My Tenant Is Sub-Letting- What Should I Do?

My Tenant Is Sub-Letting

Sub-letting is one of those circumstances that can swing either way, it can be a beautiful thing or a complete pain in the ass.

If you’re a landlord, you’re probably reading this for one of two reasons:

  • 1) You’ve recently discovered your tenant is sub-letting and you want to know the legal implications i.e. what your rights are.
  • 2) You’ve had problems with a sub-tenant, and now you want to know how to get rid of the bugger.

In reality, most landlords don’t even know their tenant is sub-letting. Worrying! But that’s presumably not a problem (and it’s not in most cases), because if you’re unaware, it means the tenant is paying rent on time and everything is running smoothly. In other words, [sometimes] ignorance is bliss.

Personally, if I discovered my tenant was sub-letting without my consent, yet rent was paid on time every month and the property was being taken care as discovered through regular property inspections, I wouldn’t rock the boat. I mean, what’s the point? Sure, I’d probably be a little annoyed because my toe-rag tenant didn’t have the courtesy to ask for my permission, but beyond that… meh. I want an easy life.

In any case, let’s run through the FAQ’s…

Page contents

What is subletting?

Just so we all start from the same page…

When a tenant makes an agreement to accept rent from a person who is not part of the original tenancy agreement we call that sub-letting.

The sub-tenant/sub-letter (is that a word? Sounds more like a short note) has no legal relationship with the landlord, but is contributing to the rent.

Only the “official tenant” (let’s call him the OT) has the rights of a tenant, and the landlord only has legal obligations to the OT.

The OT is pretty much in the same position whether he has agreed with the landlord that he will be sub-letting or is sub-letting without that agreement (but it’s usually without the owners’ knowledge). The sub-tenant, to keep it simple, is the OT’s lodger, and has the rights of a Lodger, therefore the sub-tenant is NOT technically a tenant, so does NOT have tenant’s rights.

Most important aspects of sub-letting

Whether you’re willingly or unwillingly have a sub-tenant in your property, you need to ensure the following…

  • Many mortgage lenders do NOT allow sub-letting, so ensure it’s permitted otherwise your policy could be void and your lender may have the right to withdraw the loan. Yes, worrying.
  • Many BTL Insurance policies do NOT allow sub-letting, so ensure it’s permitted otherwise your policy could be void and you may not be entitled to make any claims if the time comes. Again, worrying!

    If it’s not permitted, the Insurer may increase the premium in order to include it in your policy. Of course, your Insurer may not allow it altogether, so you will need to find a new insurer that does cover sub-letting.

Subletting with the landlord’s permission

Subletting is perfectly normal, many landlords allow it.

In fact, some tenants make a business out of sub-letting, and it can be both profitable for the tenant and landlord.

There is a business known as ‘Rent to Rent’ where people, who often have no money of their own to invest in property, agree to pay a property owner a guaranteed rent for a specified period with the sole purpose of renting that property to tenants who will pay them more than they are paying to the owner.

This can be a mutually profitable relationship but there are pitfalls:

  • The word “guarantee” doesn’t actually mean, it’s reliable as a wet paper-bag. If the OT has no money to invest in his own property to rent, then it’s probably fair to assume you won’t get paid until he gets paid.
  • If the contract says that the OT will be responsible for repairs and replacements, then the landlord needs to keep an eye on the property to ensure that they are carried out. He is the person named at Land Registry and he will be the person that the council will go after if there are Health and Safety issues.
  • A Rent to Rent contract cannot be an AST unless the OT intends to live there with the sub-tenant. If he doesn’t, he will not actually be a tenant. It is also not a Company Let Contract because the occupiers will not be employees of the company. The Contract needs to be a Commercial Lease Agreement.
  • There are some large companies who operate very successful Rent to Rent businesses and they will have insurance in place or funds to support their guarantee. Many councils offer landlords Rent to Rent contracts and use the properties to help them to house people on their waiting lists or as emergency accommodation.

Why do some tenants sub-let?

Sometimes it’s a simple case of economics- the tenant wants to stay in the property but cannot afford the rent and/or the running costs. Sometimes their financial circumstances change during the tenancy, consequently they take in a sharer to help with the bills.

Some people just feel lonely or insecure living alone, particularly in unsavoury areas, so they want someone else in the property.

What should you do if your tenant asks permission to sublet?

If your tenant comes grovelling and asks for permission to sub-let, then you need to decide how that will work for you. You are not Social Services and you haven’t got to agree, but if you’ve got a good tenant, you might want to keep him.

