For landlords, renting out an apartment is usually a smooth process until it’s time for some tenants to move out. In certain cases, however, some tenants decide to act smart and lease the apartment to a different person without notifying the landlord. In some cases, the tenants may even charge higher than the actual rent, thus illegally earning on the rental property.
Subletting is illegal and heavily frowned upon. Apart from the landlord risking earnings on the rental property, there’s also a risk of having illegal squatters on the rental property. The average landlord knows how difficult it is to evict illegal squatters, so quickly dealing with illegal subletting is a must.
This guide will cover the following:
How to recognise when your property is being sublet without your consent.
Understanding the potential legal consequences for tenants involved in illegal subletting.
Steps to take when you discover unauthorised subletting.
Best practices to prevent illegal subletting in the future.
What Is Illegal Subletting?
Illegal subletting occurs when a legal tenant rents out a rental property or a portion of it to a third party without obtaining the landlord's explicit consent. Regardless of the relationship between the tenant and the third party, this act is considered illegal if the landlord's approval hasn’t been secured. Even if only a part of the property is sublet, it still qualifies as illegal subletting due to the absence of a formal contract between the landlord and the third party. This lack of a direct agreement means that the third party is benefiting from the property without the landlord’s authorisation.
Illegal subletting can occur in various ways, both online and offline. For example, tenants might list the property on platforms like Airbnb, Booking.com, Expedia, or Sublet through personal connections. If a tenant rents out part or all of the rental property to others on such platforms without the landlord's express consent, it is considered illegal. Note that it’s not enough to simply inform the landlord of a desire to sublet. The landlord must expressly consent to the subletting. In fact, the extent of subletting has to be expressly communicated. For instance, if the landlord permits subletting only a portion of the property but the tenant sublets more than what was agreed upon, it still constitutes illegal subletting.
Legal Implications of Illegal Subletting
Illegal subletting comes with legal consequences. These include:
Breach of Tenancy Agreement: Tenancy agreements are strictly between the landlord and the tenant. While a tenant may have friends and families over, third parties are legally prohibited from taking over a rental property. As such, one of the vital terms of a tenancy agreement is that subletting is not allowed unless with the landlord’s consent.
So, when a tenant allows third parties to take over any part of the rental property without the landlord's consent, it amounts to a breach of the tenancy agreement. When this happens, the landlord has the right to evict both the tenant and the illegal sub-lessee.
Liability for Damages: Besides the risk of eviction, illegal subletting can result in property damage or financial loss for landlords. When a tenant sublets without permission and is found to be charging the sub-lessee higher rent than the original agreement, the landlord has the right to take legal action to recover all the extra rent collected. The tenant will also be liable for repairs of damages to the rental property caused by the illegal sub-lessee.
Potential Legal Action: Landlords can pursue eviction, sue for damages, or even file a trespass claim against the tenant and the illegal sub-lessee. Typically, this process begins with serving a notice of breach of the tenancy agreement, notifying the tenant of the landlord's intent to reclaim the property through legal channels. This approach helps to formally address the violation and take steps to recover the rental property efficiently.
How to Identify Illegal Subletting
Illegal subletting can be costly for landlords, so it's important to spot the warning signs early. If landlords fail to act promptly, tenants and illegal sub-lessees might later argue that the landlord implicitly consented to the arrangement by not intervening. As such, landlords need to keep an eye out for signs of illegal subletting. It could be a matter of periodically checking on the rental property or even observing the tenant’s body language. Here are key signs to watch for:
Multiple occupants on the rental property
While having friends and families over isn’t bad, it might be suspicious when you notice multiple occupants on the rental property. While having guests is normal, a noticeable pattern of people staying long-term suggests unauthorised occupants.
Tenants avoiding talks
Tenants are by law entitled to their privacy. However, that doesn’t mean that they should snub or avoid discussions with landlords. Certain conversations like maintenance, living arrangements, security, rent, and bills are usually recurrent. Hence, when a tenant frequently evades these talks, for instance, living arrangements, especially about co-occupants and visitors, it’s enough to raise suspicion of illegal subletting.
Unfamiliar faces and installations
Tenants are permitted to make installations on a rental property for their convenience. However, it is best practice to inform the landlord ahead, especially concerning major installations. Noticing unfamiliar faces frequenting the rental premises or newer installations might indicate something’s off. There’s no harm in asking questions.
Monitor the property
Just as the tenant has the right to privacy, the landlord reserves the right to periodically inspect the property. These rights are usually outlined in the tenancy agreement. When running periodic checks on the property, that’s a good time to keep an eye out for unauthorised occupants. Beside the regular checks, there’s no harm in asking questions and inspecting the property when you feel something’s off.
Monitor online listings
Regularly check rental platforms like Airbnb to ensure your property isn't being listed without your consent. Sign up and browse listings in your property's area to spot potential unauthorised subletting.
Steps for Handling Illegal Subletting
Dealing with illegal subletting can be challenging, but addressing it promptly and correctly is crucial. Here’s a clear, step-by-step guide on how to handle the situation effectively:
Review the Tenancy Agreement: Re-reading your tenancy agreement is the first step. You need to ensure that the tenancy agreement clearly prohibits or restricts subletting. If the clause is explicitly stated, it strengthens your case if legal action is needed.
