Subletting
The term 'subletting' refers to an existing tenant who lets all, or part of, a property to another party (referred to as a subtenant).
Subletting is a complicated legal area, but typically, whether subletting is permissible or not will depend on the tenancy agreement between the existing tenant and the landlord. Even if it is permissible, the tenant may need to obtain permission from the landlord.
The subtenant will pay rent to the tenant (often termed the mesne landlord), and they in turn will pay rent to the ‘head landlord'. The tenant may charge a higher rent than they are paying to the landlord, thereby earning a profit margin. However, subletting means that the tenant is forfeiting their right to possession as the subtenant would have use of the property (or part of it) and would only be able to enter the property (or part of it) with permission of the subtenant.
The original tenancy agreement may also set conditions for any sublet. For example, if a tenant’s contract expires it may mean that the sublet also expires.
If permission to sublet is not sought or given, but the tenant proceeds, the landlord may be entitled to take legal action such as eviction proceedings. It may also be a criminal offence if a social housing tenant sublets a property unlawfully.
In recent years, increasing numbers of landlords have pursued possession proceedings against tenants after finding that they have sublet the property through sites such as Airbnb without permission.
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