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What is subletting?

Subletting (also known as ‘subleasing’ or ‘underletting’) is when a leaseholder (ie a tenant) rents out (ie ‘sublets’, ‘subleases’, or ‘underlets’) the property they have a lease (ie a tenancy) of to another party

A common instance of subletting is when a residential tenant rents out their home to a new tenant (ie a ‘subtenant’) before the original tenant’s own tenancy (ie the ‘mesne tenancy’) ends, creating a ‘subtenancy’. The original tenant, who is now the subtenant’s landlord under the new subtenancy, is referred to as the ‘sublandlord’.

Subletting does not end the original tenancy, nor does the sublandlord stop being a tenant. A sublet is simply the creation of the new tenancy within (or ‘under’) an existing tenancy. 

A property can have multiple sublets created in relation to it. For example, a subtenant could rent out the property they’re renting to a new tenant, creating a sub-subtenancy with a sub-subtenant.

A sublet can be of the whole or part of a rented property. Whether the whole or part of a property is sublet has implications for which type of tenancy the subtenancy is capable of being. For example, if a tenant with an assured shorthold tenancy (AST) (ie the most common type of residential tenancy in England, which grants a tenant the rights a tenant would generally expect to have) creates a sublet of only part of a property and continues to live in the remaining part, the new tenancy cannot be an AST as the new tenant will not have an exclusive right to occupy the property without a live-in landlord. For more information, read Residential tenancies.  

Renting out property you ‘own’ as a leaseholder is also, technically, subletting. For more information, read Freehold and leasehold property

Why is subletting useful?

Various options are available when a tenant wants to end their occupation of the home they’re renting. These include:

  • surrender - if the landlord and tenant agree to end the tenancy, they can voluntarily end it by surrender   

  • using a break clause - if the Tenancy agreement contains a clause that lets the tenant (or landlord) end the tenancy in a specific way, they can follow the instructions set out in the clause and do this

  • assignment - ie a legal transfer of the tenancy to a new tenant, whereby the original tenant is no longer a tenant. A landlord’s consent is usually required for assignment

A tenancy can also be ended by eviction, if the landlord chooses to end it.

A tenant may find themselves in a situation where none of the above options are available. If they leave the property without the landlord’s agreement and without formally ending their tenancy, their tenancy will not end and the tenant’s obligations under it (eg to pay rent) will continue. This is called tenant abandonment

Subletting provides an alternative. The sublandlord’s tenancy doesn’t end, but the sublandlord can rent out the property to a new tenant to cover the costs of rent and avoid wasting usable housing.

Subletting can also be useful for a tenant who wants to leave a tenancy for a period of time and then return to the property. They can create a subtenancy that lasts for a specified period of time within their own tenancy’s duration, and move back into the property once the sublet has been legally ended.

Landlords can also benefit from subletting, as a tenant subletting rather than moving out can mean: 

  • the landlord doesn’t have to invest time and money into finding a new tenant themselves

  • there is no risk of the property sitting empty (and no rent being paid in respect of it) for a period, as the sublandlord will remain liable for their rent throughout the subtenancy 

When is subletting allowed?

A residential tenant does not have an automatic right to sublet the property they have a tenancy of. The tenant will generally require their landlord’s (ie ‘head landlord’s’) consent. However, some types of tenancy agreements have an implied term (ie a rule that’s automatically included in them by law) regarding subletting. 

The situation is as follows for some of the more common types of residential tenancy:

Fixed term ASTs

An AST that’s within its fixed term does not have an implied term about subletting. This means that whatever the (sublandlord’s) Tenancy agreement explicitly says or doesn’t say should be followed. If there’s:

  • a term in the tenancy agreement prohibiting subletting - subletting is prohibited (unless the landlord changes their mind and later gives the tenant permission to sublet)

  • a term in the tenancy agreement prohibiting subletting without the landlord’s express prior permission - the tenant cannot sublet without the landlord’s permission. However, this permission cannot be unreasonably withheld

  • no term on subletting in the tenancy agreement - the tenant is allowed to sublet

Statutory periodic ASTs

A statutory periodic tenancy is one that arises automatically when the fixed term of a tenancy ends, but the landlord and tenant have not ended the tenancy. A statutory periodic tenancy will be automatically created on almost all of the same terms as the original fixed term tenancy. However, certain types of terms will ‘drop out’ (ie not be part of the new statutory periodic tenancy, even if they were included in the fixed term tenancy). A term allowing or preventing subletting of an AST is one of the terms that drops out.

Instead, a statutory periodic AST will always have an implied term that the tenant cannot sublet the property without the landlord’s prior consent. In contrast to the situation for a fixed term tenancy, a landlord is not obliged to give their consent to subletting if it is reasonable to do so - they are allowed to refuse regardless of whether they have a good reason for doing so. 

Contractual periodic ASTs

A contractual periodic tenancy is one that is explicitly created by a contract (ie a Tenancy agreement), either from the outset of a tenant’s occupation of a property or when an original fixed term expires.

