Sub-letting, seemingly now known as Rent-to-Let within the lettings industry, which basically involves a tenant renting a property and then sub-letting it or a room within the house or apartment for a profit without their landlords consent, is on the rise reports Rushbrook & Rathbone.
Founding Director Sarah Rushbrook says: “It is no new phenomena or trend that is happening, but sub-letting is now becoming a lucrative business in today’s marketplace with some tenants renting a number of properties and then letting them out as rooms. It is an increasing problem, particularly in larger cities and university towns where many of the people subletting are foreign students who find these rooms through the internet. Unethical in every sense, these tenants pay no tax on the income they earn so as well as defrauding their landlord they are also defrauding the Inland Revenue.”
There isn’t unfortunately a lot that a landlord can do from a protection point of view but Sarah states that however difficult it is to avoid this situation, there are steps that can be taken which may deter scammers and landlords should be aware of these.
Sarah continues: “Landlords can help minimise the risk by being professional from the start. Any landlord should be confident that they have all the correct paperwork in place, including comprehensive tenant referencing and also a professionally compiled inventory and a full independent check in. Being thorough with checks from the outset can show potential scammers that everything is being performed and documented correctly, often discouraging them from taking any unethical actions.
Following this, there are definite signs to look out for so my advice is to follow your sixth sense. Look out for obvious signs including a single occupant renting a large property, is the tenant’s work address miles away from the property, was he renting before. Most rented properties that are sublet have more than one bedroom as tenants have the opportunity to let rooms out individually so landlords offering two or more bedrooms need to just bear this in mind.”
Finally, Sarah suggests that it’s a good idea to use the service of an experienced managing agent as they will help landlords to avoid this problem by ensuring that nothing is overlooked. “They will insist on regular property visits which will more than likely stop any sub-letting from taking place, and if visits are declined by the tenant time after time then the alarm will be raised.” Says Sarah.
“Despite these steps being taken, unfortunately current legislation is so determined to protect tenants from rogue landlords and agents, and quite rightly so, that it in no way considers the problems that tenant’s can create. As long as subletting is a civil offence and a landlord’s only redress is by claiming a breach through the courts there is not much deterrent for the scammers. There is unlikely to be any county court judgment as scammers will be scrupulous about paying the rent to the landlord. The worst that can happen is they have to hand the property back. Their actions will not be recorded or registered anywhere that future landlords can check so. This is why legislation needs to take into account the damage a ‘rogue’ tenant can cause, and why I urge landlords to take steps prior to entering an agreement to help avoid such a situation.”
Holly Addinall, PR for R & R – http://www.rushbrookrathbone.co.uk/