There has been much talk in the media recently about subletting. In not-so-far-away Bristol the issue is somewhat on the increase and is bringing lettings agents into disrepute too*. Whether you are a landlord who has their property managed or you are managing your property/properties yourself, it can sometimes be difficult to get a picture of who is actually living in your rental property. There is legislation, such as Right to Rent, not only to protect tenants but to protect landlords as to who is living in their property, but the individuals who are checked and who you hand the keys over to aren’t necessarily the tenants who move into the property. Of course, subletting is quite normal, and many landlords actually permit it; permission being the operative word. It does sound like a bit of a minefield, but it doesn’t have to be. With a rise of unpermitted subletting in the South West, I thought this was a good opportunity to explore subletting.
What is subletting?
When a tenant makes an agreement to accept rent from a person who is not part of the original tenancy agreement, this is subletting. The sub-tenant has no legal relationship with the landlord but is contributing to the rent. Only the official tenant, named on the tenancy agreement, has any tenants rights and the landlord only has legal obligations to the official tenant(s).
Why do official tenants sublet?
Most of the time it simply comes down to economics. If their financial circumstances change, for example a couple split up and one moves out, then subletting might mean the remaining tenant can afford to keep living in their home.
How can I prevent my tenant(s) subletting?
If you really are against the idea of people living in the property who aren’t named on the tenancy agreement, then there some precautions you can take:
- Put a clause in your tenancy agreement which forbids subletting. If your tenant(s) ignore this, and you can provide evidence that individuals not named on the tenancy agreement are living at your rental property, then you have grounds to serve notice under Section 8.
- Carry out thorough reference checking. There are the legislative ones which we have covered on the blog before; Right to Rent checks, credit referencing, and previous letting checks, but you could go one step further and take up a personal reference from an employer or previous landlord which might give more detail about the individual’s credibility and reliability.
- Carry out regular property inspections or have your letting agent carry out regularly. By regularly, I’m talking every 3 – 6 months. Be observant; if you are letting a property to a couple, is there any evidence of anyone else living at the property. How many beds are being slept in? How many towels are hanging up in the bathroom? There are lots of tell-tale signs you can look out for without the sub-tenant physically being present.
- Make friends with occupants of properties neighbouring your rental property. There are plenty of curious and observant people out there who notice the comings and goings of others. Ensure they have your contact number in case they have anything to update you about. However, this piece advice does come with a warning; do not go as far as having neighbours snoop on your tenants and risk breaking down the trust in the relationship with your tenants. This could affect many aspects of your landlord-tenant relationship which could affect how well your tenants treat your property, whether they continue to pay rent on time; things which you wouldn’t want take a risk with, which leads me onto my last piece of advice…
- Develop a good relationship with your tenants. In a way, it’s very similar to parenting; if your tenants feel they can trust you, they are more likely to come to you and explain when they are struggling with the rent or bills and enquire to you about subletting. This is a much better way for you to ensure you continue to receive regular rental payments.
What if I discover my tenant is subletting but I don’t want to lose my tenant?
Changing tenancies is costly for landlords. New inventories, reference checks, letting agent fees; it all mounts up. So, if there has been a change in your tenants circumstances and you find they are subletting, the best option is to suggest the sub-tenant is referenced correctly and a new tenancy agreement drawn up. If the sub-tenant is worried about how much they will be able to achieve when credit checked, in terms of covering the rent, you could split the rent proportion that s/he is accountable for. For example, if the current rent is £600 per month but the sub-tenant can only achieve credit referencing of £250 per month, then the original tenant could be referenced again to cover £350 per month and your rent would then still be guaranteed each month, if you want to proceed with rental protection insurance.
So, as you can see, where there is a will there’s a way. If you discover your tenant is subletting, there are ways to resolve the matter without losing your tenant. As we always say on the blog, COMMUNICATION IS KEY!
If you’re a Landlord currently looking to let your rental property, please don’t hesitate to contact us 01452 310999, email us at gloucester@surepropertygroup.com or call into our offices in Worcester Street, Gloucester, to discuss your needs further.
I look forward to hearing from you.
Best wishes,
Jemma Carenza
Director
Sure Sales & Lettings
*https://www.bristolpost.co.uk/news/bristol-news/sub-letting-secret-recording-rent-2852896