A contractual periodic AST will, by default, include the same implied term as a statutory periodic AST, prohibiting subletting without the landlord’s prior consent. However, exceptions to this rule can apply to contractual periodic ASTs:

  • if the contractual periodic AST contains an explicit term that either prohibits subletting completely, prohibits it without the landlord’s express prior consent, or allows it - this must be followed

  • if the tenant had to pay a premium (ie a fee) when the tenancy was granted or renewed as a contractual periodic AST - the implied term will not be included 

How do you sublet a property?

A property is sublet when a tenant creates a new tenancy of it (ie a subtenancy). This is generally done by creating a new tenancy agreement (ie a Sublease agreement). The type of agreement you’ll need depends on the type of tenancy you’re creating. A subtenancy should be created for a period of time that’s shorter than the remaining duration of the original tenancy it’s created under.  

A subtenancy can be lawful or unlawful:

  • a lawful subtenancy is created when a tenant sublets with their landlord’s consent (or when consent is not required) 

  • an unlawful subtenancy is created when a tenant sublets without their landlord’s consent, when consent is required

An unlawful subtenancy can become lawful (ie be ‘legalised’) if the head landlord acts in a way that affirms it. For example, by being aware of it and continuing to accept rent from the sublandlord without attempting to evict them. 

If you want to create a subtenancy that is a specific type of tenancy, you’ll need to meet the general requirements for that type of tenancy. For example, to create an AST, this includes the requirements that:

  • the property is privately rented (ie it’s not social housing)

  • the tenancy starts on or after 15 January 1989 

  • the property is the tenant's main home (eg not a holiday home)

  • the landlord doesn’t live in the property (ie the tenant rents the whole property). For a subtenancy, this means that if the sublandlord still lives in part of the property and is subletting another part to the subtenant, it’s unlikely that the subtenant will have an AST 

A residential subtenancy can still be created as an AST when the sublandlord is a commercial tenant. The legal requirements for subletting that apply to a commercial tenant are slightly different to those applicable to a residential tenant. For more information, read Subletting business premises

Exactly which rights a subtenant and sublandlord have depends on the type of tenancy held. For example, an AST gives a tenant greater rights (eg greater protection against eviction) than some other types of tenancy. Remember that, if the sublandlord still lives somewhere in the property, it’s unlikely their subtenant will have an AST, so the subtenant will generally have fewer rights (eg they’ll be easier to evict). 

Generally, the sublandlord’s (ie the sublandlord’s) rights and obligations in relation to their landlord will be unchanged. They’re still subject to the terms of their tenancy agreement, including the requirements to pay rent and not damage the property. This may appear risky for the sublandlord if they’re not actually living in the property themselves. However, they should have corresponding commitments from their subtenant (eg to pay rent and maintain the property). So, if the landlord were to deduct money from the sublandlord’s tenancy deposit at the end of the original tenancy to fix the property or recover rent arrears, but these issues were caused by the subtenant, the sublandlord can, in turn, deduct from the subtenant’s deposit to cover these expenses.

While the original tenancy and subtenancy exist, the head landlord and subtenant generally have no direct relationship (ie they cannot enforce obligations, like rent payment or repair obligations, against each other). 

What rights does an unlawful subtenant have?

Even though an unlawful subtenant’s subtenancy was created unlawfully, they will have a normal, legally binding tenancy agreement with their own landlord (ie the sublandlord). This means that they’ll have the usual rights and obligations associated with the type of tenancy they hold. When the original tenancy ends, their situation may be more precarious. Read ‘What happens to a subtenancy if the original tenancy ends?’ below for more information. 

When does a sublet end?

A subtenancy can generally be ended in the same way as a normal tenancy. The exact methods available will depend on the type of tenancy it is.

For a subtenancy that’s an AST, this means the sublandlord must generally use Eviction notices and proceedings to evict their subtenant or the tenancy can be ended in another applicable way (eg if the subtenant and sublandlord agree to end the subtenancy). A subtenant under an AST has the protection of eviction laws even if their AST was unlawfully created (ie if the head landlord did not provide the required consent to the sublet).  

For more information, read Ending a fixed term tenancy and Ending a periodic tenancy

What happens to a subtenancy if the original tenancy ends?

The default position is that when a mesne (ie original or ‘higher’) tenancy ends with a subtenancy in place, that subtenancy will also end and no formal eviction proceedings are required for the head landlord to repossess the property. However, there are exceptions to this rule, including: 

  • if the original tenant surrenders their tenancy - the subtenancy will generally continue and will legally bind the head landlord rather than the sublandlord. This will not apply in certain situations, for example, if the type of tenancy that the subtenant holds is no longer possible (eg if the sublandlord was a private sector landlord and the head landlord is a public sector landlord)

  • when the head landlord forfeits the sublandlord’s tenancy (ie ends it early in a specific way) - the subtenant can effectively apply to become a direct tenant of the head landlord

  • for regulated subtenants (these are generally subtenants whose subtenancy started before 1989)

  • when subtenant has an AST (or other assured tenancy) - they will generally become the landlord’s direct tenant, as long as their sublet was lawful (ie not granted without the landlord’s consent)

If the subtenant becomes a direct tenant of the head landlord, their tenancy can then be ended by any of the usual means (eg using a Section 21 notice or a Section 8 notice).

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