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Should Landlords Consider Switching Letting Agents Due to Sub-Letting?

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Letting agents make life a good deal easier for landlords in the majority of cases, especially proactive ones who get to know the tenants well and deal with problems before they arise. But not all letting agents in the south east are as on top of tenant-related issues as you might think.

For any landlords operating in the Portsmouth area, with its considerable student population, the turnover of tenancies can be hard to keep on top of. In such cases, a professional and responsible letting agent can be worth their weight in gold, particularly when it comes to tenancy audits.

This advice comes in the light of new findings published by the National Landlords Association (NLA), a body which seeks to create better relationships between landlords, tenants and agents. According to their announcement in November 2015, nearly half of tenants who are choosing to sub-let their property are doing so without the consent of their landlord and, in many cases, without informing their letting agency. This represents a significant number of tenants who are acting irresponsibly given that the government has also recently set out its proposals to introduce minimum room sizes, specifically to crack down on overcrowding issues and overly cramped living conditions. The last thing that responsible landlords want is to be landed in hot water because their tenants have been sub-letting without permission and because their chosen agents have failed to keep a close eye on what is going on at a property.

To be clear, sub-letting itself is not illegal or wrong, depending on the exact wording of your tenancy agreement, but sub-letting without permission can cause significant problems for landlords. According to the NLA's research, in the region of one third of tenants, some 32 per cent, have approached their landlord about the possibility of sub-letting their property or made a written request to do so. Indeed, the findings state that over a fifth - or 22 per cent to be exact - of these requests were found to be entirely reasonable and were therefore permitted by the landlord.

Problems arise for landlords when permission is not sought. Although this can sometimes be down to ignorance, it is often due to tenants not wanting landlords to know who is living in a property for whatever reason. Just like any activity that might be going on in your property that is undesirable, the only way you can deal in a proactive way with it is to get to know about it in the first place. This is achieved by gaining closer ties between the professional letting agents and the tenant. Not only can it help to identify unsanctioned sub-letting, but discover a range of wider issues. In short, the more visible the agent is, the less likely the occurrence of problems like sub-letting will be.

Headaches caused by sub-letting behind the backs of landlords is an issue that is certainly worth considering when selecting a letting agent. In areas like Fareham and Southsea, just like other parts of the UK, around 11 per cent of rented properties are - in part, at least - sub-let by tenants, so it could easily be going on in one of your properties right now. Around half of this number fail to ask permission, or do so and then proceed anyway, even if permission has been declined.

\"This is not an apparently harmless activity,\" said Carolyn Uphill, Chairman of the NLA. \"It is not akin to putting your flat on AirBnB while going away on holiday. We are talking about individuals who are seeking to deceive their landlord.\" Uphill went on to say that undiscovered sub-letting not only increases the costs for the often unwitting sub-tenants, but it can also impact on several legal rights and, in some cases, reduce security of tenure. \"This is being done at the expense of proper property management standards to maximise personal gains... and at the risk of others,\" she added.

Landlords can take steps to protect themselves from the often undesirable outcomes of sub-letting which is being conducted without proper permission. Firstly, finding out about such activity helps. This means auditing tenancies regularly and thoroughly. It is in this area that good letting agents really come into their own. Landlords rarely have the time to check up on their tenants, especially ones who are acting in a deliberately deceptive way, but agents have more telephone and face-to-face contact and all this helps build up a picture of who is living in a property, regardless of what the paperwork actually says. For landlords who feel their agents are not offering this sort of service, perhaps a switch is in order?

In addition, it should be said that landlords ought to check on the clauses of their tenancy agreement, something that is often - but not always - supplied by letting professionals. The NLA advise that all new tenancies should include a clause which makes it clear that sub-letting can only be conducted under certain conditions, including the permission of the landlord. So long as permission, when sought, is not unreasonably withheld, this ought to reduce landlords' exposure to a many avoidable business risks, including court fines and even custodial sentences, in the worst case scenarios.

Uphill also warned that sub-letting can even breach the terms of many buy-to-let mortgages. Moreover, this activity can affect the conditions which are often attached to licenses granted for letting out houses of multiple occupation (HMOs). Sub-letting without permission, whether in HMOs or not, may even invalidate the insurance policies landlords are obliged to have in place. \"Landlords must be aware of the problems sub-letting presents,\" she said.

Source: http://www.landlords.org.uk/news-campaigns/news/half-tenant-subletting-occurs-behind-landlords%E2%80%99-backs