The Rise of Illegal Subletters

September 26th, 2013 - No Comments

A few days ago we picked up on This Is Money’s article on the Rise of the ‘ghost resident’, which states that 3.3m people in rented properties are living illegally in sub-let rooms to avoid rising rents.

The article is based on survey of letting agents carried out by Direct Line, which found that: ‘as many as one in 10 rental homes may be home to unofficial tenants.’

Whilst the perpetrators describe this as a ‘victim-less crime’ we’d have to disagree. This can prove a nightmare scenario for landlords, as insurance policies and buildings cover can be invalidated if multiple occupants are living in a property but not listed on the tenancy agreement.

Recently at Helpland we have seen a large increase of instructions from landlords who have found their properties sub-let without their permission. Some tenants have paid their deposit and first month’s rent, and then unbeknownst to the landlord, have advertised the property for rent at a higher rate and portrayed themselves as the landlord to the prospective tenants.

As well as receiving rent for a property they are not entitled to, the tenants are not paying the landlord their due rent causing the landlords severe financial difficulties. We are finding that these types of tenants are aiming for a quick cash injection by not paying their rent, and withholding the landlords rent, before absconding – leaving the landlord out of pocket and with tenants living in their property who they haven’t authorised.

Our advice to landlords is to do their due diligence when taking on a new tenant:

  • SEEK LAST 3 MONTHS BANK STATEMENTS
  • PREVIOUS LANDLORDS REFERENCE
  • EMPLOYMENT REFERENCE

By thoroughly vetting your prospective tenant, you are limiting the possibly of falling victim to an illegal subletter.