Sub-letting occurs when the “official” tenant of a property allows someone else to live there, whether or not the original tenant moves out.
Diligent landlords need to know who is living in their property. Depending on the type of tenancy in place (and the terms of any written agreement) sub-letting may be (a) permitted, (b) dependant on the landlord’s consent or (c) prohibited entirely. The type of tenancy and the terms of any agreement will also determine whether the landlord can unreasonably deny consent where permission to sub-let is sought by the tenant(s).
i. Sub-letting of the whole property is prohibited in secure tenancies and can leave the (original) tenant at risk of losing his/her security of tenure and of being evicted. Tenants of social housing also commit an offence if they knowingly or dishonestly sub-let the whole property in breach of their tenancy agreement.
ii. During the fixed term of an assured tenancy subletting is permitted unless there is an express prohibition in the tenancy agreement.
iii. A term is implied into every assured tenancy (whether or not shorthold) that where the landlord’s consent is required for sub-letting, such consent will not be unreasonably withheld.
iv. With two key exceptions, a term is implied into every periodic tenancy that subletting without the landlord’s consent is prohibited; the landlord’s refusal need not be reasonable. The exceptions apply to contractual assured periodic tenancies (e.g. not arising automatically at the end of a fixed term tenancy) in which:
- There is an express term in the tenancy agreement which permits or prohibits sub-letting (with or without consent) or
- The tenant was required to pay a premium greater than one-sixth of the annual rent when the tenancy was granted; for example a tenancy deposit to that value.
Where the above exceptions apply, then:
- Where the tenancy agreement contains an absolute ban on sub-letting, it is not allowed.
- Where the tenancy agreement allows subletting without consent, it continues to be permitted.
- Where the tenancy agreement provides for conditional permission (for example if subletting is prohibited without consent then the landlord’s permission must not be unreasonably withheld.
The above provisions are clearly complex and will be particularly significant when/if a landlord seeks to recover possession of a property.