Tips & Tricks on SUBLETTING in London

What is Subletting in the first place?

Subletting is a complicated area and can be a real catch-22 so before we go think twice if you really want to get into this vicious cycle in the first place.

In one sentence sublet is the practice of a tenant letting out a part of a rented property to another tenant. Rather than paying rent to the landlord, the subtenant pays to the already accommodated tenant (sometimes known as the mesne landlord) who then pays to the landlord. But if the landlord hasn’t agreed to or have no idea about the ongoing deal it is considered as illegal sublet and may get you into a rather unpleasant situation (even the danger of evection can be considered a minor problem since according to the law the jail is also a possible outcome).

Have in mind that subletting social housing is indeed a criminal offence, punishable by hefty fines and prison sentences of up to two years.

If you think that going away for a few months, while a friend of yours stays in your room is a solid reason to sublet you’re totally wrong and yes, this would technically make you a criminal in the eyes of the law at least.

Another common reason for illegal subletting is if you’re bound by your contact and your landlord doesn’t seem interested to end your agreement. Then often subletting is the only option left on the table, especially if you’re switching towns.

Even though paying rent is basically paying someone else’s mortgage and there shouldn’t be difference who exactly gives the money - you or your sublet - the landlords still are in their right to be uppity. At the end of the day to see your home ripped apart is definitely not part of the initial deal you’ve both agreed on.

Even though subletting looks like a win-win-win situation in which everybody simply has to be happy – you’re expenses lower, someone’s just found a place to crash and your landlord gets the rent with no delay, there’s still a lot more to the picture then you can see at first sight.

The first thing you should do before even thing of subletting is to read your tenancy agreement and what your lease has to say about it. Some leases expressly forbid subletting of any kind and under any conditions. Although under many leases subletting is perfectly acceptable since it meets some additional requirements, if your pre-signed agreement is queerly quit about this option it’s best to check with your landlord first.

There's a difference between subletter and lodger

It’s good to know the difference between subletter and lodger. Even there’s a pretty thin line between those two, the main difference is that a subtenant must have exclusive use of at least one room, while a lodger can’t actually prevent the landlord from entering their room but at least may receive some additional services such as meals or laundry, depending on their contract.

Even though sometimes having a lodger can be classified as subletting, especially if you draw up a tenancy agreement and give them specific rights over parts of the flat, (such as their room), the law doesn't quite agree with this scenario.

This situation is legally known as “alienation”, (in other words it is considered as transferring the ownership of the property rights) since you have sublet part of the property and many leases do not allow this in any form.

The out-buildings and can you sublett them

If you think that subletting your rented garage, parking space or whatever else comes together with the property is somehow different, you’re wrong again. The truth is that the alienation clause does also apply to any out-buildings which may be included within the demise of your lease.

Even though you might have a parking space without owning a vehicle on your own the only time when a subletting may be permissible is if there is a separate lease on this concrete out-building. If that’s the case have in mind that you still have to carefully get through your whole tenancy agreement to check what it states precisely.

The size DOES matter

No matter what your girlfriend has to say about it, the size always matters. The size of your home limits the number of people you can let it to. This one applies to your landlord as well. Actually, there’s a certain landlord registration scheme in most of London’s boroughs where they will assess the place and grant a licence to let to a certain size of the family.

For example, if we’re talking about 2 double bedrooms flat, it can be let to maximum a family of 4. There’s more – if one of the bedrooms is smaller and doesn’t meet the certain criteria the flat can offer accommodation to no more than 3 people at once.

The ugly truth is that the rules around buying property are very different to those considering letting it out but as we all know life is unfair and there’s nothing you can do about it…

The Sublet Contract and what it should mandatory include

If you and your landlord have agreed upon the whole subletting experience here’s a list of the essential things that a proper sublet contract should include:

How much rent is due, including any increases that may arise (those are called escalations)?

How long the tenancy lasts (also known as the term of the rent) when it begins and under what conditions you can renew or break it?

How you will proceed with the utilities – phones, electricity, water, gas etc. - are those part of the tenancy or are set to be paid separately?

Who is responsible for all property maintenance repairs, expenses, taxes and insurance costs and how they’ll be calculated?

What is the exact amount of the tenancy deposit (if there’s such - which we strongly advise to) and can a letter of credit be eligible instead of cash?

List containing the detailed description of the housing: square footage, parking spots, and all other amenities.

Contain a non-disturbance agreement in case the landlord sells the property, or his lender forecloses it.

Remember that landlord or not if you get some kind of additional outcome and you may need to pay tax on it. It is always wise to take professional advice on this. One more thing - lawfully you can’t sublet all your home. If you do, this means that you lose your status as a secure tenant and your landlord can evict you in no time.

Let's talk about Airbnb

We’re all familiar with the most popular platform for short term holiday lets but far not everybody knows the problems which this "innocent" site can drag you in.

In the past years, the numbers of landlords who are launching possession proceedings against tenants who have sublet their property without permission are rapidly growing. So try your best to not be part of this unpleasant statistic.

The 2016 tribunal case (Nemcova vs Fairfield), ruled that these short term lets are a breach of lease since the leaseholder was technically running a business from the premises and according to the law you simply don’t have that right when you’re not the owner yourself.