Speak to the Tenant: Your suspicion requires confirmation, and there’s no better way to get this than to speak with your tenant. Ask about the living arrangements and give them an opportunity to address the situation. This direct approach can sometimes resolve the issue quietly, and the tenant may be willing to apologise, adjust the rent, or agree to a revised tenancy agreement.
Issue a Warning: If your tenant is stubborn and unwilling to resolve the issue quietly, act by issuing a formal warning. Your warning should outline the breach of the tenancy agreement and the potential consequence of a lawsuit. It should also extend to the illegal occupant.
Serve a Section 8 Notice: If the tenant refuses to rectify the situation, proceed by serving a Section 8 Notice under the Housing Act 1988. This is a formal legal notice indicating your intent to regain possession of the property due to the tenant's breach of the tenancy agreement.
If you decide to do this, you must cite Ground 12, Part II, Schedule 2 of the Housing Act, which allows eviction based on breaches other than rent arrears, such as illegal subletting. The court hearing typically takes place two weeks after the tenant has been served.
Seek Legal Advice: It’s essential to consult a lawyer with expertise in property law to guide you through the eviction process. This ensures you comply with legal requirements and avoid pitfalls that could jeopardise the eviction or even allow the tenant to claim compensation.
Preventing Illegal Subletting in the Future
Most times, illegal subletting persists due to unclear tenancy terms, and the lack of diligence from the landlord. Here’s how you can prevent it from happening in the future:
Include Clear Subletting Clauses: By inserting clear terms that prohibit or restrict subletting, you’d save yourself a lot of trouble. Most tenants who engage in illegal subletting do so because there are no clauses restricting them. To avoid this silly excuse, ensure that all tenancy agreements are re-drafted to specify whether subletting is allowed and under what conditions.
Require Written Permission: If you don’t mind subletting, ensure that your tenancy agreement also states the extent of permissible subletting. You can add a clause requiring tenants to seek written permission from you before subletting any part of the property. This way, you can maintain control on the property and the type of people allowed as sub-lessee.
Conduct Regular Inspections: Illegal subletting happens when the landlord isn’t watchful. You need to conduct regular inspections on the property. To avoid privacy concerns, notify your tenants ahead of your inspection dates.
Challenges for Landlords
Detecting illegal subletting can be quite daunting, especially if you own multiple properties, or have several tenants. What’s worse is that tenants can act smart by keeping off illegal occupants on inspection dates, which makes it hard to pin a claim of illegal subletting.
When subletting happens, civil discussions often turn into disputes especially when tenants are confidently ignorant.
Best Practices for Landlords
To manage the challenges associated with illegal subletting, landlords can adopt the following best practices:
Maintain Open Communication: It’s often easier to address subletting concerns before they escalate into disputes. Asking questions without sounding accusatory helps with de-escalation. If your tenancy agreement doesn’t spell any prohibition, gently pursue a win-win compromise on subletting.
Ensure Legal Compliance: It’s crucial to follow legal procedures strictly when dealing with subletting issues or pursuing eviction. Familiarise yourself with eviction laws to avoid unnecessary complications, ensuring you serve the correct notices and give tenants adequate time to rectify any breaches before taking further action.
Use a Property Management Company: To avoid the headaches of eviction and illegal subletting, you should consider outsourcing the responsibility to a lawyer or a property management company. By nature, property management companies help manage properties, including subletting concerns.
Legal and Regulatory Considerations
For landlord-tenant relationships, following the law cannot be overemphasised. Some of the UK tenancy laws you need to stay up-to-date on include:
The Landlord-Tenants Act 1985
The Housing Act 1988
Home (Fitness for Human Habitation) Act 2018
Renters Reform Bill
These laws are designed to promote fairness in landlord-tenant interactions. Eviction cannot be done without reason, and tenants must be given time to remedy their wrongs. In the case of illegal subletting for instance, a tenant needs to be given two weeks after being served the section 8 notice. This way, they can either evict the illegal occupant by themselves or seek alternative resolution with the landlord.
During the hearing, the strength of the landlord’s claim is based on the evidence provided. As such, it’s important for the landlord to document all findings on illegal subletting. It would even help to show the court your attempts at peaceful resolution.
FAQs
What constitutes illegal subletting?
Any act of a tenant renting out a part or the whole rental property to a third party without the landlord’s consent is illegal subletting.
How can I tell if my tenant is subletting without permission?
You can tell by the tenant’s evasive actions, and also the unfamiliar faces occupying the rental property.
Can I evict a tenant for illegal subletting?
Yes, illegal subletting is a ground for eviction according to Ground 12 of Schedule 2 of the Housing Act 1988.
What should be included in a tenancy agreement to prevent subletting?
Clear terms prohibiting or restricting subletting must be included in a tenancy agreement. A clause demanding the landlord’s written consent helps too.
How can landlords legally address illegal subletting?
Landlords can legally address illegal subletting by filing a complaint in court and serving a section 8 notice to erring tenants.
Conclusion
Illegal subletting can be costly for landlords, but staying vigilant and proactive can help prevent it. Regular inspections, alertness to evasive tenant behaviour, and watching for unfamiliar faces can help you quickly identify and address illegal subletting. If you suspect unauthorised subletting, act swiftly by reviewing the tenancy agreement, issuing a formal warning, and pursuing legal action if necessary.
For expert guidance, it’s always wise to consult property law professionals. At Lawhive, our property law experts are ready to assist you in drafting a strong tenancy agreement, handling subletting disputes, and providing professional advice to resolve illegal subletting issues effectively. Book a free legal assessment today.