Did you know that one in ten tenants admit to illegally subletting their rental property*?
The practice is even more common among young people; in a recent survey, 25% of tenants aged 18 to 24 confessed to secretly subletting all or part of their rental.
So why should landlords be concerned about illegal subletting? After all, if the rent still gets paid on time, what’s the problem? Here are a few reasons.
- You have no idea who is living in your property and what kind of illegal or unwise activities they’re undertaking.
- It can breach the terms of your mortgage and invalidate your landlord insurance.
- If your tenant sublets to several people, your property could, by stealth, qualify as a house in multiple occupation (HMO). The council could fine you for not meeting HMO regulations.
- Trying to regain possession of a property can be more complicated and costly.
What are the signs of illegal subletting?
- You notice an increase in the number of people coming and going from the property.
- Mail deliveries spike, including letters addressed to people not listed as tenants.
- The bins are full to overflowing.
- You find bunk beds or mattresses in bedrooms.
- The legitimate tenant is not returning your calls and always has an excuse as to why you shouldn’t pay a visit.
Protect your property
Contract – Ensure your tenancy agreement includes a subletting clause. Some landlords opt to prohibit subletting; others make it a condition that the tenant must get permission first. (For more advice on this issue, contact us to discuss it.)
Raise awareness – About 75% of tenants who admitted subletting in the survey hadn’t checked their lease to see if it was permitted. Regardless of what you think of this reasoning, never assume the tenant has absorbed the finer details of their contract. Have a chat at the start of the tenancy. Explain what constitutes subletting and that it’s a breach of contract. Also, inform tenants that it may invalidate their own contents insurance.
Inspections – Conduct regular inspections to gauge what’s happening at the property.
Reference checks – Carry out thorough reference and credit checks before signing a new tenant.
Build rapport – If tenants consider you a hands-on landlord who responds quickly to issues, they’re much less likely to test boundaries.
Use a letting agent – Having a reputable letting agent manage the property means you’ll have another set of eyes on the ground, keeping check on your investment.
Want to know more about our property management services? Contact us here at Newton Fallowell Melton Mowbray today on 01664 566210.
* Figures in this article taken from a Direct Line survey, 2023
