If you’re not sure about what subletting really means, here’s the risks of the arrangement and how to know if your tenant is consciously subletting your property.
Lost rental income and disastrous property damage. This subletting nightmare actually happened to one of our landlords. While SPEEDHOME has helped him and other landlords with similar cases to recover their property, you can avoid the problem altogether by learning how to identify if your property is being sublet without your knowledge.
What is Subletting?
Subletting is the practice of an existing tenant renting out the entirety or part of a property to someone else. Rather than paying rent to the landlord, the new subtenant or subletter, pays the tenant.
This is different from roommates, where every tenant is named in the lease and is jointly responsible. Only the original tenant’s name is registered under the lease agreement when subletting. This can come into play when a termination in the subletter’s lease is separate to the tenant’s, for example.
Is subletting illegal?
If your tenant sublets without your permission, they are in breach of their tenancy agreement. Depending on the nature of the sublease, you are entitled to take legal action, but non-escalating solutions should be considered first.
It isn’t uncommon for tenants to sublet their rental property: either a bedroom to make extra money; or the whole property for more rent than they are paying. Organised schemes to increase scarcity and pocket the difference also exists, but these are less common.
Problem is— subletting leaves you, the landlord, with concerns about your asset. You won’t know who’s staying in the property and it could suffer a lot of wear and tear since the tenants aren’t vetted beforehand. They may as well be squatters if you don’t trust them.
Some landlords aren’t bothered about who is living in the property as long as the rent is being paid. Since your lease is your first line of defence, the tenant who signed the agreement will be held responsible for any damage caused. But things can happen outside of your control and when they do, it becomes a whole other can of worms for you to deal with.
The Story: A Worst Case Scenario
A tenant who didn’t just ghost his landlord— he replaced himself with a destructive mess and pockets the entire rent money. Our runners are ready to knock on some doors to straighten this out.
The Start of A Nightmare
It starts with a bad sign– 6 months of missed rental payments and an uncooperative tenant. Our landlord didn’t want to take any action because the tenant was his friend, who promised to pay his dues. That stopped the landlord from sending Letters of Demand as the losses piled up.
Panic sets in when the tenant completely disappears and becomes uncontactable. SPEEDHOME was sent to investigate the property. What should’ve been a straightforward case of tenant abandonment is complicated when they find someone else living there. Instead of the man listed in the tenancy agreement, they find a woman.
Who is this woman and where is the original tenant?
The woman, who we now know is a subtenant, claims that the original tenant had rented the property to her with a legitimate tenancy agreement, which she had been paying. This is an illegal subletting arrangement, with none of the money going to the landlord and an untrustworthy person taking the original tenant’s place. Because the original tenant made this agreement without the landlord’s permission, it breaks the terms of the lease and the sublet is invalid. This is grounds for eviction of both the tenant and subtenant.
But we have some bigger problems to deal with.
The Walls Are Red with What?
The subtenant caused disastrous, intentional damage to the property. Not only were the walls painted a hideous colour, the furniture was vandalised, the place was trashed and dirty. This inconvenience would have cost the landlord so much money if it weren’t for the insurance in place.
SPEEDHOME needed to recover the property, restore it and find a new tenant ASAP to recoup the losses from the sublet. Legal action may be an obvious answer but it would take up time and money.
Everything was questioned, from the background of the subtenant to her relationship with the original tenant. Furthermore, Police had deemed the sublet as a domestic case and had no jurisdiction to evict the subtenant from the premises. The tenant continues to be uncontactable and the subtenant stubbornly refuses to acknowledge the real landlord. So what now?
SPEEDHOME Runners to the Rescue
Our Homerunners went to great lengths to resolve the issue.
To establish contact with the subtenant, they went to the unit pretending to be new tenants viewing the unit to legitimise the landlord’s ownership in the subtenant’s eyes. They took a closer look at the unit and tried to convince the subtenant to leave since her agreement was illegal.
When that didn’t work, SPEEDHOME gave the subtenant an incentive by offering to help her move out with funds and assistance in the eviction process. It worked, the subtenant was gone and the property was successfully recovered.
Our robust, SOP-driven eviction process has worked with many similar cases and protects the 6000 properties and landlords under our care. You can stay home with no headaches while the team sorts through the issue, knowing your unit is handled effectively.
How do I know if my property is being sublet?
The best way to gather evidence is by conducting regular property inspections. Notify your tenants in writing with a 72-hour notice for inspection. If they refuse access or try to delay, this should raise some suspicions.
Schedule the inspections early in the morning, around 9:00 am, and arrive early to observe any unusual activity. You might even witness multiple people leaving who aren’t included in the number of tenants on the agreement. While you’re there, keep your eyes open for obvious clues:
- Generous sleeping arrangements. This includes blowup mattresses, sofas or extra bedding.
- Too many belongings. You might find shoes littered in the hallway or multiple toothbrushes in the bathrooms. Check the cupboards for things that would belong to different people.
Property inspections might be hard for landlords who don’t live nearby their property. Alternatively, you can send someone you trust to check the property for you. SPEEDHOME’s homerunners service can offer you the same convenience and follow up if they find any trouble.
Being proactive will benefit you in the long run. In cases where the original tenant is not present at all and whoever lives on the property doesn’t know who their landlord is, it’s good practice to keep in contact. Often subletters who have been deceived by the primary tenant would provide more information when they learn that you are the real landlord. After all, they’re also victims who are tricked into this illegal arrangement.
What other signs can you spot without visiting the unit?
- Communication trouble: If your tenants become unresponsive, avoid check-ins, or resist inspections, it could be a sign of subletting.
- Increased rubbish: Excessive trash and food waste could indicate a more permanent guest, apart from occasional festivities like hosted birthday parties.
- Witness next door: The neighbours may notice extra visitors, whether it’s more cars, unfamiliar faces, or increased noise. Take note of any complaints made by other residents.
Should your tenants express interest in subletting, they should submit a written request explaining their reasons and give you a reasonable amount of time to consider and respond. If you agree to subletting, a new tenancy agreement should include specific terms. If you decline, respond in writing and inform your managing agent accordingly.
Under any suspicions of subletting, reach out to our operations team for further assistance.