Is Subletting Illegal?

The increase in rent prices and a shortage of affordable housing have led many tenants to resort to subletting. However, in reality subletting makes a victim out of both a landlord and a subtenant. The rules around subletting can be quite confusing for a landlord. Is it legal, or not? You may say to yourself that compared to other illegal activities, how bad really is subletting? It depends on a few different factors. Subletting can present itself in various ways; sometimes it’s unproblematic, but sometimes it can become a real issue.

We take a further look into the consequences of subletting and whether it is illegal.

What is subletting?

Subletting is when a tenant lets out the whole or part of a property they are renting to another tenant. Subletting is illegal if tenants sublet without permission from the landlord or if their tenancy agreement states that they are not permitted to sublet yet they do it anyway. And landlords can take legal action in response to subletting. For instance, in the new Renters Reform Bill, landlords only need to give tenants 2 week’s warning to repossess the property due to a breach in the tenancy by the tenant such as illegal subletting.

Often, a person takes out a tenancy with a landlord or letting agent, but then never actually moves in. Money is the motive here since the tenant then re-lets the property to another subtenant for more money to make a profit. In other instances, the tenant might move into the property for a short while to avoid arousing suspicion, before then continuing to sublet.

Subletting in Houses in Multiple Occupation

A tenant might also draw up tenancy agreements for individual rooms within a property and let them out separately, potentially turning the property into a HMO (House in Multiple Occupation). This is a property rented out by at least three people who are not from one ‘household’ but share facilities like the bathroom and kitchen. A tenancy of this type requires different insurance and mortgage conditions, so when it’s happening behind a landlord’s back they could be breaching their contracts without knowing.

HMO landlords need to keep on top of tenants dabbling in subletting. To help cover your back, be sure to check out the extensive HMO landlord insurance we offer through the top-quality providers we work closely with here at CIA Landlords.

Can subletting be legal?

Yes, subletting can be legal and it isn’t always against the rules. A tenant can legally sublet part of a property if they ask for the landlord’s permission first. Nevertheless, most landlords don’t allow it, but there are some out that will. This is often laid out within the tenancy agreement. If a landlord includes a clause that says a tenant must seek their permission before subletting, the landlord can’t then refuse permission if the tenant seeks it and the request is reasonable. It’s either okay, or it’s not.

If the tenancy agreement doesn’t mention subletting, and the tenant would like to sublet, they still need to ask permission. The landlord can then refuse this for any reason. Of course, if the landlord agrees and gives the tenant the go-ahead to sublet, then the act would not be illegal.

How do I know if my tenant is illegally subletting?

It’s time to get your detective head on and look out for the subtle signs that could mean that your tenant is subletting without you knowing. Sometimes it just comes down to thinking logically. For instance, if your tenant is a single person and your property is much larger than they would need based on who is listed on the tenancy agreement, then this should be your first red flag. Why are they paying to rent out a property with that much wasted space?

You should also be suspicious if your tenant is making excuses as to why you can’t visit the property and making it difficult for you to do so. If they’re reluctant for you to come around, chances are that they are hiding something. When you do carry out your inspections, look out for additional clothing and shoes, excessive rubbish for the number of registered tenants, and additional bedding and toothbrushes. All of these things can be tell-tale signs that you may not be aware of the whole situation. Just be sure to provide at least 24 hours’ warning before performing property inspections to respect your tenant’s right to the ‘quiet enjoyment’ of your rental property.

How can I avoid my tenant illegally subletting?

Avoiding illegal activities such as subletting is all in the tenant screening process. Although things can slip through the net, you want to take every precaution to ensure that you are letting your property to a trustworthy and honest tenant. Firstly, make sure that you verify a person is who they say they are. Carry out a residential check by comparing addresses shown on the application with those shown on the ID documents and any utility and/or telephone bills supplied. You should also make sure that they can afford the rent by carrying out an affordability check, and that they have honoured past tenancies by getting a previous landlord reference.

Get references and bank statements

It’s also a good idea to try and gain an employer reference for more evidence that they are trustworthy. Asking for three months’ bank statements is also a good way of determining whether someone has the potential to be a fraudulent tenant. Look out for abnormal activity such as multiple large payments from people, or lots of transfers from account to account.

What do I do if my tenant is illegally subletting?

It’s likely that if your tenant is illegally subletting, they have broken a term in their tenancy agreement. If that’s the case, try and contact your tenant to let them know that they are in breach of their tenancy agreement. It might be tricky to track them down – they probably won’t want to make themselves easy to contact. So, use the information collected on the tenancy application or approach the tenants subletting your property to see if they can offer any contact information. Who knows – it could just be a misunderstanding. You will also of course have the grounds to take action to evict your tenant, so it depends on how lenient you want to be.

If your tenant is subletting to multiple people, making your property a HMO, you can inform the council and ask them to take action. This is the only instance where the council will be able to help, aside from if your subletting tenant is receiving housing benefits in which case they can also be reported. As for the police, they can only get involved if there is criminal activity taking place at the property. If you suspect this is the case, then voice your concerns.   Any good landlord deserves to have their property respected by their tenants, so subletting is not something to be taken lightly.

As a landlord, there are many things you can do to protect yourself. One of these actions can be taking out landlord insurance. With CIA Landlords, you can compare landlord insurance to cover you in the event of fire, theft or loss of rent. Find the best deal today by calling us on 01788 818 670 or completing our get a quote form.