Now you know why you can’t accommodate the property in any hostel style arrangements.

Legally, the only Airbnb hosts who are not breaching any contractual obligations are the initial owners of the property and there are no exceptions.

There's more. Actually, all of the citizens of London are forbidden from using their home to provide temporary sleeping accommodation for paying guests for more than 90 days in each calendar year.

Bend it or break it - when it comes to Subletting it's all up to you

You’ve weighed the pros and cons and you’re ready to get into the shoes of a criminal well then we offer you a simple list, which will at least try to stop you from doing one of the biggest mistakes when it comes to subletting, especially if you want to stay under the radar.

Don’t ring the alarm
If you intend to stay low it’s best not to advertise your flat on platforms like Gumtree or Spareroom, we are pretty sure that you’ll find alternative ways to find a sublet on your own.

Do your homework
Before letting anyone stay at your apartment assure that you know at least something about this friendly stranger. Spend some time together over a beer or a cup of coffee and don’t underestimate his or her Facebook feed as well. After all, if your future unannounced roomie smashes the place you’re the one who’s paying for it.

Pay a visit
Before letting anyone stay at your apartment assure that you know at least something about this friendly stranger. Spend some time together over a beer or a cup of coffee and don’t underestimate his or her Facebook feed as well. After all, if your future unannounced roomie smashes the place you’re the one who’s paying for it.

Know your rights well
In Britain, one of the landlords’ obligations is to give you at least a 24 hours’ notice before entering into the rented property, which gives you and your illegal subletter just the right amount of time to hide any evidence that someone lives there unannounced. It can be harder than it sounds though because you’ll have to get rid of any personal belongings – clothes, pictures etc. (don’t forget the extra toothbrush) in order not to arouse any suspicions.

Stay on the same page
It’s strongly advisable for you and your subletter to have some sort of background cover story ready in case something went wrong. Keep it simple and don’t overcomplicate it – the narrative doesn’t have to be long, descriptive or involve a Mike Tyson’s tiger in it. Your subletter may be in the role of your cousin, college friend or just anyone who simply pays a visit for a couple of days. Whatever works – just try to sound convincing and be as easygoing as possible.

Time to switch sides or how a landlord can deal with the illedall subletting?

The wuestion of the day should be - what can you do if you find out that your tenant is illegally subletting on Airbnb (or elsewhere) and how can you prevent this from happening?

In the majority of cases, the landlords don’t even know their tenant is subletting. The following will help prevent this from happening altogether, or will at least aid discovering the arrangement sooner rather than later…

Use your right to carry out regular property inspections. This will make your tenants think twice before breaking your agreement and the law altogether.

Be friendly, especially with the neighbours. Make sure they have your contact number and stay for an afternoon tea for once in a while to catch up with “the news”.

Put a clause in your tenancy agreement which forbids sub-letting – if your tenant ignores it, you have grounds for a Section 8. Have in might that if you skip that part and there is no clause to requests your written consent and prohibit sub-letting, your tenant might see that as a green light so it’s in your best interest to not leave this one out.

Let’s talk about money. You shouldn’t charge extra fees or deposit which would amount to more than 1/6th of the annual rent. These payments are called a Premium and give your tenant the right to assign the tenancy to another person without your permission.

To act like a decent human being always pays back. Develop a good relationship with your tenants and assure that they can talk directly if they’re experiencing some sort of financial difficulties at the moment. It’s better to come up with a solution together instead of learning that they were left with no other option than subletting when its already too late.

Do thorough tenant referencing. We strongly advise every landlord to thoroughly referencing their prospective tenants, before signing any sort of tenancy.

NB! - If you get to the point when evicting your tenant seems like the only thing that sound right to you, you can read our Eviction Guide for Landlords renting in London.

The "Rent to Rent" scheme and could it work for you

After we've been through the both sides of the story, let’s try to somehow meet in the middle or in other words let us introduce The “Rent to rent” scheme and try to explain how it works.

“Rent to rent” is a simple concept which grows in popularity. In theory, it sounds rather appealing – the landlord gives its permission to the tenant to offer all the rooms in the property to subtenants who are into the idea of a shared household.

Often a part of agreement involves the initial tenant to look after the rented place, take care of maintenance issues and in some cases, even carry out a refurbishment on the property.

This way the landlord has a guaranteed amount of rent for a set period of time (even though often the paycheck is below the set market price), the tenants on the other hand makes extra profit since he or she lets the rooms on higher price than the whole apartment is worth, and the subletters are generally happy because of the fair deal.

We’re not here to judge and if this works for you, you won’t be the only one using the scheme, still, think twice before getting into this type of foggy agreement just because of some extra cash.

Never forget that maintaining the property is among your strongest obligation so if you ever need a hand with this we will gladly help you to make the whole place sparkly again and brand as new if you need to get rid of all the evidence of unannounced tenants at once.

PS: Don’t forget that almost every borough of London has its own regulation when it comes to subletting. This is the one in Hackney for example.

Have you ever dealt with subletting as a tenant or as a landlord and what was your experience like? Let us know in the comment section below.