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Can I sublet my property?

Posted on 2015-09-11

If you’re renting a property, then it’s more than likely you’re renting directly from a landlord who owns the property. In some cases though, you may find that you’re renting from a tenant who rents your home from the owner. This is what’s known as subletting. If you’re considering subletting, here are the answers to two common questions.

Can I sublet my home?

Put simply, your tenancy agreement should inform you whether you’re able to sublet your property. Most tenancy agreements explicitly state whether you have the right to sublet part or all of the property and whether you must consult your landlord first. As a result, this should be the first thing you check if you’re thinking about subletting.
Most assured and shorthold tenancy agreements will contain a clause or a term about subletting and, if this is the case, then it’ll always apply. As such, if the term states that you explicitly require your landlord’s consent, then you must seek it beforehand.

There’s a chance that your agreement doesn’t state anything about subletting. If this is the case, then particular rules will apply.

Generally speaking, for periodic tenancies, you can’t sublet without a landlord’s permission and they can refuse for any reason.

If you have a fixed term tenancy, and your tenancy agreement says nothing about subletting, you can sublet and your landlord’s permission won’t strictly be required. However, if this is the case, you’re still best speaking to them about it first and letting them know what you plan to do.

What do I need to think about first?

If you sublet part or all of the property you’re living in, then you essentially become a residential landlord. As such, if you’re going to sublet the property – if your tenancy agreement allows for it – then you should speak to an advisor first. There are a number of effects that subletting can have on your personal situation, including:

Impacts on benefits and tax credits

If you receive benefits or tax credits, subletting may affect these. If you consult with an advisor, however, they can do what’s known as a ‘better-off calculation’ for you. This should help you work out how your additional income would affect your entitlement to any benefits or tax credits.

Council tax

If you live alone, you’ll receive a 25% single occupancy reduction on your council tax. As such, if you sublet a single room, you’ll lose this discount unless your tenant is exempt from paying council tax, for example if they’re a full time student.

Income tax

If you currently pay tax, then the Government’s rent-a-room scheme means that you can earn a sum of money from subletting, tax-free.

Here, you can earn up to £4,250 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else. You can either let out a room or an entire floor of your property.

Insurance

If you’ve currently got contents insurance for your property, then you may need to revise this when your property’s sublet. This represents a change in circumstance and, as a result, your current policy could be invalid. If the cost of your premium rises, consider the new costs when calculating how much you’ll be charging the prospective tenant in rent.

The condition of the home

If you sublet part of your home under a tenancy agreement, you’ll be responsible for the repair responsibilities that are set out in the Landlord and Tenant Act 1985. Generally speaking, this means that among other things, you’re responsible for:

  • The structure of the home 
  • Pipework and plumbing 
  • Electrical wiring, water tanks, boilers, radiators and fitted heaters

Again, these should be set out in your tenancy agreement.

Your landlord will already be maintaining these works in your property, so you may be able to report problems to them to fix. However, this is dependent on what’s agreed when you discuss subletting the property with them.
Additionally, you’ll need to ensure that your home’s clean, decorated to a reasonable standard and adheres to general health and safety guidelines.
On top of this, you’ll have to ensure that all furniture is compliant with fire safety regulations and you should have gas safety certificates, with checks carried out regularly by a recognised engineer.

Do I need a written agreement?

As with any form of tenancy, it’s best to have a written and signed agreement. This way, nobody can be uncertain about what their rights and responsibilities are. Model tenancy agreement forms are available online, such as this one from .Gov.

Alongside this, it’s also worthwhile drawing up a quick inventory for before they move in.

To conclude, subletting can be a great option, but you need to be aware of the legalities regarding it. Know your options in detail before you decide to advance, and ensure that you speak to your landlord first.

 

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