Findings published by the National Landlords’ Association (NLA) at the close of 2015 suggested that 11% of private tenants sublet their house or flat and only five percent do so with their landlord’s permission. This statistic means that more than half of those tenants subletting are doing so behind their landlord’s back. Not only are they doing it without consent, but without their knowledge.
The main problem is that subtenants haven’t been vetted. Their names are not known. The landlord doesn’t know how many are living in the property and they certainly haven’t paid a deposit or signed a tenancy agreement. Plus, if they know they’re only staying a short while and aren’t ‘on the books’, there’s nothing to stop them engaging in irresponsible or illegal activity. Moreover, even though the landlord knows nothing about this, they could be held responsible for anything that occurs on their property.
Legal implications
Even if subtenants are well behaved, their presence can put the landlord in a difficult legal situation. Subletting can break the terms of the landlord’s mortgage agreement and can invalidate his or her property insurance. It could also breach laws concerning overcrowding of a property or conflict with other health and safety standards.
The NLA advises landlords to insert a clause into their tenancy agreements specifically stating that subletting is only allowed with their permission, which will not be unreasonably withheld. Subletting needn’t be a problem so long as all parties are fully aware that it is happening and established rules and boundaries are respected. If that is not the case then landlords are left open to a wide range of risks, up to and including criminal prosecution.
Taking action
If you discover that your tenants have been illegally subletting your property, then you may need to take action against them; this may include giving them notice to quit. That is exactly the kind of situation where legal expenses insurance cover is invaluable. A policy will cover you for most costs incurred through pursuing tenants via the courts, including for non-payment of rent. However, to make sure that you are receiving the equivalent of rent payments during the process, you will also need to take out rent guarantee insurance.
Subletting is a situation that can easily get out of control and you need to be fully aware of what is going on in your property. Don’t leave yourself open to unnecessary risks. If you have any concerns contact us today.