Landlords pay the price when tenants secretly sublet

A legal firm has warned landlords that if tenants secretly sublet, it’s the landlord, not the tenant, who could face hefty fines or even criminal prosecution.

Landlord Licensing & Defence has warned that landlords may not realise that subletting even one bedroom can turn a standard single-let into a House in Multiple Occupation (HMO) under the Housing Act 2004.

Once a property becomes an HMO, landlords are bound by strict regulations, and breaching these rules could land them in hot water.

The news comes after a survey by Direct Line Business Insurance revealed more than two-thirds of the UK’s landlords have caught tenants letting out their homes without consent.

Lead to either criminal prosecution and fines of at least £20,000

Phil Turtle, a landlord law expert at Landlord Licensing & Defence, says once a house becomes an HMO the council will hold the landlord responsible for any rules broken.

He said: “I can guarantee that unless your property has been designed as an HMO, yet your tenants turn it into one by subletting, the landlord will become criminally guilty of having inadequate fire alarms, inadequate fire doors and in many cases illegally operating an HMO without the necessary licence.

“All of that can lead to either a criminal prosecution and fines of at least £20,000 up to sometimes £50,000 to £80,000.”

While in theory councils could prosecute tenants who carry out unauthorised sublets, Mr Turtle warned that this is rare and said: “On the odd occasion this happens, it is always in addition to prosecuting or fining the landlord.”

Rule 1 is do not speak to the council

Landlord Licensing & Defence warns that if subletting turns a property into an unlicensed HMO, tenants can apply for a Rent Repayment Order (RRO) worth up to 12 months’ rent, set to rise to two years’ rent, when the Renters’ Rights Bill comes into force.

In areas covered by Article 4 Directions, landlords also risk planning enforcement action.

If the HMO doesn’t have the proper planning permission, breaches can trigger heavy fines under the Proceeds of Crime Act.

Mr Turtle urges landlords caught in this situation to get expert advice fast and not speak to the council directly.

He said: “If any of this happens to you as a landlord, you frankly do not have the skills to get yourself out of this mess.

“Rule 1 is DO NOT speak to the council, you will only give them evidence for your prosecution.

“Immediately get expert help. Not from your local friendly solicitor, they will actually make matters worse because this is not their area of expertise.

“There are very few solicitors with this knowledge, however Landlord Licensing & Defence is the pre-eminent expert at sorting out the legal mess and horrendous criminal or financial liability your tenants have created for you.”

For help and advice about a range of landlord legal issues, including fighting unfair and unreasonable conditions in HMO licences or selective licensing, seek professional advice at Landlord Licensing & Defence on 0208 088 8393 or book a free 10-minute free 10-minute diagnosis call by clicking here.