insurance policies. However, by allowing tenants to sublet your property this will increase the appeal of your rental opportunity once it is hosted on the market. Whilst this may seem like a niche, this could prove ideal for those that target young professionals in city centre locations that travel frequently as they could be enticed by the additional income they could generate from the opportunity. Not only this but if the rental property is being sublet, then to state the obvious, it is not empty allowing for the landlord to enjoy additional security surrounding their rental income.
Rights of a Subtenant
If a tenant chooses to sublet it is essential they note they are bound to the responsibilities of a landlord established by the Landlord and tenant act 1985. To this end the mesne tenant must uphold their obligation to attend to the repair and maintenance of the rental property, alongside ensuring that the accommodation is fit for human habitation. This comprises assessing the structure and exterior of the property, alongside maintaining appliances and furnishings within the accommodation.
With this being said, as the mesne tenant will themselves be renting the property, t it is highly likely that these obligations will have already been dutifully attended to by the head landlord, or owner of the rental property. This is not to say that the mesne tenant is absolved of these duties but rather that they are simply able to pass these concerns or any necessary remedial work highlighted by the subtenant onto the head landlord for it to be addressed.
Further to this is the original tenant is choosing to furnish the rental accommodation being provided to the subtenant, they must first ensure that all of these additions to the property are compliant with current fire safety regulations. The original tenant should also request that the head landlord issues them with the gas and electrical safety certificates, alongside the energy performance certificate as this documentation will need to be provided to the subtenant.
Whilst this may be common knowledge to experienced landlords, tenants may not appreciate that they will have to carry out right to rent checks on any prospective subtenant. If a tenant is found to be renting out a property without first having conducted the appropriate checks on the aspiring renters immigration status they could face a fine of up to £3,000. However, the situation is far bleaker if either the tenant or landlord is found to have been renting out a room to a subtenant they were either aware, or suspected did not possess the right to rent, they could face an unlimited fine alongside a five year sentence in prison.
It is also essential that another property inventory is carried out by all parties concerned in the rental agreement. This would comprise comprehensively documenting and detailing the condition of the rental accommodation alongside any furnishings and appliances it may contain. This will allow for the distinction as to when damage occurred in the property come the close of the rental period and tenancy deposits are being returned to the relevant parties.
Are you looking for an online property agent you can trust? Then check out PropertyLoop today. Built by experienced property investors and landlords, the website connects renters with the owners directly. Why not sign-up to see it in action? It’s a free platform that only charges a small fee once you get your rent money in. 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.
As a landlord you will gain passive monthly rental income from your buy to let and capital appreciation as the years flit past. And it’s exactly this capital appreciation ...
February 12, 2021
Stay up to date with the latest marketing, sales, and service tips & news.