Introduction
Subletting is a process that a lot of landlords steer clear of because of the additional risk involved but ultimately it can be a way for tenants to help make their rent payments every month. Read on for all you need to know about subletting.
What is subletting?
Subletting is where a tenant rents out a home they are already in the process of renting to another tenant who will then be called a subtenant. This can be a small part of the home or the entire home depending on the type of agreement they have in place.
Subletting can also be used for commercial properties where a business rents out space to run its business from a bigger tenant. This bigger tenant managing all the subtenants will then be responsible for paying rent to the landlord.
What’s the difference between lodging and subletting?
A lodger is someone who has signed a lodger agreement. This agreement is signed if someone wants to rent a room often on a more casual agreement. This casual agreement often involves the landlord having the right to enter the room if they want and a landlord being able to evict a tenant at a short notice and without reason.
A subtenant typically has exclusive rights to their room and will also be more secure in their agreement. They can sign their agreement with the tenant to who they pay rent or also involve the landlord in the agreement as well. A subtenant can also have exclusive rights to the entire property with the right agreement in place, rather than just being able to rent a room in the case of a lodger.
What are the benefits of subletting for tenants?
Subletting is attractive for tenants for a few reasons. These reasons mainly relate to how flexible a sub-tenancy usually is. The appeal comes from less regulation than signing an assured shorthold tenancy with a landlord.
Easier approval process
For residential tenants, the main benefit as opposed to other means of renting like renting directly from a landlord is there are fewer requirements in order to gain approval for living in a property. As an example, a DSS tenant who is having a tough time finding a landlord because of their financial situation may find it simpler to rent as a subtenant with more relaxed rules around tenant referencing.
However, because you are renting from someone who is already approved through this process, the approval process for a subtenant as opposed to a tenant is usually a lot easier to get through. Therefore, subletting is attractive for those with things like low credit scores or for those with less secure employment histories.
Shorter tenancy agreements
Another advantage of subletting is that it’s a lot easier to find shorter tenancy agreements. This is perfect if you are living somewhere short term or you’re uncertain about if you want to live somewhere.
For example, someone doing a short-term job in a new area can start a new tenancy in a sublet, test out the neighbourhood on a shorter tenancy agreement and determine if the area is right for them. Providing notice to a landlord wouldn’t be an issue after they leave as they just have to tell the tenant subletting the property before they can move out.
Save money all round
Sublets are also generally cheaper. It is common for those subletting to not ask for a deposit and charge below-market rents as a result.
Often, this results in the quality of tenants that sublet a property being worse as they are more likely to have rent arrears or not take care of a property. However, for those subletting, this can be seen as well worth the extra money that helps them to pay the rent.
How to legally sublet a home
In order to legally take in a tenant if you are a tenant yourself, you would need written permission from your landlord. This can be written in the tenancy agreement that was originally given. Or, you may be able to ask your landlord to form a new tenancy agreement with the permission to sublet or ask them to include the new subletter as part of the agreement too.
In this agreement, a landlord may also give you regulations on how long you can sublet a property to and to what type of tenant. For example, it is legal for a tenant to move away from a property for a short period of time and sublet the property to another tenant in the meantime. Or sublet other rooms in the property while they are still there.
However, filling the property with more rooms than there are in the property or letting the property out on a short term is illegal. This it’s why a landlord should always oversee subletting and make sure they have an idea of who the tenants are in the subletting agreement.
What happens if you sublet your home and you aren’t allowed to?
As a tenant, it is your responsibility to tell a landlord that you wish to sublet the property and it is a landlord’s responsibility to make sure there are enough rooms, and space and the right type of tenants are able to sublet. With the permission of a landlord and making sure the area is fit to house more tenants, subletting is completely legal.
The laws are more severe if you sublet to a tenant who doesn’t have the right to rent in the UK and you know they don’t have the right to rent in the UK. Learn more about illegal renting here. Adding to this, subletting social housing is also against the law and is heavily persecuted.
In these cases, effective communication with your landlord is crucial because none of these laws applies if you have a family member or friend living in your home temporarily without paying rent as a lodger.
So, a landlord may see new people living in the property and try to convict you for having a subtenant where really there is a misunderstanding and you are still the only tenant in the property.
It could be that you aren’t charging them rent and even if you are, they still don’t have exclusive rights to their room and the landlord can enter the room at any time. In this case, the tenant simply has a lodger, which is completely legal.
