Subletting: What you need to know
Subletting is when a tenant who is renting a property then rents part, or all, of that property to another person.
Whether you are a tenant looking to let out a room in your rented house, a landlord navigating the legalities of the comings and goings in the student flat share you rent out, or a potential subletter looking to understand your rights, there’s lots to know about the world of subletting!
Why do people sublet?
For tenants, subletting might be handy for a number of reasons. If you travel a lot for work and want to keep expenses down whilst you are away, find your financial situation has changed and need a little help making rent, or if you need to leave your rented property before the end of your contract, subletting could be a great solution.
But before you start advertising for sub-tenants, it’s important to know if your tenancy allows for subletters and what responsibilities you would take on as a sub-landlord.
For landlords, subletting might seem like an unnecessary hassle, with greater peace of mind to be gained from knowing trusted tenants are at your property. However, it can be a great (and profitable) solution for both yourself and your tenant to problems such as a change in their circumstances.
And even if you’re not keen on subletters, it’s not always as simple as refusing permission for your tenant to sublet, which is why ensuring your tenancy contract covers subletting permissions is so important. Especially as it can also affect things like your insurance and mortgage agreements, with some providers not allowing for subletters at all.
And if you are about to enter a sublet as a sub-tenant, it’s important that you understand your rights too!
A good relationship between landlord and tenants is essential in any kind of tenancy, and when it comes to subletting it’s important that everyone is on the same page about what is permitted and that any sublet agreement works well for, and protects, the tenant, landlord and the subletter, too.
Tenants, does your tenancy agreement allow subletting?
Whether or not you can ask to sublet your room as a tenant depends on the kind of contract you have.
Assured tenants and assured shorthold tenancies:
- Assured tenants are mainly housing association tenants where the tenancy began on or after 15 January 1989
- Assured shorthold tenancies are fixed-term contracts. They are the most common type of tenancy when renting from a private landlord or estate agent. If the tenancy started after 28th February 1997, rent is paid directly to a private landlord and you don’t share the accommodation with the landlord, the tenancy is most likely an assured shorthold
Whether assured and assured shorthold tenants can sublet their homes will depend on the terms of your tenancy agreement.
If your agreement has a clause about subletting that says that you need your landlord’s consent to sublet, then the landlord can’t refuse you permission to do so if the request is reasonable. If there isn’t a clause about subletting in your contract, then the rules will vary depending on if you have a fixed term or periodic tenancy.
With periodic tenancies that don’t have a subletting clause, you won’t be able to sublet without your landlord’s permission, and they can refuse without needing to give a reason for doing so. But with a fixed term tenancy, if there’s nothing about subletting in your contract then you are within your rights to sublet, and you don’t even need your landlord’s consent to do so.
Other types of tenancies have other rules, so if you know that you are going to want to sublet when you move into a property, it’s key that you read the fine print in the contract before signing on the dotted line! If you don’t have permission from your landlord and sublet anyway, you could find yourself facing eviction, or even a criminal prosecution.
Is subletting the right thing for you as a landlord?
As a landlord, whether the idea of subletters in your property fills you with dread or is no big deal will be a personal thing. But it’s important that you are clear on your position before letting your property, as landlords cannot retrospectively stop their tenants subletting, this is a decision you need to make prior to letting out your property, including a specific clause in the tenancy agreement forbidding subletting.
Another thing to consider is if the terms of your insurance and mortgage providers allow for subletting, as in some cases your contract could be voided if you enter a sublet without their permission. This is really not something you want to discover when you need to make a claim!
If you don’t allow for subletting and your tenant finds themselves in a difficult financial situation where they can’t make rent – something that is becoming more common with the current cost-of-living crisis – you will also be financially impacted and, depending on their situation, you may or may not be able to take immediate action to recoup rent arrears or evict the tenant. If you have Rent Guarantee Insurance, this is something that you can rely on this situation.
However, if you don’t have RGI, allowing for the possibility of subletting could help your tenant make the rent, allowing the steady income from your property to continue whilst a trusted tenant takes responsibility for the subletter. Something not to be sniffed at in these financially unstable times!
Reference checking the subletter, ensuring your tenant provides a signed sub-tenancy agreement and deposit, and agreeing on regular property inspections are great ways to continue to protect your property whilst your tenant sublets.
However, if you decide against allowing subletting and your tenant does it anyway, you are well within your rights to take legal action for breach of contract.
Who is responsible for the sub-tenant during a sublet?
The subtenant is the responsibility of the tenant they are renting from – sometimes called the sub-landlord – who will need to try and deal with any problems arising from the sublet.
However, landlords need to be careful to avoid a legal relationship with the sub-tenant to make sure that they remain the responsibility of the sub-landlord.
As a landlord, you need to ensure that rent goes through the sub-landlord, not directly to you, and that you don’t link yourself to the subtenant legally in any other ways.
Pettyson’s say: ‘Providing you don’t do anything that will tie you to the sub-tenant, they will be the responsibility of your tenant – the original person you let the property to. This makes them your tenant’s lodger and nothing more. While they will still have lodger’s rights, these will be actionable against the tenant, who effectively becomes the sub-tenant’s landlord in relation to the sublet.’
What do you need to know as a subletter?
During these times of intense competition in the rental market, subletting might provide some stability whilst you continue to look for a rental of your own, and who knows, it could even turn into a permanent arrangement.
As a subletter, your landlord – sometimes called the sub-landlord – is also the main tenant of the owner of the property you will be living in. Whether your sub-landlord is living at the property with you, or subletting to you whilst they are away, they remain responsible for managing your tenancy whilst you are at the property.
It is important to sign a sub-lease contract with your sub-landlord, and as with any other kind of tenancy, the type of agreement you sign will impact your rights.
As a subletter, your sub-landlord will be responsible for paying your rent on to the head-landlord, as well as for reporting any repairs that need fixing, and for ensuring they act within the terms of their own tenancy agreement.
It’s important that you know that the sub-landlord has permission to sublet to you, as if they don’t you could both find yourselves being legally evicted by the main landlord.
What are the benefits and drawbacks of subletting?
As a landlord, the decision to allow subletting will be a personal one, and tenancy agreements need to state what is and isn’t permitted from the start of your tenant’s contract. If they don’t, you might find yourself without the right to say no to subletters later down the line.
For tenants, subletting could provide much needed financial relief or a useful way to move on from a property before their contract ends. But it’s imperative that you act within the terms of your tenancy and seek permission from your landlord to remain on the right side of the law when it comes to subletting.
For renters, the competition for rental properties at the moment might make subletting an attractive stop-gap option, and, if it goes well, could even lead to a permanent home.
For both landlords and tenants, subletting can be a really useful option to ensure that rent can continue to be met during difficult times, so it’s certainly worth carefully considering if it is the right choice for you!