Subletting occurs when a tenant lets out part or all of the property to someone else, who then becomes a subtenant.
The tenant requires permission from the landlord to sublet and this should be made clear in the tenancy agreement.
Read on to find out more about subletting and the action landlords can take if tenants are subletting against the landlord’s wishes.
What is subletting?
There are several reasons why a tenant might want to sublet. The most common is money. Tenants may need to move home quickly, and can’t afford to pay the rent on two properties simultaneously.
Instead of trying to end the tenancy prematurely, they can sublet the property and use their subtenant’s rent to pay their own rent.
If the landlord has made clear in the tenancy agreement that subletting is only permitted with their written agreement, then subletting in this manner is breaching the agreement. Landlords must be clear about what subletting is. It means the subtenant gets exclusive access to all or part of the property.
If the tenant moves in a friend or partner temporarily and is not charging them for it, then that is not subletting. And if the tenant takes in a lodger that is not subletting either. A lodger, under a license agreement, has the right to occupy a room, not the exclusive possession of it.
In cases of doing a friend a favour or deciding to take in a lodger, the tenant should let the landlord know. Keeping lines of communication open is always good for a tenant-landlord relationship, and it will clear up any misunderstanding before anything escalates.
Is subletting legal?
This all depends on whether subletting is written into the tenancy agreement. The options are as follows:
In rare cases, a tenancy agreement will explicitly say that a tenant can sublet without first referring to the landlord. We wouldn’t recommend putting this in your contract, as it limits your ability to decide who lives in your property.
If this clause is in your contract, however, then the tenant can simply go ahead and sublet your property. It is more likely a clause in the agreement will state that if the tenant wishes to sublet, they must first seek the written approval of the landlord, which should not be unreasonably withheld.
If the landlord refuses, then that should be the end of the matter. Or if the agreement makes no mention of subletting, the tenant should still seek approval.
Most landlords will include a clause in the tenancy agreement forbidding subletting. After all, there is nothing for the landlord to gain by permitting tenants to sublet without permission: the tenant gets the income from the subtenant, yet the landlord has unknown and unreferenced people living in the property, increasing the chances of things going wrong. If a tenancy expressly forbids subletting, then the tenant is in breach of the agreement if they go ahead anyway.
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What if a tenant asks for permission to sublet?
If your tenancy agreement forbids subletting or requires you to be asked, then you can simply say no. There might be a scenario, however, where you are open to the idea. Weigh up the pros and cons of agreeing to their request.
A significant plus might be that your property remains on a long-term let with a trustworthy tenant, guaranteeing your cash flow. If you turn the tenant down, they might decide to leave at the end of their agreement.
If you decide to permit the tenant to sublet, check that your Rent Guarantee Insurance, or landlord property insurance covers subletting, so that you do not invalidate the policy and get any nasty surprises. You should also check subletting is allowed under the terms of any mortgage you have on the property.
If your tenancy forbids subletting, but you decide to agree to a tenant’s request, then you can either make a written agreement that permits the specific subtenant to sublet the property, or you can issue a new tenancy agreement to the original tenant which permits subletting.
If you are doing either of these, however, you may want to consider whether it is worth simply ending your old tenancy with the original tenant, and beginning a new tenancy with the new subtenant (who, in this scenario, would become a regular tenant). If the original tenant does not intend to reside in the property again in future, then this will probably be preferable for all parties.
If you decide to condone a sublet, be sure to have the new tenant referenced and schedule in visits to the property to make sure everything is proceeding as you envisaged.
My tenant is subletting without permission – what can I do?
If your tenant is subletting the property without your consent, and you have decided it doesn’t make sense to allow it to continue, then you have a few options.
Demand the subletting ends
If the tenant is subletting without permission, then the tenant is breaching their tenancy agreement. The landlord is perfectly within their rights to demand an end to the subletting. If the tenant persists, then the landlord can take the next course of action.
Communicate with the subtenant
It is possible that the subtenant doesn’t realise they are letting from the tenant, and not the property owner (or leaseholder if you have the property on a lease).
It is sensible to try and contact the subtenant to make sure they understand they are in the property without your permission, that the tenant is not the owner of the property, and that if the tenant is successfully evicted, the subtenant will have to leave.
With a tenant making a clear breach of the tenancy agreement and refusing to make it right, then a landlord can begin possession proceedings to evict.
This can happen fast, with the landlord serving written notice seeking possession of the property with a Section 8 Notice, which will fall under the discretionary Ground 12 of the Housing Act 1988, as amended by the Housing Act 1996.
When the notice expires, and assuming the tenant has still not moved out, landlords can apply to the court for a possession order.
Communication with tenants is key
Acting within the letter of the law, and in certain cases, landlords will have no choice but to evict a tenant who is subletting without permission.
As with all matters relating to the landlord-tenant relationship, keeping open and honest lines of communication is vital.
In this way, the tenant knows where they stand and will more likely accept it when a landlord refuses permission for them to sublet.
It’s always best, however, that the landlord seeks legal advice to ensure they are following the letter of the law. OpenRent partners with Landlord Action, the eviction and housing law specialist, which offers legal support to landlords throughout the course of a tenancy.