Subletting is a term you may well have heard of, but not experienced as either a tenant or landlord. So, what is subletting? How does it work? Is it a risk to one or both parties involved in the rental process? In our quick guide, we outline everything you need to know whether you’re thinking of subletting, or thinking or whether or not to allow it as a landlord.
FAQs
What is subletting?
Subletting is the leasing or renting out of part of an already rented property by the tenant. For example, you might rent a whole apartment from your landlord, the property owner, and then sublet out a single room. The person you sublet to is called a ‘subtenant’.
Is it legal to sublet a property?
Provided that your tenancy contract allows for it, subletting is entirely legal. However, according to UK Government guidelines, you will need your landlord’s permission to do so. Also, many landlords will choose to prohibit subletting in their tenancy agreement.
If you are not allowed to sublet all or part of your home but do so anyway, this is called unlawful subletting. The same applies if you are supposed to get your landlord’s permission but fail to do so.
Is it subletting if they don’t pay rent?
If someone is temporarily using a room within your rented home but isn’t paying you rent, then this is generally not considered subletting. Subletting, and unlawful subletting, usually involve the subtenant paying formal rent to the tenant.
Is letting a friend stay subletting?
Letting a friend stay is not subletting. Landlords may suspect you of subletting if you have a friend or relative staying for long periods of time, but if you explain that money is not changing hands, this can easily clear up the misunderstanding.
Who is responsible for the subtenant?
Generally, the tenant will be legally responsible for the actions of their subtenant, in case of damage to the property, etc. Landlords do not have a legal relationship with subtenants, only with their tenants.
However, landlords can create a legal relationship with subtenants, even inadvertently. For example, if they collect rent directly from them. In legal cases though, subtenants are generally considered the responsibility of the tenant who let them stay.
Why do tenants sublet?
Tenants usually decide to sublet part of their rented home for financial reasons. Having someone take on a spare room and help pay the rent can be a big help, especially with UK rental rates going up 6% between 2023-2024. Other reasons to sublet might be for added security, or simply for the purpose of having some company.
Is it safe to allow subletting?
As a landlord, it is perfectly legal to allow subletting. Provided that your tenants don’t abuse your trust and are upfront about who they are subletting to, and when, then it is also generally safe.
The key element is trust. While subletting can be a shady business (see below), it can be a perfectly straightforward process. It can also be beneficial to landlords, as it provides an extra layer of rental security, with more people to make up the rent.
What are the problems with subletting?
The main problems with subletting occur when it happens without the landlord’s knowledge. Unlawful subletting can destroy the trust between tenant and landlord, and can be grounds for eviction.
On the landlord’s side, tenants may decide to rent the property, and then sublet it out entirely at a profit. This can cause major issues if the property is sublet to too many people, turning it into an (HMO), or a house in multiple occupation. If this happens without the proper permissions, the landlord can be liable for fines or further penalties, even if it happens without their knowledge.
How much can I be fined for unlawful subletting?
While trial outcomes vary greatly, subletting while failing to obtain a HMO license can carry a huge fine of up to £30,000 per offence. Technically, courts can levy unlimited fines for this type of offence.
For tenants who unlawfully sublet – i.e.: they don’t inform their landlord – the worst likely outcome is eviction and the payment of a nominal fine and/or covering the landlord’s legal fees.
What do I do if my tenant is subletting?
If you are a landlord and your tenant is subletting without your knowledge or approval, you have several options. You can accept the situation, and hope it won’t lead to problems. Alternatively, you can reason with the tenant and try to resolve the issue to your mutual satisfaction. If that doesn’t work, you can try to speak directly with the subtenant, explaining that their subletting is unlawful. This may encourage them to move on.
If you want the subletting to stop and can’t reason with either the tenant or subtenant, you will need to legally enforce your tenancy agreement. This involves going to court and trying to secure an eviction notice, citing the relevant subletting clause.
Is subletting worth it?
If you are a tenant and need help paying the rent, or want extra company in your home, subletting can be an effective way to achieve both. If you’re a landlord, allowing subletting in your leased-out property can make it more competitive in the rental market, and may improve its rental security as well as the wellbeing of your tenant(s).
On the flip side, subletting does add another layer of risk and legal complexity to renting. It can create grey areas of responsibility and bad feeling if there’s any kind of misunderstanding. This is why many landlords prohibit it entirely.
You’ll have to decide if the risks outweigh the potential rewards, or vice versa.
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