Also think about what you will do if the OT decides to move out and you have no contract with the sub-tenant who wants to stay. You will be totally reliant on the OT sending the sub-tenant packing before he vacates, or you may have a very messy eviction case on your hands.

Assuming that doesn’t happen, but they both decide to vacate because you’re being a meanie-poop by not allowing sub-letting, you will then be in a position where you will need to spend time and money on finding new tenants, and that could be expensive, particularly if there is a void period during the process.

How can landlords prevent sub-letting?

If you’re adamant against subletting – many landlords are, ain’t nothing to be ashamed of – the following will help prevent it from happening altogether, or discovering the arrangement sooner rather than later…

  • Carry out regular property inspections. Here’s a guide on landlord property inspections. Showing your tenant you do regular inspections could act as a deterrent- it will make them think twice.
  • Make friends with the neighbours – there’s always a curtain twitcher who will grass ’em up. Take the time to talk them between lets and during inspections, and make sure they have your contact number.
  • Put a clause in your tenancy agreement which forbids sub-letting – if they ignore it, you may have grounds to serve Section 8 eviction notice. If there is no clause to prohibit sub-letting the tenant might see that as a green light. A clause might read something like:

    5.5 Assignment and Subletting
    5.5.1 The Tenant agrees not to assign sublet, part with or share the Premises with any persons other than the persons named as the Tenant or any other person approved of in writing by the Landlord to occupy or reside in the Premises.

    5.5.2 Not to take in Lodgers or Paying Guests without the Landlord’s written consent.

  • Never charge extra fees nor deposit which would amount to more than 1/6th of the annual rent because these payments are called a Premium and that gives your tenant the right to assign the tenancy to another person without your permission.
  • Develop a good relationship with your tenants so that they can talk to you if they are struggling with rent or bills, this will give you a fighting chance of being told if they are considering sub-letting.
  • Do thorough tenant referencing.

My tenant has sub-let without my permission, what can I do?

Unauthorised subletting is where it can go all terribly wrong, and increasingly is. It typically works in two different ways:

  • Scenario 1: your tenant is renting out another room/space in your property without your permission
  • Scenario 2: this is generally the more concerning scenario, when your tenant doesn’t even live in the property and has sub-let the entire house.

Scenario 1:
Upon discovering that your property is being sub-let without your permission, first decide if it’s causing a problem. As said at the beginning of the post, it might not be worth rocking the boat if there are no negative consequences of your tenant sub-letting (e.g. rent is being paid and the property is being kept in good condition). IF that’s the case, talk to your tenant about the situation.

Scenario 2:
In many cases, it’s not such a fairy-tale ending. Many unscrupulous people make a living out of unauthorised sub-letting, and this is when the reality of the situation can be extremely scary.

This is when the OT draws up tenancy agreements for individual rooms and let the rooms out separately to strangers, acting as if they are the real landlord. This can lead to a number of problems. First, the new tenants aren’t aware of who the real landlord is. If there is a problem with the property, illegal sub-letters are unlikely to attend to them, and if they do, the problems aren’t usually resolved to a good standard. Secondly, most unauthorised sub-letting leads to overcrowding- this is because the sub-letter tries to cram in as many tenants as possible to maximize profit. Needless to say, an overcrowded property often leads to damage.

Regardless of whether your situation falls into scenario 1 or 2, you may want the sub-tenant to vacate, in which case you can do the following…

  • Talk to the OT directly to try and resolve the situation- or at least make him aware that the jig is up. The OT may just admit defeat and close up shop;
  • if that fails, the sub-tenants should be spoken to directly to clarify the situation as they may well be unaware of the circumstances themselves. They could be understanding and willingly vacate. However, if you and the sub-tenants are happy for them to remain in the property, cut out the middle man by going through the proper procedures to have the tenancy negated, then draw up a new tenancy for each resident. But under no circumstances should you accept any payment of rent until the matter is sorted.
  • If you’re still adamant on removing the tenant/sub-tenants, enforce the term in your tenancy agreement if there is one, and warn the OT to remove the sub-tenant(s) or you will serve Notice to evict him because he is in breach of contract;
  • If there is no clause, you could say you’re insurer/lender does NOT permit subletting, so the sub-tenant must leave;
  • If that doesn’t work, you could try serving a Section 8 on Ground 12 to your tenant.

Note: never accept payment direct from a sub-tenant as this would be a form of consenting to a new tenancy agreement with them.

How do I evict/repossess a sub-let tenant (even if I’ve never met him, but gave my tenant permission to find the sub-let tenant)?

