A Tenant’s Right to Sublet: Key Provisions from the Housing Act 1988

A Tenant’s Right to Sublet: Key Provisions from the Housing Act 1988

10:01 AM, 23rd September 2024, About 2 months ago 30

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It’s every landlords worst nightmare, you do a property inspection or your trade arrives and low and behold the person living in the property is NOT the tenant.

Subletting is not an uncommon practice and can be a legally complex issue, particularly when it comes to the rights and responsibilities of both the original tenant, the occupant and the landlord.

Understanding Subletting and Its Legal Implications

Subletting involves the tenant (or “head tenant”) renting out the property or part of it to another individual, known as the subtenant. The original tenant remains legally responsible for fulfilling the terms of the tenancy agreement with the landlord, even if they are not residing at the property themselves.

In many cases the head tenant will issue the subtenant with an AST meaning the head tenant becomes the subtenants immediate legal landlord and therefore will be responsible for all the things a landlord is responsible for such as, Right to rent checks, providing compliance documents, protecting deposit etc…. – “have I lost you yet? No!, good”

Subletting is NOT illegal

It is a common misconception that subletting is illegal or prohibited as such this is a standard clause in most ASTs, many believe a tenant must get the landlords permission to sublet or risk losing their tenancy.

This is not the case, subletting under a fixed term tenancy is not illegal, but it may require the landlords consent to do so

In contrast, it is illegal for a council or housing association tenant to sublet their rental property without consent, this can result in a criminal conviction and any rent received by the head tenant being recovered

Key Provisions of the Housing Act 1988 on Subletting

The Housing Act 1988 is one of the key pieces of legislation that governs private tenancies in the England, including matters related to subletting.

It is not illegal or prohibited for a tenant to sublet when they have an active fixed term tenancy and any clause in an AST that states otherwise could be deemed unenforceable as contracts cannot override statute law.

 Section 15 of the Housing Act 1988

This states that there is an implied term in statutory periodic tenancies ONLY that a tenant cannot sublet without the landlords consent, However, this implied term is not of effect in fixed term or contractual periodic tenancies.

For clarity – Statutory vs Contractual

In short a contractual periodic is one that arises at the end of the fixed term tenancy when the fixed term had a ‘continuation clause’ which reads something like “ This tenancy shall continue on the same terms month by month thereafter”

A statutory periodic is created when the fixed term ends and their was not continuation clause or the fixed term made it clear the periodic would be statutory.

If a tenant on a statutory periodic tenancy proceeds to sublet without permission, the landlord may seek possession of the property on the grounds that the tenant has breached the terms of the tenancy, potentially leading to eviction proceedings. This would be done via section 8 ground 12, the downside here is that ground 12 is discretionary meaning it would be up to the judge to decide if eviction was reasonable.

Common Subletting Risks

Subletting can introduce risks for landlords, such as:

  • Damage: Subtenants may not care for the property as the original tenant would.
  • Overcrowding: Multiple subtenants may live in the property, breaching occupancy limits.
  • No rent payment: The head tenant stops paying rent and the landlord is unable to recover rent arrears from the occupant
  • Unable to evict: If a subtenant has been given an AST by the head tenant, a landlord would struggle to evict the occupant using section 21 or section 8, they would not actually be the occupants immediate landlord entitled to possession
  • Legal complications: If issues arise, landlords may struggle to deal directly with subtenants, as their legal relationship is only with the original tenant.
  • Insurance issues: Unapproved subletting can violate insurance policies, leading to denied claims if something goes wrong.
  • Inheriting the occupant: if the head tenant leaves but sublets, the landlord may find themselves having to take over the existing tenancy and the unknown occupants. This creates risk if the head tenant acting as immediate landlord has not complied with the required compliances which may render a section 21 invalid

How Landlords Can Prevent Subletting

To prevent subletting, landlords should take the following steps:

  1. Include a No-Subletting Clause: Ensure the tenancy agreement clearly prohibits subletting without written consent from the landlord.
  2. Regularly inspect the property: Regular inspections and communications can help you monitor quickly any changes in the occupancy
  3. Tenant Screening: Conduct thorough background checks to reduce the risk of tenants likely to sublet without permission.
  4. Communication: Foster open communication with tenants, making it clear that subletting without consent is a breach of contract.
  5. Enforcement: If unauthorised subletting occurs, landlords can seek a Section 8 notice under the Housing Act, using Ground 12 for breach of tenancy terms

By understanding their legal rights and taking proactive measures, landlords can effectively manage and prevent unauthorised subletting, safeguarding their properties and tenancy agreements.


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DPT

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11:59 AM, 8th October 2024, About 2 months ago

Reply to the comment left by Michael Crofts at 06/10/2024 - 17:23
We do agree that an NTQ can be served on the mesne tenant. The reason being that he's not living there so his tenancy is not assured.

