The wording made it clear that forthcoming government legislation would make it illegal for private landlords to include clauses in tenancy agreements which ruled out sub-letting or the sharing of space on a short-term basis.
Private Rented Sector experts such as the RLA and Landlord Action, were quick to express their grave concerns over the plans, describing it as ‘nightmare in the making’ and predicting that it will “throw up a magnitude of problems in the buy-to-let industry’.
From a landlord’s point of view, key questions remain unanswered, such as who will be responsible for a property if the tenant sub-letting leaves the house, but the tenant they are sub-letting to stays?
The Government also wants landlords to check the immigration status of their tenants, something which will prove difficult if they are no longer fully in control of who is in their properties.
From an insurance point of view, sub-letting also throws up problems. Rating structures for Landlord Insurance are based on the tenant type, among other factors, with insurers attributing higher risk for student tenants than they would professionals, for example.
Steve Jones, director of Rentguard Insurance says: “It will be difficult for a landlord to disclose the details of their tenants, and answer the risk question accurately if they no longer have the final say on who occupies their property. The real problem would come if underwriters decide to charge the higher rate to everyone to factor in the likelihood of damage cause by tenant’s subletting the property,”.
Problems may also arise as tenants are unlikely to professionally reference those they sub-let to and may as a result know very little about them, their lifestyle, background and ability to regularly pay the rent.
Jones concludes: “It remains to be seen if the government will re-think this move after the backlash it has faced from the Private Rented Sector, as at the moment it is hard to see who this new ruling benefits – other than tenants looking to rip-off hard working landlords.”
