WARNING: Sublets ‘can cost landlords up to £80,000’
A sublet property can be designated as an HMO and be subject to the strict rules governing multiple occupancy buildings, warns expert.
Landlords could face prosecution and fines of up to £80,000 if tenants sublet their property, an expert has warned.
So says law firm Landlord Licensing & Defence, and it comes after research revealed two thirds of landlords have discovered renters subletting. A survey by Direct Line business insurance recently showed that half of all landlords are happy for their tenants to sublet.
But subletting even one bedroom can turn a standard single-let into an HMO under the Housing Act 2004, and then subject to HMO regulations, which carry strict liability criminal penalties.
All of that can lead to either a criminal prosecution and fines of at least £20,000 up to sometimes £50,000 to £80,000.”
Phil Turtle, a landlord law expert at Landlord Licensing & Defence, says: “I can guarantee that unless your property has been designed as an HMO, yet your tenants turn it into one by subletting, the landlord will become criminally guilty of having inadequate fire alarms, inadequate fire doors and in many cases illegally operating an HMO without the necessary licence.
“All of that can lead to either a criminal prosecution and fines of at least £20,000 up to sometimes £50,000 to £80,000.”
Rare
And while councils can prosecute tenants who carry out unauthorised sublets, Turtle warns this is rare: “On the odd occasion this happens, it is always in addition to prosecuting or fining the landlord.”
Also, if the sublet creates an HMO that should have been licensed, tenants can bring a Rent Repayment Order (RRO) against the landlord for up to 12 months’ rent – set to rise to two years’ rent when the Renters’ Rights Bill comes into force.
In areas covered by ‘Article 4 directions’, landlords also risk planning enforcement action. Where permission for an HMO has not been granted, breaches can lead to heavy fines under the Proceeds of Crime Act.
