Subletting insurance wake-up call for landlords
2 years ago
Tenants subletting flat without permission?
12:03 AM, 8th February 2024, 2 years ago
10
Hello, I’m interested to hear your thoughts on the following:
• Flat rented out to Party A on a 1 year AST with no break clause. All tenant checks came back green.
• Property fully managed by a reasonably big estate agent.
• Sublet agreement obtained to rent to Party A from the freeholder.
• Landlord insurance obtained.
During the first property inspection (early in tenancy) by the managing agent it was observed that the flat is being sub-let in contravention of the terms of the AST. Individuals present at the property during the inspection admitted that they rent their room from Party B. When challenged Party A has become unresponsive.
I believe the following to be true:
• Party A is in breach of AST (no subletting allowed).
• Party A is creating a further breach in the headlease.
• Party A/B is operating an unlicensed HMO (multiple non-related adults living within the property).
• Party A/B is potentially ignoring Right to Rent legislation (no way of knowing Party B did the required checks).
• Party A/B could be engaging in fraud (the relationship between Party A and Party B is suspicious).
Therefore,
• I should inform my insurance company that there is an illegal sublet occurring in my property.
• I should inform the freeholder that Party A is in breach of the AST.
• I should inform the Council that an unlicensed HMO is (potentially) being operated in my property without permission. What is the best way to do this?
• I should inform the Home Office that there may be Right to Rent violations occurring in my property. What is the best way to do this?
• I should inform the Police that a fraud / misrepresentation has occurred. What is the best way to do this?
Consequently,
• I should serve section 8 notice on Party A immediately.
What do you think?
Al
Comments
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Member Since October 2022 - Comments: 402
10:08 AM, 8th February 2024, About 2 years ago
Inform the court in possession proceedings maybe? Take into account they may stop paying rent. Serve s21 as soon as it’s lawful. Is it an area of selective licensing? If so then maybe talk to the council to cover yourself.
Member Since October 2022 - Comments: 409
10:27 AM, 8th February 2024, About 2 years ago
Response to Al
You as Leaseholder are held to be in breach of your lease agreement or deed with your lessor/ landlord the named party in your lease.
You as Leaseholder can consequently take legal action against the estate management company with whom you agreed contract to manage the let.
Ask them what they are going to do to the matter right. That’s what you’re paying them for
Member Since October 2013 - Comments: 1642 - Articles: 3
10:52 AM, 8th February 2024, About 2 years ago
Reply to the comment left by Kizzie at 08/02/2024 – 10:27
I have a similar situation in my remaining BTL. Long term tenant, no problems, but her partner on the AST appears to have left some time back, and when I attended to fix a door handle, it was clear she is now ‘subletting’ to her daughter and child, and not living there.
She pays her rent [below market rate] and I don’t wish to end the tenancy at this time [I will be selling, though].
I’ve instructed my agent to investigate and sort it out, and am awaiting a new AST.
Member Since January 2020 - Comments: 559
11:44 AM, 8th February 2024, About 2 years ago
Reply to the comment left by Kizzie at 08/02/2024 – 10:27
It sounds like the agent has been proactive in this case. The managing agent cannot be responsible for the unlawful actions of the tenant.
A good agent will, of course, make suggestions s to solving such problems. If I were the agent (fully qualified with 35 years experience) I don’t think this is an easy case to advise on so I’d be straight to lawyers.
Member Since March 2016 - Comments: 27
12:12 PM, 8th February 2024, About 2 years ago
AI,
They are in breach of the AST, serve a S8. Ensure you have the evidence, such as statements from agents in order to prove your case. Also, let the tenant know it is a costly route and you will be recovering your costs from them if they let the matter go to court.
Best of luck
Kat
Member Since March 2016 - Comments: 27
12:14 PM, 8th February 2024, About 2 years ago
Reply to the comment left by NewYorkie at 08/02/2024 – 10:52
New Yorkie,
Just put the rent up to market level to stop your original tenant making money from your place. They should hand back the tenancy as they are living else where.
Best of luck
Member Since September 2022 - Comments: 198
1:08 PM, 8th February 2024, About 2 years ago
I’d say you definitely need legal advice here. Far too many issues to be dealt with simply. I’d assume you want everyone out asap and your property back without any more hassle so why be making things more complicated with questions you may not need to be getting Involved in. Try NRLA.
Member Since September 2023 - Comments: 335
2:01 PM, 8th February 2024, About 2 years ago
Reply to the comment left by Kat Scott at 08/02/2024 – 12:14
Not has easy has you think that mate, if only it was.
Member Since October 2020 - Comments: 1173
4:39 PM, 8th February 2024, About 2 years ago
As the tenant is not living there, you may be able to serve a common law Notice to Quit. This should speed things up. If you have a prohibition in your tenancy agreement on sub-letting then the occupants will have no right to remain once the tenancy ends. You should get legal advice on all this.
Incidentally, you forget to mention HMRC in the list of who to grass him up to.
Member Since October 2013 - Comments: 1642 - Articles: 3
6:05 PM, 8th February 2024, About 2 years ago
Reply to the comment left by Kat Scott at 08/02/2024 – 12:14
She’s not making money subletting to her daughter. However, you raise an interesting point about the rent. I’ve just increased it under the terms of the original AST, but if a new AST is proposed to address the situation, there should be an opportunity to raise the rent to the market rate.