You don’t, you can’t, only your OT can remove him, but you can remove your OT by going through the Section 21 Possession Process, and when you have legal possession, enforced by a Court Appointed Bailiff, they will remove all occupiers and give you back a vacant property in line with your Court Order.

I’m sub-let friendly, but who’s responsible for the sub-tenant?

The OT is responsible for anything that happens in the property during his tenancy, and that includes anything which he has allowed a sub-tenant to do.

A sub-tenant has no legal relationship with the landlord. However, take care not to create one by accepting rent/deposit from the sub-tenant. If there is any damage the monies can be stopped from the deposit of the OT.

The sub-tenant is a lodger

Remember, if your tenant has a sub-tenant, they are technically your tenant’s lodger, not your tenant- not your anything. They are only your tenant’s lodger. You with me? Wonderful.

That means your tenant’s lodger has ‘lodgers rights’, and is covered by lodger statutory rights. For more information on lodgers, particularly what their rights are, or how to remove them, you may want to visit the excellent lodger site.

Please note, you should always get independent legal advice before taking any action. The content on this website is just for information purposes and is only based on my opinions/experiences. For more information on subletting/lodging, you may want to go over to the Citizen’s advice website.

So, why did you land here? What’s your story? Do you have a good or bad sub-letting experience? Please leave a comment and share it with the world…

14 Join the Conversation...

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N SHAH 18th February, 2017 @ 15:24

My tenant has CLAIMED in court that my managing agent had given him VERBAL consent to sub-let.
NOTE the AST agreement clause prohibits SUBLETTING WITHOUT CONSENT.
If there is no specific reference to 'consent in writing'is the tenant defence strong?

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JrC 7th September, 2017 @ 21:26

My tenants asked to leave their tenancy early due to purchasing their own premises. I agreed (even though they were on a fixed term) on the basis they agreed to any damages and costs and found replacement tenants for which they did. They failed to attend the check out where one or two minor additional damages were discovered and their cleaners failed to adequately clean the property. I agreed for the cleaners to come back where they failed to complete a small amount so done it myself and gave them the bill.
The tenants then refused to agree any further costs for damages and now wish to dispute the validity of some of the damages previously agreed (in writing) and in return have now issued a county court claim against me with added breach of contract allegations i.e. entering the property without permission and making 'sexualised comments' (one instance allegedly taking place 12 months before vacating the property without any hint of communication regarding this so-called occurrence). They also previously advised me that they were having guests staying at the property whilst they were away on holiday and I could not carry out any of the agreed remedial in that timeframe, whilst refusing to provide me with any information on the guests leading to suspicion of sub-letting. I have since contacted an online letting agent that they used for their replacements and established that they had the property advertised for the specific period that they were away and hence the same time that the guests were staying !!
After formally denying these allegations/breaches in my defence document they now say they have witnesses. And also claim that I have entered the property without permission or when permission has been granted, to inspect tenants bedrooms in particular. I have prepared a detailed list of visits to the property along with the permission granted should it be needed and mentioned it in my defence. They have now requested a copy of it which I have refused as the information is a collection of data that they should already have in their possession (they should do their own homework if they want details).
On one occasion towards the end of the tenancy I was wrongly included in on an email from two of the tenants mother making certain claims about 'interruption of quiet enjoyment' and damages. The tenants instantly contacted me (within minutes) and asked me to please ignore whereby they sent a follow-up reply claiming that the contents were untrue and they had no issues with me at all.
I have created a concise set of emails, texts, invoices and dated pictures (all filed chronologically) so have so far been preparing my own defence to their claims (based upon hard evidence) but feel that maybe I should be now seeking legal advice

Any offers of wisdom or experience in this field will be gratefully appreciated as I am conscious that the courts may tend to favour tenants (even though the allegations are false), and how it will be perceived as I am male Landlord and there are three tenants in question who are all female.

In my many years of renting as a landlord I have never experienced anything like this before and simply want to see the back of it all. However, I cannot cave in to such fabrication of events and a clear indication of them wishing to off-set damages by countering with allegations of breach of contract (They have asked for 10% of the entire tenancy sums paid, meaning I interrupted them throughout the entire tenancy).

Help!

Regards,
JrC

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Graham 15th January, 2018 @ 18:44

I got a tenant on a six month tenancy agreement been with me for over 9 months always paid the rent on time keep the house nice
The tenant have ask could she take other person in to help out with the bills
Can anyone advise me on the next steps regarding agreements which I need to do as my tenant don’t wish to have a joint tenant agreement
Thanks Graham

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JP-London 23rd January, 2018 @ 17:25

I'm wondering about the implications of un-authorised subletting on landlord insurance and local council licensing? Even if it is a case of 'all is going fine' - rent paid and house in OK shape.

