Landlords

New research shows that subletting scams are on the rise

Warren Lewis
|
19th November 2019
Tenant law 444

The latest analysis from inventory service provider, No Letting Go, reveals that regular property visits can help to protect letting agents and their landlords from the growing risk of subletting scams.

According to their data, a professionally compiled inventory and commitment to the check-out process can also help to provide financial cover in the event of property damage.

Subletting scams are on the rise

No Letting Go says there has been a rise in the number of subletting scams in recent months, particularly when it comes to fraudsters using short-term lets platforms to rent out their landlord's properties without permission.

One recent example, which featured on BBC One's Inside Out programme, saw a managing agent discover a family being checked into a rental property by the existing tenants. Further research uncovered a long-running subletting scam with over 70 reviews of the property left on Airbnb over the course of the tenancy. The tenants were eventually evicted but not before they had cost the landlord a significant amount of stress and money in repairing property damage.

Nick Lyons, CEO and Founder of No Letting Go, comments: "The growth of the short-term lets market heightens the risk of unlawful subletting as the available technology makes it easy for tenants to let properties quickly and easily without the knowledge of landlords and letting agents.

If you don't put the right steps in place, subletting could be taking place in your rental property for a long period before you are able to take any action."

What problems can subletting pose?

Tenants subletting a property unlawfully can cause serious issues for landlords. Not only is there a heightened risk of property damage and abnormal levels of wear and tear, but illegal subletting could invalidate a landlord's insurance policy. Subletting can also breach licensing schemes and a number of health and safety regulations which could cause a further headache for landlords and agents.

Lyons explains: "Subletting could cost landlords thousands of pounds of a long period of time. As well as the repair and maintenance costs to consider, there is also the increased chance of costly void periods while the property is being brought back to a lettable condition.

What's more, if you are forced to evict a tenant due to subletting, it could be costly and time-consuming to repossess the property through the courts. This issue could be further exacerbated by the government's plans to scrap the Section 21 evictions process."

How can property visits and inventories reduce risk?

While the risk of subletting will never completely disappear and has grown as it has become easier for tenants to let properties via short-lets platforms, there are steps agents and landlords can take to minimise the chances of falling victim to one of these scams.

Lyons adds: "Regular property visits and inspections can help to identify the tell-tale signs of subletting such as additional rubbish and the presence of people not named on the tenancy agreement.

By scheduling regular visits, you will discourage tenants from subletting and in the event that they are carrying out unlawful activity, you can bring a stop to it as soon as possible. Professional inventories and carrying out the check-out process properly can also offer additional protection."

If tenants have been subletting a property, the presence of an inventory can provide the required evidence for landlords to recoup some of the property damage and maintenance costs from the tenant's security deposit," he concludes.

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