As house prices rise and continue to drive up the cost of a rental property, particularly in London and the South East, it is becoming increasingly common for tenants to sublet. If you are a landlord you may find yourself in a situation where your property is being sublet without your knowledge.
Know your legal position
Subletting should not be confused with lodging, which is a separate legal arrangement, usually entered into by a licence agreement. When someone lodges they have the right to occupy a part of a property but will not have exclusive possession of it. This means that landlord’s rights of access to the property will remain as per the original tenancy agreement.
Sub-letting arises when your tenant enters into a tenancy agreement with someone else and gives them exclusive possession of a part, of perhaps all, of your rental property. Your tenant and the individual subletting may share parts of the accommodation but the part to which the subtenant has exclusive possession to will require their permission to be entered either by you or your tenant.
Review the tenancy agreement
The landlord will need an express provision in the tenancy agreement to ensure subletting is not permitted to be able take action against it.
The simplest method by which a landlord can prevent their tenants from subletting is by the inclusion of a clause in the tenancy agreement requiring the tenant to seek the landlord’s permission before subletting. However it is worth bearing in mind that this consent cannot be unreasonably withheld.
End the tenancy agreement
If your tenant then sublets without your consent to do so, or sublets when the tenancy agreement prohibits them from doing so, they will be in breach of their tenancy agreement and are subletting unlawfully. The landlord can then serve the tenant with a section 8 notice, detailing the breach of the agreement and bringing the tenancy agreement to and end. If the tenant and subtenant fail to vacate the property on the expiration of the notice the landlord can commence possession proceedings at court.
It is worth noting that, although service of a section 8 notice will bring both the tenancy agreement and the subtenancy agreement to an end, if the landlord has given implied consent for the subtenancy, for example they knew about the subtenant and did not contest this, the subtenant may have grounds to remain in the property and therefore could avoid eviction.
Offer the subtenant a tenancy agreement
Landlords also have the option of offering the subtenant a tenancy agreement and allowing them to remain in the property on this basis.
If the original tenancy agreement does not include the clause referred to above, the landlord can serve a section 21 notice under the Housing Act 1988, which requires the tenant to give up possession of the property by a specified date. The subtenant’s tenancy agreement automatically comes to an end when the tenant’s tenancy agreement does. The subtenant will also have to vacate the premises in accordance with the section 21 notice. Once again, if necessary, after expiration of the notice the landlord can commence possession proceedings at court.
A word of caution, a section 21 notice can not be served within the first six months of the tenancy agreement and will not be valid in respect of a fixed term tenancy agreement unless there is a ‘break’ clause included.
Clearly the rules surrounding subletting are complex and in depth and it is always recommended that you seek legal advice in respect of such matters.