In general, if you have a subtenant but you aren’t breaking any serious rules like renting to illegal tenants or subletting social housing, a landlord will not take court action against you to convict you of breaking the law but instead will take legal action against you to evict you.
This eviction process must be followed under section 8 of the housing act of 1988 where a formal eviction notice must be sent and a tenant will have a minimum of two weeks to leave the property. Depending on the agreement.
Who is able to sublet?
Subletting the right type of tenant and only subletting the type of homes that are legal to sublet in is mandatory to prevent legal issues. Subletting must be done with the right letting type and a tenant must have the right to rent in the UK you must also make sure a tenant isn’t subletting within social housing.
How can assured tenants and assured shorthold tenants sublet legally?
Those who have signed assured tenancies and assured shorthold tenancies have slightly different rights than someone in a regulated tenancy would. This is because they are protected under the housing act of 1988. An assured tenancy agreement can either be fixed term or periodic and each one has slight differences.
In a fixed term, if there is nothing written in the tenancy agreement about preventing this from happening, then subletting is allowed. For example, if in their tenancy agreement the landlord forgets to write about subletting, the landlord will have a hard time refusing the tenant from subletting once the agreement is signed on a fixed term basis.
In a periodic assured tenancy (where rent is paid in intervals for an undecided amount of time), subletting isn’t allowed unless you get a landlord’s permission. However, because of the short-term nature of a periodic tenancy where a tenant can be evicted from a property without notice after 6 months within 28 days, adding in new subtenants is often too much bother for both the tenant and landlord.
Can an introductory tenant sublet?
An introductory tenant is someone who lives in social housing and is on a trial period of their tenancy agreement. This lasts for 12 months and if the tenant obeys the terms of their agreement, they become a secure or flexible tenant.
Under the legislation, it is illegal for an introductory tenant to sublet or have lodgers in their property as it is against the terms of the tenancy. In this case, the tenant wouldn’t have passed the trial period and will not be granted status as a secure or flexible tenant.
Can protected tenants sublet?
A protected tenant or regulated tenant is someone who has the right to be in the property of life. In order for tenants to have this type of agreement, they would have to have signed their tenancy agreement before 1989 when new regulations came into effect.
Like the more commonly used assured tenancies most renters in the UK have signed, a tenant needs to gain permission from their landlord before they have the right to sublet their property. This may originally be in the agreement or you could ask the landlord to sign a contract addendum, adding on regulations around subletting to the original agreement.
Can demoted and family intervention tenants sublet?
Demoted and family intervention tenants always have a social housing landlord. They don’t have a normally secured tenancy in place because the tenant has caused a nuisance in the past. This could be anti-social behaviour or making the neighbours of their previous home uncomfortable.
As a result, it is unlikely family intervention tenants have the right to sublet in their tenancy agreement although it is always good to check with the social housing landlord or tenancy agreement to make sure.
Who is responsible for a sub-tenant?
Because there are multiple tenants involved in a subletting agreement, you may have wondered who is responsible for the subtenants if something were to go wrong.
If a subletter doesn’t pay their rent, it is the head tenant or the “mesne tenant” who has to cover these rent arrears and pay the landlord. As a result, for tenants subletting a property, it is always a good idea to prepare for the worst, keep track of the financial situations of a subletter and know that the burden of renting always lies with you.
A subletter can also damage the property, in this case, it is also the responsibility of the head tenant to take responsibility for it. However, it can be written in the agreement between tenant and subtenant that there they have to take responsibility for some of the cleaning or maintenance of a house or part of the house they are renting.
Nonetheless, a landlord has to make sure there is enough room in the property to allow subletting. For Example, if a landlord allows subletting in a HMO, there is a good chance the property could become overcrowded. Whereas in a single let this likely wouldn’t be an issue.
What are the risks and benefits of allowing subletting as a landlord?
Subletting ultimately carries a fair amount of risk. If you are a landlord debating whether to allow a tenant to have subletters in your property, here are some of the main things to consider:
- Bad subtenants tend to not take as much care of a property
- A bad subtenant can ruin a good tenant’s reputation with you
- There is additional paperwork to sign if this isn’t already in place
In conclusion
As a landlord, you are completely within your rights to refuse a subletting agreement and only work with tenants by themselves. The choice is up to you and you should consider all options carefully before making a decision. Everyone has a different tolerance for risk and different levels of experience.
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