Unwanted Subletting...

If you live in Norfolk, you may have seen an article in the EDP recently about the horrified landlord who spotted their rented property being advertised on Booking.com as a holiday let. In case you missed it, you can here to read the article.

Gary Leverett, a senior solicitor in our Litigation department, looks at how landlords can prevent something like this happening in the first place - and what to you do if an unwanted sublet takes place...

If your tenancy agreement is silent on the issue, then your tenant will be free to assign or sublet the property to anyone they like. A blanket ban in the tenancy agreement would probably fall foul of Office for Fair Trading guidance. However, allowing the tenant to assign or sublet with consent that is not to be unreasonably withheld would be an acceptable term.  You could also consider a clause prohibiting any assignment or subletting for a minimum period at the start of the tenancy.

So what happens if your assured shorthold tenancy agreement includes the relevant clauses but despite this, you discover that your property is being let on AirBnB, Booking.com or similar online sites?

The tenant only has the protection of the Housing Act 1988 if they live in the property as their main or only residence. If they rent the property out as a whole as a holiday let, then they are not residing at the premises and, therefore, do not have the protection of the Act. In this case, you can serve notice under 146 of the Landlord and Tenant Act 1925 that they are in breach of the terms of the tenancy agreement and such a breach is not capable of being rectified. If at the time the property is unoccupied (and you must be 100% sure of this) you could then peacefully re-enter the property to change the locks and forfeit the lease (ie bring it to an end) on that basis.  

Be warned - this is a fairly risky procedure because if you get it wrong and your tenant is actually occupying the premises as their main residence, you fall foul of the Protection Against Eviction Act 1977 and you could be guilty of a criminal offence and liable for substantial damages.

Instead of changing the locks, the safest way forward would be to commence proceedings to forfeit the lease and gain possession. That is, unless the tenant applies for ‘relief against forfeiture’ - which will only be successful if they can convince the court that they will not breach the terms of the tenancy agreement by subletting the property, save under the terms of the tenancy, ie by getting your consent before doing so.

Once you have possession of the property, you would not be able to remove your tenant’s possessions and would need to give them opportunity to collect their possessions. You can give a notice under Section 12 of the Torts (Interference with Goods) Act 1977, imposing an obligation on the former tenant to collect their goods.  If they do not collect within the timeframe given (usually 28-30 days), you are then entitled to remove the goods and sell them, although you must account to your former tenant for the sale proceeds, less your costs of selling them at auction. 

Where your tenant lets the property as a dwelling but does not obtain your prior consent/permission as required under the terms of your tenancy agreement, it is unlawful to affect forfeiture without a court order where any person is lawfully residing in the premises or part of them. In this case, the subtenant would be deemed to be lawfully residing in the premises because he does so with the permission of the tenant even though, in this case, the tenant has breached the terms of the tenancy by letting the premises.

If you wish to terminate the tenancy in this case, you must follow the normal procedure under Section 8 of the Housing Act 1988. You would serve a two-week notice that your tenant has been breaching the terms of the lease against subletting without your permission. As the sublet has not been lawfully granted under the terms of the tenancy agreement, the subtenant will not have any protection and once the Head Lease (ie the tenancy agreement between you and your tenant) is determined (ie ended), this will also bring the sub tenancy to an end.  

What do you do if your tenant asks for consent to sublet? If it is on the basis of letting under AirBnB or Booking.com or any other such short holiday let, then you will probably be held to be acting reasonably if consent is not given, bearing in mind the potential disruption that such holiday lets can caused to your neighbours. However, if your tenant is asking for permission to let the premises to a sub tenant as a dwelling, and not a holiday let, then I believe that if you refuse consent in this case, you would be acting unreasonably, so consent would need to be given. In this case, as the sublet has been lawfully granted, if you determine the tenancy with your own tenant, your sub tenant then becomes your own tenant and to evict them you must comply with the procedures of the Housing Act 1988.  

It is, therefore, extremely important that you know to whom you are letting a property - and to make sure that, when letting the property on an assured shorthold tenancy, your tenant intends to live in the property as their main or only residential property and not with the intention of subletting and profiting from subletting the property to your detriment.

If you have a similar problem or any other letting problem then you can contact Gary Leverett, who specialises in property litigation disputes, by phone on 01603 724654 or by email at gsleverett@cozens-hardy.com.