What Is Subletting? A Complete Guide

It’s all about the lease.

What is subletting? When is it considered unlawful? And what are the risks involved in legal subletting? Let’s take a closer look.

In its simplest form, subletting involves a tenant renting out a property from a landlord and then renting either the whole or part of the property to another tenant — known as the “subtenant”.

When a property is sublet, the original tenancy agreement, or lease, remains between the landlord (known as the head landlord) and the tenant. 

Following on from this, there’s an agreement in place between the tenant and a subtenant. The tenant becomes the ‘mesne’ (or ‘intermediate’) tenant. The subtenant pays rent directly to the original tenant, not the landlord. The subtenant has exclusive use of the space they are renting.

Why might someone sublet a property?

There are many reasons why a tenant might want to sublet part or the whole of a property. 

Some of these are:

  • If the tenant wants to or needs to travel for an extended period,
  • If the tenant experiences a change in income, or
  • If the tenant needs to relocate before the end of their tenancy agreement.

Is subletting legal? 

Whether subletting is legal or not will depend on the tenancy agreement and what is stipulated about subletting. The tenancy agreement should have a clause on subletting, defining whether it’s acceptable or not, and — if it is an option — what the conditions surrounding a sublet are. 

Subletting is legal if the tenant acts in accordance with what is allowed by the tenancy agreement. Some tenancy agreements state that subletting is only possible with the landlord’s permission. 

When is subletting illegal?

So, when is it illegal to sublet a rented property?

Subletting is considered unlawful if:

  • A tenancy agreement prohibits subletting, but a tenant proceeds to sublet a property or part of a property.
  • The landlord’s permission is needed to enable subletting, but the tenant sublets without getting approval.

In such instances, the tenancy agreement has been broken, and the landlord is within their rights to take legal action against the tenant. This could involve eviction, and also prosecution from a local authority.

If certain social housing tenants sublet their homes illegally, they are at risk of being prosecuted under criminal law.

What is the difference between subletting and lodging?

The main difference between subletting and lodging is the exclusivity of usage. 

Subletting enables the subtenant to have exclusive use of the space they are renting, whether a room or an entire property. The landlord would need to have permission to enter the room or building.

A lodger is a person who rents a room, but the landlord can enter the room without permission. This is often the case to provide services such as cleaning.

Another difference is that the lodger rents the room from the landlord (“head landlord”), while a subtenant rents from the original tenant.  

What is rent to rent? 

Rent to rent, also known as guaranteed rent, is when an individual or a company rents a property from the owner for a period of time and guarantees to pay the landlord a fixed rent. 

The landlord consents that the renter can rent the property to other tenants, and the renter is liable for the rent, regardless of whether the property is occupied.

Usually, the renter makes improvements to the property and then sublets it for more than they are paying the landlord, thus making a profit. Like shared ownerships, guaranteed rent allows individuals to enter the property market in some capacity.

Guaranteed rent can be mutually beneficial because landlords get rental payment security, and the renter can make a profit. 

Sometimes, however, problems can arise, such as an unclear understanding of responsibilities regarding maintaining the property and the property not meeting basic compliance requirements. 

Can a landlord refuse to sublet? 

Yes. However, if a landlord does not wish to consider subletting, it must be stated clearly in the tenancy agreement that subletting is not allowed. 

If the tenancy agreement says that subletting is allowed with the landlord’s permission and a tenant approaches a landlord to ask permission to sublet, the landlord must have a valid reason to refuse. For example, subletting would invalidate the insurance contract, or the mortgage lender will not allow it.

This is why it’s essential that the tenancy agreement clearly and unambiguously states what is and is not allowed in terms of subletting.

What happens if you get caught subletting?

If a tenant unlawfully sublets a property or part of a property, the landlord has legal grounds to take legal action and begin the eviction process. However, it might be worthwhile engaging in a discussion with the original tenant first to try and find a solution.

If the landlord deems it necessary to proceed with eviction, the process will depend on the type of tenancy agreement. Usually, it begins with the landlord issuing the tenant a written notice. When this expires, the landlord applies to the county court for a possession order.

The landlord would also need to report any cases of illegal subletting to the local authority, who would need to investigate if the tenant receives benefits such as Universal Credit.

If there is any suspicion of criminal activity connected to the property, the police must be informed. 

How to prove illegal subletting

Regular property inspections can help identify and deter subletting. However, some landlords and housing associations go a step further, involving private investigators to monitor tenants and confirm their subletting suspicions.

What are the risks and benefits of subletting? 

Subletting comes with pros and cons. These depend on individual circumstances, and landlords should use discretion when deciding whether or not to allow a sublet.

What are the benefits of subletting?

Subletting can be useful for the landlord, as it could help ensure that they receive rental payments in full each month. One of the most common reasons tenants want to sublet is to support their own financial situation. If they’re struggling to pay their rent on time, subletting might help.

Subletting could also benefit landlords by securing long-term occupation of a property. Consider the scenario where a long-term tenant needs to be abroad for a few months for work but would prefer to retain their tenancy in their current accommodation. Allowing a short-term sublet would mean that both the tenant and landlord can keep their agreement, but the tenant can cover the rental cost while they’re away.

In some cases, a subtenant can become a reliable primary tenant. This could happen if the original tenant wants to move out and the subtenant wants to stay on and therefore takes over the tenancy agreement with the landlord.

What are the risks of subletting?

There are, of course, downsides to subletting, and it can be risky for landlords to allow it. 

Many mortgage lenders and insurance providers don’t allow subletting, and breaching this agreement could result in an insurance policy being voided or a mortgage being revoked. 

And because the sublease agreement is between the tenant and the subtenant, the landlord needs to rely on the tenant to ensure the subtenant adheres to the lease agreement terms and conditions. This also means the landlord has less control over their own property.   

In summary: What is subletting an apartment?

Subletting is when a tenant rents out part or the whole of a property which they themselves are renting from a landlord. 

For a sublet to be legal, the tenant needs to act in accordance with what is outlined in the tenancy agreement. Generally, if allowed, the tenant will need permission from the landlord before entering into a subletting agreement with a subtenant.

However, if a tenant sublets a property without the landlord’s permission or despite the tenancy agreement stating that it’s not allowed, the subletting is unlawful, and the landlord can evict the tenant.

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