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Nov 17 2023

Secret subletting among tenants

Airbnb, a platform specialising in short-term rentals, has sparked controversy within the private rented sector by encouraging tenants to lease out their spare rooms. A previously conducted survey by Airbnb, now removed from their website, revealed that 80% of tenants seek additional income due to the escalating cost of living, proposing subletting as a viable solution. The platform even suggested potential benefits for landlords, such as reducing the risk of rent arrears.

However, experts in the private rented sector have emphasised the substantial risks associated with subletting for landlords. There is a potential risk of inadvertently converting a property into a House in Multiple Occupation (HMO) if at least three individuals from distinct households are residing there. Violating HMO regulations holds landlords liable, constituting a “strict liability” offense, even if they were unaware of the subletting activity.

How prevalent is this issue?

According to Direct Line, an insurance provider, 13% of tenants confess to subletting part or all of their homes. Only about half of them informed their landlords about their actions, and less than a quarter read their tenancy agreements for permission.

This lack of transparency can catch landlords off guard, exemplified by cases like Fiona Wyllie’s. After a neighbor’s alert, she found out that her £2,200-per-month London flat was being listed on Airbnb for £280 per night.

The permissibility of subletting depends on various factors:

  1. If the tenancy agreement addresses subletting, whether to allow or prohibit it, that stipulation takes precedence. If the agreement mandates tenant approval, landlords cannot unreasonably deny permission.
  2. In the absence of a subletting clause in a fixed-term tenancy agreement, tenants can sublet without the landlord’s consent.
  3. If there is no subletting provision in a periodic tenancy agreement, tenants must seek landlord permission, which can be refused without specific cause.

The information in this post is valid to the best of our knowledge on the date of posting. It is advised that you seek independent advice based on your individual circumstances. 

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