The advent of digital marketplaces has streamlined property transactions. Yet the diffusion of rental property laundering poses significant risks to landlords and tenants alike. Platforms like Gumtree and Airbnb, play a key role, lacking the necessary checks and balances to prevent illicit subletting.
The UK rental market is a dynamic and flourishing industry with fairly impressive volumes.
Indeed, more than one third of British households are renters, and the rental market value has tripled overall in the last 20 years.
Money-wise, this figure amounts to a staggering volume of 89 billion pounds in rental costs paid by tenants during 2022. A hefty sum to say the least.
While there's no shortage of demand, landlords and tenants have been dealing with new ways to offer and find properties to rent.
In particular, digital marketplaces have gradually emerged as the dominant channels of interaction in the last few years.
Platforms such as Gumtree and Airbnb connect a vast audience of renters and tenants, and their numbers are constantly rising. The advantages for property rental are as simple as substantial.
To mention a few, digital markets:
- Are extremely easy to use
- Do not charge excessive fees
- Are popular with both landlords and tenants
- Can be used anytime, anywhere
While offering many advantages to landlords and tenants, digital marketplaces also expose them to some, less evident risks.
After all, we all know the ups and downs of the internet. In fact, several cases have shown how small mistakes can lead to heavy losses in online rental agreements.
Deciding where to rent a property is not a trivial decision. Staying informed and vigilant is always important, especially when using new platforms.
To clear all doubts, let's now review the hidden drawbacks of using digital marketplaces to see if they are truly worth their salt.
Poor Audit Processes for Tenants
As a renter scouting these platforms, a fundamental question you should always ask yourself is:
Who am I talking to?
While digital marketplaces offer great convenience, their lack of stringent verification processes is a huge red flag.
In a time when property fraud and identity theft are a rising concern for British landlords and homeowners, the absence of rigorous checks create an open invitation for fraudsters to thrive.
For this reason, navigating the digital marketplace domain, there some are essential steps to safeguard our interests:
- Thorough Vetting: Always conduct comprehensive background checks on potential tenants, verifying their identities, employment, and rental history.
- Regular Inspections: Schedule periodic property inspections to ensure tenants adhere to the tenancy agreement terms.
- Clear Communication: Maintain open communication channels with tenants to promptly address any concerns.
Failing to perform such background checks can expose them to rental frauds such as rental property laundering and subletting. In these cases, prevention is invaluable: as the saying goes, better to be safe than sorry.
Subletting and Rental Property Laundering: What to Know
The term rental property laundering might sound unfamiliar, but its implications are severe and far-reaching.
In simple terms, it refers to the illicit practice of subletting properties without the necessary authorisation or adherence to legal protocols. Moreover, this is especially applicable for landlords with a diverse property portfolio (revise here property management best practices). Subletting spells trouble.
So, is subletting illegal?
The short answer is yes, even if it's not always easy - or possible - to prove.
This clandestine activity undermines the rights and safety of tenants and places unsuspecting landlords in perilous situations.
- Property owners caught up in such schemes see insurance policies nullified and breached mortgage terms.
- Tenants unknowingly involved in these sublets can face eviction or serious legal consequences for not respecting tenancy agreements.
While protecting our personal data is always challenging, consequences of this lack of governance can be dire for unprepared renters entering online marketplace carefree.
Sublets: What Landlords can Do
Do you already suspect your tenants are subletting behind your back?
Let's see which steps are possible to take, ranging from friendly approaches to residential eviction.
Know your Tenancy Agreement
Understanding the terms and clauses within the tenancy agreement is essential. If it explicitly prohibits subletting without permission, it provides a strong basis for addressing the issue.
At the same time, as in case of fixed-term tenancy agreements, might be working in favour of tenants. Either way, it is better to know beforehand.
Gather Sufficient Evidence
Documentation and evidence are crucial in proving that unauthorised subletting is taking place. Photos, communication records, and any other evidence can support your case.
Although this activity can be time-consuming, it serves the dual purpose of justifying your doubts and cornering fraudsters.
Talk with your tenants
Resolving the matter amicably is not always out of the question.
Naturally, it's more difficult to have a good relationship with tenants found via online marketplaces. You barely know them after all, and trust can rapidly grow thin at the first signs of ill intentions.
Yet, reminding them of the agreement terms and discussing the issue could lead to a resolution without legal intervention.
However, it's better to be cautious with sub-tenants. In particular, it's advisable not to accept rent from subtenants directly, without completing the necessary legal processes.
Legal Action and Residential Eviction
If all attempts at resolution fail, resorting to legal means might become necessary.
This usually means evicting your tenants, losing a source of both money and - in such cases - problems.
In case the tenancy agreement has an anti-subletting clause, your tenants will have to abide by it. If they don't, this will usually constitute proper legal grounds for eviction.
All things considered, including potential resistance and the beginning of legal disputes, evicting should always be your last resort.
Preventing Sublets with Title Guardian
Navigating digital marketplaces risk-free is quite a difficult feat for renters and landlords. Fake tenants, rental property laundering, and several other frauds can take place at any given time.
Yet, we are not facing an unchangeable scenario.
Employing an innovative digital vigilance system, Title Guardian can monitor any number of properties 24/7, without effort.
After registering, any suspicious activity around one or more properties is promptly notified to renters.
Explore our resources to know more on how to subscribe and prevent dangers.
