Over the last couple of years, the problem of unauthorised subletting has been growing. From last year alone, our instructions relating to unauthorised subletting have increased by around 15%.
An unauthorised sublet is when a tenant re-lets a property to another tenant without the prior permission of the landlord. It can affect all types of landlords. However, overseas landlords and HMO landlords are particularly vulnerable.
Unauthorised subletters will take out a tenancy in the normal fashion, and then, after they have moved into the property and ‘have the real landlord off their back’, will sublet to multiple occupants. Often, they appear to the real landlord as respectable tenants who intend to live in your property for years.
The unauthorised subletter will usually draw up tenancy agreements for individual rooms and let the rooms out separately – as if they were the real landlord. In other cases, illegal subletters have let out rooms on a nightly basis.
This leads to a number of issues. First, the end-tenant isn’t aware of who the real landlord is. If there is a problem with the property, illegal subletters don’t usually get involved with proper management – after all, their focus is on making a quick buck.
Second, many unauthorised sublets are, in effect, a HMO. If the landlord never intended the property to be a HMO, required licenses may not have been obtained. Although many landlords see these types of licenses as needless red-tape, they do offer an added level of protection to the tenant, e.g., fire safety regulations.
Further, the tenant’s deposit will most likely be pocketed by the unauthorised subletter, meaning that it is not protected by a government scheme. It is most likely that the tenant will end up losing their deposit in this scenario.
Inevitably, illegal subletting leads to issues of overcrowding. Needless to say, an overcrowded property is not good for the tenant. But also, it isn’t good for the landlord either since overcrowded properties often lead to damage to the property.
CASE STUDY: Rose Chimuka
We exposed Rose Chimuka, a serial illegal subletter, on BBC Inside Out last year. Once she gets into the property, she changes the locks and divides the house up into rooms to sublets. She collects the rent and, obviously, does not pass it over to the landlord. She has done this at least 5 times according to some sources.
The landlord who instructed us to remove Chimuka ended up losing £15,000 on legal fees and restoration costs. However, another landlord in South London wasn’t so fortunate – he was owed nearly £36,000 in rent, and had around £50,000 damage to his property.
So, what should landlords do to counter the threat of illegal subletting?
A lot of it goes back to doing the basics properly (we will be talking about tenant referencing in the coming weeks). In addition, ensuring you have good relationships with neighbours is essential, since they will tell you if a lot of people are staying at the property.
There is no substitute for proper tenant referencing, previous landlord’s reference and having sight of a previous tenancy agreement either. Whilst not every professional bad tenant will get flagged, it does ensure that the vast majority of them are off your radar.
If landlords do suspect unauthorised subletting is happening in the property, the sub-tenants should be spoken to directly to clarify the situation as they may well be unaware of the circumstances themselves. But remember, a landlord should never accept payment direct from a sub-tenant as this would be a form of consenting to a new tenancy agreement with them.
If the end tenant is happy to remain in the property (and so is the landlord), cut out the middle man by going through the proper procedures to have the tenancy negated, then draw up a new tenancy for each resident. Under no circumstances should they accept any payment of rent until the matter is sorted.