My council requires a private landlord license. In the application you list every room in the house and what it is for - bedroom, living room, etc.

A recent property visit appears to show the living rooms (which were open plan) have been made into bedrooms (with swinging doors installed without permission to close off between them).

Anyone know the implications?

Thanks

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KEV RENNIE 12th June, 2018 @ 15:44

I have just found my tenant has been sub letting a room in my flat for the last 2 years. He WAS a friend had a contract drew up and was struggling with the rent 6 months ago. I reduced it by £300 a month to help him out. I have just found out after he has vacated the premises even after inspections which he would restrict and advise he wasn't there etc..... what can I do now? as 6 months of rent reduction is £1800, plus the fact he left without paying remainder of his last months rent? can I take him to court? at present I am also pursuing him for theft of 2 dining room chairs which he refuses to return.

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Mr C 21st November, 2018 @ 00:50

Citizens advice have some good info - obviously written form a tenants standpoint. The Article was "what happens if a subtenancy is unlawful".

Notable, my tenant has "sub-let" to an adult daughter on a "lodgings basis", but I saw that the daughter paid teh rent last month. Me thinks a new Lease is required. Happy for he to be there, but they need to become Jointly and severally liable. Bit of a pain as I had a guarantor in place which will also need resigning.

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Nahida Shara 2nd January, 2019 @ 15:52

My tenet is my husband friend he asked to my husband 10 years rent property then after he put my property for 10 years leas before my property is free hold my tenet put my pro arty to 10 years leas then he put sub leas without any document (such as he did provide and any document leas or sub leas without my husband s igniter for another 5 years pleas help me how to remove my sub leas

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Ramesis 22nd July, 2019 @ 12:56

My occupational commercial tenant has sublet in explicit breach of their lease which covers for said breach all legal & other expenses as additional rent. The subleasees are disrespectful of the building and have filled non-rented storage areas with builder's waste. I wish to charge expenses of moving their stuff out of my landlord areas whilst tasking them with ultimate removal. What can I charge?: i. market rent less rent to bonafide commercial occupational tenant ii. moving belongings expenses?

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NHP 15th January, 2020 @ 14:24

I am a landlord to two tenants for the last 6-7 years. They pay rent on time, generally good tenants. They sublet one of the rooms without our knowledge, when we found out, we were generally ok with it, because rent is paid on time. Recently the two tenants have been coming me to with "the shower is not working, or the sublet is saying the oven is not working" who is responsible for the cost of the problems in this situation? My thoughts are; responsibility for the cost of new shower and oven should be share because I am the landlord, but my tenants are subletting. Any thoughts on this matter?

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Vince 10th January, 2021 @ 21:12

We rented from someone that was subletting for 7 years. We were evicted, and now the people that live there now are three doors down from us. The police are abusive because they work in the same building where I have vending machines. Roma ave is the hell!

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Mike 22nd June, 2023 @ 07:44

Hi.
My tenant never even moved into the property, I later found out they run a business sub letting properties to social services and providing care for vulnerable people.
I can’t find home insurance for this anywhere, my original insurer dropped me when they found out.
Does anyone know where sub letting home insurance can be found, buildings insurance?

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Eva 9th July, 2023 @ 09:31

I recently found out that my tenant is subletting my flat on booking.com (maybe other places too) which is a breach of tenancy. He hasn't paid last month rent and he is due to pay 2 months rent in 3 days. Is the only way to get rid of him is to serve him a 4 week notice to quit the property? I don't know if he will pay due rent not to mention the 4 weeks. I don't think he is living in the flat. What can I do?

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AHMED 13th September, 2023 @ 20:00

I have rented a property to tenants for the last two years. For almost 21 Months he had sub-tenants and was making a profit. Now his family is here and he's playing very nasty by calling Gloucester council for the state of House. Which quite rightly his negligence. Yet he's blaming us. And the Gloucester Council Officer is getting very biased and throwing all this on us to repair etc.Its getting very expensive day by day

Any help possible to EVICT

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Nice 25th October, 2023 @ 16:02

I rented a house from Someone who claims to be Landlord, the rent was £2750 monthly, He told me to look for Tenants, I brought two tenants to the house. I discovered the the guy who claims to be landlord was not a landlord after two months. I gave him the house back and the two tenants met him and agree to be paying him and was paying for my room as a tenant. One of the two tenant was asking me if the house HMO and threaten me. Please, what can I do?

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