Back in September we ran an article warning of the dangers of tenants sub-letting your property without your knowledge. But are there circumstances when sub-letting would be all right? If so, how should you go about it?

Our September article focussed on the impact that the Right to Rent laws had had on sub-letting. The key point was that you, as the landlord, could be held responsible for undocumented immigrants staying in your property.

That would be the case even if you knew nothing about it, because your tenants had sub-let without your authority.

Authorised sub-letting

But sub-letting doesn't always have to be bad. Let's say you have an HMO it's a nightmare managing multiple tenants coming and going. You might consider allowing one long-term tenant to manage the other rooms. He or she can get the other tenants in and perhaps they'll be more likely to select tenants they get along with, so they might stay for longer.

Another option might be when a good, long-term tenant has to go away for an extended period, perhaps travelling or for work. Allowing them to sub-let to a friend gives you (and your tenant) continuity of letting and it's more likely that you won't lose your good tenant.

Letting guests stay

Perhaps your tenant wants to give house room to a friend or family member who's moving into the area.

It could simply be that you have an excellent tenant but they're struggling to pay the bills. Allowing them to make short term sub-lets through Airbnb or other websites allows you to keep them.

What do you have to do?

If you have a good reason to allow sub-letting, you need to do it safely.

First check with your mortgage provider. Many will not allow sub-letting, some will as long as you keep them informed. But if they refuse point-blank, that's the end of the road.

Assuming that's ok, or you don't have a mortgage (in 2016 the UK Council of Mortgage Lenders found that nearly half landlords surveyed owned their rental properties outright) then you need to put paperwork in place.

Change the contract

Most of the work will be in making up a new tenancy agreement as the current one is unlikely to allow sub-letting. It should make clear who takes liability for any damage, Right to Rent transgressions, unpaid rent or other problems caused by any sub-let tenants.

You might also want to introduce a time limit for the new contract, depending on the circumstances. That gives a break point where you or the tenant can reconsider if the arrangement is working. A separate, additional deposit is worth considering too, just to put your mind at rest. This can be returned at the end of the sub-letting period.

Check your insurance

Finally, you need to make sure your insurance allows sub-letting. If not (and it is unusual), then you will have to change your policy or, probably better, insist in the new contract that your tenant gets their own insurance.

There is quite a bit of work to do, but the key message is that sub-letting shouldn't be rejected out-of-hand - just be careful about how you do it.

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