S13 of the RRB doesn't abolish NtQs. It simply continues the current position, which is that they can't be used for assued tenancies.

Kizzie

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14:25 PM, 8th October 2024, About 2 months ago

The mesne tenant is the intermediate landlord to an ASTenancy. The mesne tenant can be long leaseholders with a head landlord. The mesne tenant can serve ss8 and 21 housing act 1988 on the AST.

The head landlord can only serve a section 146 forfeiture on the mesne tenant for breach of lease if under letting not allowed in the lease.

Michael Crofts

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10:32 AM, 9th October 2024, About 2 months ago

Reply to the comment left by Kizzie at 08/10/2024 - 14:25
Yes you are right but for the avoidance of doubt when I referred to a mesne tenant the context was that we were discussing tenants whose sole interest in the property is derived from an Assured Shorthold Tenancy but who subsequently purport to grant a sub-tenancy in breach of their lease. It's always a problem when discussing issues on here, whether or not to deal with cases where the head landlord is the freeholder in possession at the time of granting an AST or whether they are a long leaseholder. Sometimes the legal position makes a difference as you have correctly pointed out.

Kizzie

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11:13 AM, 9th October 2024, About 2 months ago

Thanks. I had in mind long leaseholders who cannot sell because of cladding issues and driven to renting out their properties to derive income to help with skyrocketing service charge and block insurance.

DPT

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18:41 PM, 9th October 2024, About 2 months ago

It doesn't matter whether the superior landlord is a freeholder or leaseholder. If they grant an AST to a tenant who either never occupies but instead sublets, or who occupies for a period and then sublets, The tenant, (mesne tenant) has a tenancy which is no longer assured by virtue of not living there and the landlord can serve a common-law Notice to Quit on them to end their tenancy.

Kizzie

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20:29 PM, 9th October 2024, About 2 months ago

You mean the mesne tenant as immediate landlord to the AST? If the AST is not there then the accommodation is vacant but if the mesne tenant as long leaseholder has a lease agreement with the Head Landlord and the lease does not allow subletting then that is a breach of covenant and the HL can only apply the provisions in the lease and apply to the FTT for a determination to pursue forfeiture of the lease under Law of Property Act 1925 s. 146

Michael Crofts

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21:09 PM, 9th October 2024, About 2 months ago

I have a feeling we are beginning to sound like angels dancing on the head of a pin.
The key issue in this article is the statement: 'It is not illegal or prohibited for a tenant to sublet when they have an active fixed term tenancy and any clause in an AST that states otherwise could be deemed unenforceable as contracts cannot override statute law.'
This is wrong and the fact that it has not been corrected by the mods/admins of Property118 bothers me.

DPT

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11:10 AM, 10th October 2024, About 2 months ago

Reply to the comment left by Kizzie at 09/10/2024 - 20:29
Kizzie, I think you are getting confused. Mesne tenant simply means intermediate tenant. In the hypothetical case we're discussing, it is clear that the mesne tenant has taken an AST from the superior landlord, who can be anyone with a right to let the property. He is then sub-letting the space. The superior landlord has no legal relationship with the sub-letter and can only serve notice on his tenant, (the mesne tenant). If the sub-let was in breach of the tenancy agreement then it is unlawful and the sub-letter can be removed without a court order. Conversely, if the tenancy agreement permits sub-letting or is silent on the matter, the sub-letter would have a valid AST and would become the direct tenant of the superior landlord when the mesne tenancy ends.

Kizzie

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11:37 AM, 10th October 2024, About 2 months ago

BBC news today is a warning entitled “I was evicted and lost £20,000 in rental scam”.

I am not clear what you mean by - ‘taken an AST ‘ from Superior (Head )Landlord. In case of Long leaseholders who paid a premium to purchase a lease to a flat or house. This the legally binding contract which may or may not allow the leaseholder to sublet. If this contract does not permit subletting then the LH is in breach of contract and the lease forfeit.

The renter BBC reports was told the leaseholder was a landlord which he was but the leaseholder (mesne tenant) was in service charge arrears with his own landlord and as a consequence of forfeiture of the lease the renter lost out and had to leave.

It seems the ex-leaseholder kept the rental income and didn’t hand it over to his landlord to make up arrears in service charge due under his lease contract

DPT

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10:03 AM, 11th October 2024, About 2 months ago

Reply to the comment left by Kizzie at 10/10/2024 - 11:37
This thread is discussing the article by Julie Ford on ASTs, not long leases. The mesne tenant in this case has an AST, not a long lease. His superior landlord would be the freeholder or leaseholder or could, in theory even be another AST tenant.

Incidentally, the BBC article you refer to suggests that the scammer purporting to be the owner of the property was himself a tenant, not a long leaseholder.

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