Subletting is a controversial practice, laden with legal intricacies and potential pitfalls for both landlords and tenants. In this article, we'll review essential terms, legal procedures, and the rights and responsibilities of landlords.
Subletting Basics
Subletting frauds are one of the most common issues landlords need to face while managing their property portfolio.
Subletting can often go unnoticed - especially when landlords fail to perform routine inspections of their rented properties. Yet, there is surprisingly much confusion on what subletting actually means, let alone what can landlords do about it. Let's start from a simple definition.
Subletting occurs when a tenant rents out part or all their living space to another person, known as the subtenant.
Obviously, subletting can be very appealing for tenants in search of an extra source of money. Hence, also fueled by the steady increase in rents, its popularity has only grown over the years.
For landlords trying to protect their properties against such frauds, masterfully navigating the legal framework around subletting is key.
First, two main elements need careful consideration.
Terms of the Tenancy
When dealing with illicit subletting, reviewing the terms of the tenancy agreement is the first line of defence.
Some agreements explicitly prohibit subletting without the landlord's consent. In these cases, violating such a clause can result in serious consequences for tenants, including eviction.
The Notice Period
One of the most crucial components of the tenancy agreement is the definition of the notice period.
For tenants, this is the time required to inform their landlord before making any changes to the occupancy status. Failing to adhere to the notice period can easily lead to legal repercussions against tenants.
Different Types of Tenancies
When dealing with subletting, knowing the terms of tenancy and the notice period stipulated is not enough.
Landlords need to be well aware of the types of tenancy they are dealing with, as this will impact their freedom of agency against subletting.
Assured Shorthold Tenancies (ASTs)
The majority of residential tenancies in the UK fall under the category of Assured Shorthold Tenancies (ASTs). These tenancies typically have a fixed term, during which the tenant has the right to live in the property.
ASTs come with specific terms outlined in the tenancy agreement. These terms specify the rights and responsibilities of both landlords and tenants. Tenancies with a fixed term offer stability for both landlords and tenants.
During this period, tenants can sublet only respecting the terms of the tenancy agreement.
Similarly, landlords can only issue eviction notices for specific reasons.
Periodic Tenancies
When the fixed term ends, tenancies may become periodic, continuing on a month-to-month basis.
In such cases - If they deem it necessary -landlords can issue a Section 21 notice to regain possession of the property.
But the notice period must be at least two months, providing tenants with sufficient time to find an alternative.
Legal Notices Available to Landlords
The Section 21 Notice
The Section 21 notice typically marks the beginning of the eviction process. Landlords can issue a Section 21 notice to regain possession of their property.
Beyond the fixed term of the tenancy, landlords can issue this notice without providing a reason.
Although, as mentioned, they still need to respect the proper procedures and timelines.
The Section 8 Notice
Despite its limitations, Section 21 is a measure widely used by managers of property portfolios.
Yet, there is something more effective landlords can do while dealing with illicit sublets. If a tenant sublets without the landlord's consent, they risk breaching the terms of the tenancy agreement.
In such cases, the landlord may choose to serve a Section 8 notice.
The Section 8 notice specifies the grounds for eviction, including illicit subletting. The Section 8 minimum notice period can be as short as 14 days, depending on the grounds for eviction.
Risks of Illegally Evicting
Attempting to evict a subtenant without following the proper legal procedures is illegal. Landlords must apply to the court for a possession order and, if necessary, a warrant for eviction.
Illegally evicting a tenant can lead to severe penalties for landlords. Even if the tenant is breaching the tenancy agreement, illegal evictions are not a viable solution for landlords.
Challenges and Legal Implications of Subletting
Antisocial Behaviour
Subletting may sometimes lead to issues such as antisocial behaviour amongst subtenants. Landlords have the right to address such concerns by issuing a Section 8 notice as a precursor to eviction.
Antisocial behaviour can include:
- playing too loud music, TV or making noisy parties
- leaving rubbish outside the property
- engaging in molest drunken behaviour
- harassing people, violently or not
- using the property for illegal purposes (e.g. drugs dealing)
Dealing with Rent Arrears
Another risk associated with subletting - able to motivate a Section 8 notice - are rent arrears.
Subletting or not, it's still tenants' responsibility to regularly provide rent to landlords.
Yet, subletting can complicate the relationship between tenants and landlords, making it more difficult to collect rent.
In such cases, landlords can issue a Section 8 notice when tenants owe at least 2 months of rent.
House in Multiple Occupations (HMO)
Last but not least, your property category can change to a HMO if it hosts too many people.
Owners of HMOs - houses with multiple occupations - can face severe penalties for not complying with the relevant regulations.
These include provisions on licensing and room size.
Subletting and Smart Property Protection
There's no doubt: illicit subletting is a complex issue that can heavily impact landlords' financial stability.
To offset these risks, landlords should focus on effective management property portfolios, adopting best practices to streamline property management.
Keeping accurate records
Maintaining meticulous records of tenancy agreements, communications, and financial transactions is essential.
A well-organised documentation system facilitates efficient communication and dispute resolution.
Regular property inspections enable landlords to address maintenance issues promptly and ensure compliance with safety regulations.
Regularly monitoring properties
Inadequate monitoring of rental properties can expose landlords to various fraudulent activities, including subletting and property fraud.
Without regular property inspections and oversight, tenants may take advantage of lax supervision.
Additionally, stopping by once in a while can foster clear communication with tenants.
A positive landlord-tenant relationship is useful to address concerns before they escalate.
Checking for changes in laws and regulations
Staying abreast of changes in housing laws and regulations is crucial to avoiding legal pitfalls.
The UK rental market is a dynamic environment where things do not usually stay the same for too long.
To avoid legal pitfalls, an informed approach to property management is key to building a resilient and successful portfolio.
Subscribing to Title Guardian
Title Guardian offers landlords and homeowners the ideal digital tools to monitor and safeguard their properties. Thanks to our top-of-the-notch digital monitoring systems, it is possible to prevent any potentially fraudulent activities.
Identity theft, illicit subletting, property fraud: we stop miscreants in their tracks by timely alerting property owners.
Itching to know more about Title Guardian's smart property protection?
Explore our services and membership plans.
Peace of mind has never been easier to achieve.
