What is Subletting?
Subletting occurs when a landlord rents a property directly to a tenant and that tenant decides to let out part or all of the property to another tenant. This isn’t necessarily a problem if the tenant has already obtained the landlord’s permission to do so.
However problems can arise when tenants sublet all or part of the rental property without the permission of their landlord. In order to prevent such problems, it is vital for a landlord to know exactly what it says about subletting in the tenancy agreement and to obtain legal advice at the earliest opportunity.
A landlord is unable to refuse permission if the tenancy agreement has a section detailing that the landlord’s consent is needed for subletting and the request is reasonable. In addition, if the tenancy is a periodic one (runs month to month after the expiry of a fixed term) then specific rules apply.
If the tenancy agreement is silent about subletting, the tenant will need permission from the landlord to sublet, and the landlord can refuse for any reason. For fixed term tenancies, for example, a tenancy of six months or one year, the tenant can sublet without the consent of the landlord if subletting is not mentioned in the tenancy agreement.
In most tenancy agreements there is normally a term which covers whether or not subletting is allowed; this is vital. To determine if a tenant is subletting illegally, it’s necessary to establish if they are in breach of their tenancy agreement.
If a tenant is subletting without consent, it’s likely they will have broken terms in their tenancy agreement. This is a breach of contract and means that the landlord can take action to evict them by starting possession proceedings.
Paul Fursman, an Associate Solicitor in our Residential Property department, said:
“Here in the Residential Property department at Mullis & Peake we regularly act for clients who are purchasing investment properties which they intend to rent out. Whether purchasing your first investment property, or adding to an existing portfolio, it will undoubtedly be an exciting prospect, however it is important to make sure that the tenancy agreement is also considered as part of the conveyancing transaction.
By doing this we can ensure that issues such as subletting are covered and also that any proposed tenancy agreements meet the mortgage lender’s requirements. This can go a long way to prevent any problems in respect of subletting before they occur.
Should problems occur in the future, our dispute resolution team are also able to assist in advising landlords upon issuing possession proceedings.”