Landlords and Tenants Warned About the Consequences of Subletting

A survey by insurer Direct Line Business has revealed that up to a quarter of tenants may be subletting their homes – without their landlord’s consent in half of cases.

Landlords and tenants are being warned that doing so could lead to a hefty fine for them both, if the move puts them in breach of regulations relating to houses in multiple occupation (HMOs).

HMOs are rented properties occupied by three or more people who are not related. Renting a property as an HMO means landlords have to follow stricter rules around issues such as fire safety.

Some local councils require HMOs with three or more tenants to be licensed – known as additional licensing schemes. HMOs in England with five or more tenants fall under mandatory licensing schemes.

Issues arise if subletting increases the number of occupants in a property, turning it into an HMO or making an existing HMO liable for mandatory licensing. This can happen if a tenant merely offers a spare room to a friend for a period and charges rent.

Even if the landlord does not know the home is being sublet, they could be in breach of the Housing Act 2004. Managing an unlicensed HMO can lead to fines of up to £15,000. In addition, landlords who breach safety regulations in HMOs could be liable for fines of £50,000 or more. Tenants named on the tenancy agreement, and who collect rent from someone who is subletting, can also be liable.

Landlords who become aware of subletting in their rental properties are urged to get proper advice as soon as possible.

Read more about this story on the Property Wire website.

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