Landlord’s Illegal Subletting Scheme: £85,000 FINE!
Who is living in your rental property? No, really, do you actually know?
Today, we’ve got a sublet story for you, with a tenant – well, actually a LANDLORD, as it turns out – who was subletting a council property while living at home and renting out other properties – all resulting in a £85,000 fine.
Sounds complicated? Don’t worry, we’ll break it down for you.
What happened in Pimlico?
Way back in 2011, Mr Saeed Azimi, now 33, was given a socially rented flat in Lenthall House in Pimlico. A fantastic location! The flat was not only in zone 1, but also 250 metres from the riverbank – you don’t need us to tell you that this is prime, and expensive, real estate.
Which is probably why Mr Azimi rented it out to three different residents over the course of five years. But how was Mr Azimi able to do this? Where was HE living?
Well, Mr Azimi was living with his parents… and it wasn’t just the Pimlico property that he was renting out. He had three other properties that he was renting out too – Enfield, Tottenham, and Thamesmeade in South East London. It does appear that he was renting those out legitimately, rather than subletting, as he was doing with the Pimlico council flat.
Mr Azimi decided to apply to purchase the property under the Right to Buy scheme and this application was investigated by CAFS, Westminster Council’s Corporate Anti-Fraud Service, who uncovered the true story.
It is illegal for someone to sublet a council property, but is occurring often enough that Westminster City Council has a specialist team which tackles lettings abuses. In 2023, they successfully recovered 24 social housing properties from fraudsters.
Mr Azimi was given a nine month suspended sentence and as well as that £85,000 fine, he also had to pay £17,500 in costs.
As Councillor Heather Acton, Cabinet Member for Public Protection and Licensing, pointed out, Mr Azimi’s actions are particularly egregious because:
There is a national housing shortage. Social housing is much-needed to provide homes for our residents and this tenant has been deceitful in letting out his home. Subletting a council property is illegal. As well as being financially greedy, the tenant deprived another resident a home. Now this tenant’s fraudulent activity has been discovered, someone in genuine need on the waiting list will be given a place to call home.
What is subletting?
So that’s the sorry tale of Mr Azimi subletting his council flat – but what is subletting? Do you as a landlord need to worry about it?
While it is illegal to sublet a council property, it’s not illegal to sublet a privately rented property. However, you do need to give your tenant permission to do this.
Why would a tenant want to sublet?
- If they are regularly away, they might want to Airbnb the property to make a little more income
- They may need to move before the end of the contract and wish to sublet rather than break the contract
- They may want to sublet a room in the property to help them with the rent
Again, we need to reiterate that the tenant needs YOUR permission to do this. If it is prohibited in the tenancy agreement, then they cannot sublet and if they do so, you can take legal action against them to remove them from the property.
The issue here is that once your tenant sublets, you no longer know who is in your property. You might have referenced your tenant and feel secure in who you have rented to. You might even have taken out Rent Guarantee Insurance. But once your tenant sublets – with or without your permission – you no longer have that reassurance and, furthermore, you might find that your insurance is invalidated.
Making sure that you regularly check in with your tenants is key. If you have a busy life – with your family and your day job – working with a letting agent is key to ensuring that you’re not hoodwinked.
How is it different to Rent to Rent?
Rent to Rent, also known as Guaranteed Rent, has become quite popular over the last few years as a path to property ownership.
The idea is that a person, or a company, arranges with a landlord to take on a property for a certain period of time, they guarantee a fixed rent to the landlord for that time. They then rent out the property themselves, for more than they’re paying the landlord, in order to make a profit. For many, this profit is key to investing in their own properties in the future.
While this is, essentially, subletting, the difference is that the landlord knows and has the reassurance of a set rent for a set period of time, while someone else manages the property. So we can see why a landlord would be tempted.
However, at a time of rising costs, rent is also on the rise, so a Rent to Renter may struggle to make a profit when trying to pay the landlord and themselves.
If you are a landlord looking for a more reliable rental relationship, you should definitely consider working with a letting agency – they have access to hundreds, if not thousands, of tenants. They’re familiar with the industry, and can advise you on getting the most out of your property.
That’s everything you need to know about subletting. Have you ever had a tenant sub-let your property, would you? What about Rent to Rent? Is that something you’d try? Let us know in the comments below, or even in our private landlord community on Facebook to speak to thousands of other landlords and the Mashroom team!
