Subletting Scams – why landlords are afraid to report them

by Mark Alexander

14:11 PM, 23rd September 2013
About 6 years ago

Subletting Scams – why landlords are afraid to report them

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Subletting Scams – why landlords are afraid to report them

Many landlords are fearful to seek help from their local authorities in terms of dealing with subletting scams.

Just imagine this, you’ve jst let your nice little three bed house to Mr & Mrs Lovely and their two perfect children, only to find out that 10 of their family have also moved in. How would you feel?

Subletting scams can also go a stage further. Mr & Mrs Lovely may never actually move into the property, they simply cram as many immigrants in as possible (sometimes illegal immigrants) and charge them all a rent and make a huge profit.

The landlord then has numerous concerns including:-

  • Mr and Mrs Lovely fail to live up to their name and stop paying rent, but they continue to collect it
  • wear and tear on the property
  • noise related issues affecting neighbours
  • will their landlords insurance still be valid
  • fire safety
  • HMO licensing
  • and so the list goes on.

You would think that a quick call to the local EHO (Environmental heath Officer) should sort the problem wouldn’t you? So far as I’m aware, EHO’s have every right to close the property down if they consider it to be a danger to human life, through overcrowding for example. In such circumstances, that’s exactly what many landlords actually want to happen. What they don’t want is to spend several months going through the Courts to obtain possession order, which under the circumstances they will inevitably obtain but at what cost to themselves and at what risk to human life in the meantime?

Whilst any legal action is ongoing the landlords property is probably getting ruined, they may not receive rent, the neighbours get very upset and the landlords ends up with a huge bill.

The fear of reporting such problems runs deep. Will the local authorities use the problem against the landlord? Will they take pictures of the property and use them in their anti-landlord propaganda to justify licensing schemes? Will the local authority press charges against the landlord for the state of the property, which may well have been perfect when they first rented it to Mr & Mrs Lovely?

In many cases, inventories prepared by landlords are not up to scratch so the fear of reporting problems is that tenants will claim the property was a death trap from day one and the landlord becomes a victim twice over!

I am hoping that any TRO’s (Tenancy Relations Officers), EHO’s (Environmental Health Officers) and others with the powers to actually do something about this will comment on the problem as well as landlords and letting agents. Subletting Scams - why landlords are afraid to report them

 



Comments

Jay James

15:37 PM, 23rd September 2013
About 6 years ago

http://www.property118.com/key-property-uk-ltd-fined-47k-for-damp-and-unlicenced-hmo/43343/comment-page-2/#comment-28585

The comments of MKS Lunar on the forum linked above show some frightening treatment by the occupiers and council alike.
It seems that they just ignored any evidence of the facts stated by MKS Lunar.
--

Before anyone gets uptight about it, Mark's mention of illegal immigrants may have been used because they are targets for those who think they will not complain to the powers that be about those mistreating them.
--

Vanessa Warwick

16:14 PM, 23rd September 2013
About 6 years ago

Mark,

I am a bit confused about who landlords should report sub-letting scams to!

I don't agree that the EHO might help sort the mess out.

Mid-term property inspections will immediately reveal if a sub-let has taken place.

The landlord does not need to report this to anyone in my opinion.

They just need to get control of their property back.

They can work with the sub-let tenants to remain in the property and pay rent direct to them.

Or they can get Landlord Action to work on their behalf, and serve notice on the head tenant.

The situation just needs to be dealt with in a pragmatic manner to get the property back, do any remedial works to get it back into lettings standard, and then re-let having learned a lesson ... and the value of mid-term property inspections and good neighbours. 🙂

Mary Latham

16:36 PM, 23rd September 2013
About 6 years ago

Vanessa your post is logical but remember landlords must give tenants a minimum 24 hours written notice before the can carry out inspections. This is plenty of time for the tenants to remove all evidence that any unauthorised "visitors" are living in the property. Tenants also have the legal right to refuse a landlord entry.

I agree with Mark and I would always involve the local authority if I suspected subletting. That would cover my back and get a much quicker result that me going through the Possession process and the local authority are less likely to be refused entry by the tenant

Follow me on Twitter@landlordtweets

My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337

Mark Alexander

16:54 PM, 23rd September 2013
About 6 years ago

Reply to the comment left by "Vanessa Warwick" at "23/09/2013 - 16:14":

Hi Vanessa

I don't think your comment addresses the points I have made.

It's all very well finding out that a problem exists, the point is what to do about it.

From what I can understand from landlords I've spoken to who have found themselves in this position it's an absolute mess. They may be damned if they do report it to the authorities and double damned if they don't.

Let's assume they take your advice and don't tell the authorities. What happens when the place burns down or the neighbours make a complaint to the council?

What happens when the council prosecutes the landlord for no HMO licence and heavens knows what else?!!!

I have also explained in my article the potentially dire consequences of reporting the issues to the authorities.

Either way, the landlord still has massive problems, even if the council never find out, least of all unexpected wear and tear on the property and the legal costs associated with eviction and the very minimum ... often much worse ... rent arrears, trashed property, no insurance etc.

HB Welcome

21:26 PM, 23rd September 2013
About 6 years ago

Hello Mark,

I agree with much of what you've said and it is a nightmare situation for any responsible landlord.

I've had a couple of the milder scenarios you highlight.

But the local authorities really couldn't care less. (at least the one's I deal with)

Specifically-

"Let’s assume they take your advice and don’t tell the authorities. What happens when the place burns down"

-It is insured.

"or the neighbours make a complaint to the council?"

-The council will do F.A.
Standard advice will be; 'keep a diary, get witnesses, visit our website, come back next year if it is not sorted and we can give you the same advice again'.

"What happens when the council prosecutes the landlord for no HMO licence and heavens knows what else?!!!"

-Let them prove it.
In the extremely unlikely event they can do so before a section 21 is effected, then you have substantial evidence for a ground 12, 13, 14, 15 or 17 eviction
(yeah I know, dream on!)

And when you come to dispute resolution to get fair compensation for the damage, it should be very easy proving 3 families have been living there and not one.
(yeah I know, dream on!)

The glib answer to the problem, that is nevertheless true, is don't let them in there in the first place.

Caution. referencing, experience, gut feeling, and a cold hearted business decision.

One day I'll follow my own advice 🙂


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