Landlord Law blog reader Dave has questions for the blog clinic on sub tenants:
Hi, if a residential tenant has a subtenant (ie not a lodger) and the subtenant is evicted (sub-letting being against the contract), what happens to the sub-tenant?
I presume that as they have an AST with the tenant, they have tenancy rights? Does their tenancy revert to the superior landlord? Or could the bailiffs, enforcing the possession order, remove the sub-tenants too?
My understanding here is that where the sub letting is unlawful (ie against the tenancy and the landlord has not agreed to it), an order for possession against the tenant will also end the sub tenancy. Or, to use a phrase often used in this context “the branch falls with the tree”. So a bailiff will be able to evict everyone he finds at the property, including the subtenant.
However if a landlord accepts a surrender from the tenant (ie if it is agreed between them that his tenancy will end), then the landlord will be bound by the sub tenancy and the subtenant will then hold his tenancy direct from the landlord.
Which is why, if you agree to a surrender from your tenant, this must always be conditional upon vacant possession being given, so you don’t get stuck with any sub tenants or lodgers.
So what then is the legal position if a LL requires possession of the property but property has been sublet LAWFULLY.
If LL serves notice on head tenant, and then takes possession proceedings against tenant and indicates that subtenants are in occupation, will bailiff still evict anyone at the property – including lawful subtenants?
(great site by the way!)
I have never been involved in a case where this happened, but I am pretty sure that the sub tenant would be able to ask to be joined into the litigation and then ask the court to make an order that the sub tenancy become the tenancy (ie the tenant drip out of the picture) – with the sub tenant paying rent direct to the landlord.
If he does not find out about it in time, and actually gets evicted, then he would certainly have a compensation claim against someone – probably the tenant.
But I suspect that he would be able to ask the bailiff not to proceed to give him time to make an emergency application to the court.
Has anyone ever had a case where this happened?
Even a lawful sub-tenancy falls with the main tenancy, albeit not by way of surrender as Tessa has noted. The lawful, deprived sub-tenant will have a claim for damages against the intermediate tenant as his landlord – but good luck getting damages out of someone in that scenario! The lawful, deprived sub-tenant may yet have a claim under article 8 against the head landlord – see what the Court of Appeal says in December!
It is possible for the sub-tenant to pay rent to the head landlord and a new tenancy can then be created by attornment/estoppel. So also be wary of accepting rent! There is finally the faint possibility of property adjustment orders in a family situation (eg tenant was husband, moves out, wants wife and kids to have the tenancy).
The lawful sub-tenant problem occurs frequently in business premises and there are specific rights under the L & T Act (or the LPA) for them to get the original tenancy vested in them, as part of an application for relief against forfeiture. I don’t have the details to had at the moment and they might not apply to residential tenancies, but this may be useful to explore.
Thanks boys! This all goes to confirm my view that sub tenancies are things to be avoided in residential short lets!
As you know this is a massive problem in social lettings. Most landlords now routinely address all correspondence to the named tenant “And any other occupiers” so that any sub-tenants will be alerted and hopefully open the post.
Housing management staff are always on strict instruction not to accept rent from the sub tenants, although they do collect monies as ‘Mesne profits’ or ‘Use and occupation charges’.
When I train them I also stress not to accept keys as a surrender in case there is a sub tenant who can then raise problems with them.
In my experience, and this may simply be in my area because there are so many dodgy characters, bailiffs who attend even mortgage repossessions will go straight back to the office if there is anyone there when they turn up because they don’t want to become embroiled in complex legal issues.
So it is quite common for people facing a warrant to have a mate answer the door and say they are the tenant and didn’t know about the proceedings. This buys them time during which they might be able to borrow some dosh to get the warrant suspended.
cjr1968 is right, on my view. Sub-tenancy falls with tenancy unless something else has happened by way of an acknowledgment or creation of new tenancy by the landlord (or on surrender, as noted). The sub tenant may have a claim for damages in breach of quiet enjoyment and derogation from grant against the (former) tenant, for what that is worth.
Mortgage possession is a whole other kettle of fish, though.
Yeah NL, just pointing out the scams used to deter bailiffs across the board.
Tenants of defaulting mortgagors who arent buy to let are covered by the Mortgage Repossession (Protection of tenants) Act 2010, which is a statutory deterrent to bailiifs. As you say, a different kettle of fish but stirred together in the same broad fish kettle, along with white wine, shallotts and garlic
Oh and tenants of landlords taken into LPA receivership gets even more funky
Thanks Tessa et al.
So it seems perfectly possible for an AST ‘tenant’ to be evicted without any action being taken against them personally? I can see the logic in the points raised, but it seems that a considerable number of (sub) tenants could find themselves without the rights that they are told in 101 places they have. Seems to me that tenants also need a “Tenancy Possession (Protection of sub-tenants) Act” to give them the 2 months protection.
Well when I come across an unlawful social housing sub let, which is quite often, I tell the neighbourhood office and they start putting the sub tenants on the paperwork so they have plenty of warning, often more than 2 months.
Its usually complaints of harassment that bring them to light, when the Mesne tenant starts trying to drive the sub tenant out and I pick up the shout.
I have in the past had to deal with illegal eviction where the housing officer mistakes the notion of unauthorised occupancy, with having no rights at all and changes the lock. It causes quite a bit of confusion around the country, I hear it from housing staff I train in different councils and RSLs
So you don’t have to own or lease a property to grant an AST? You seem to be suggesting that an AST tenant can sublet with another AST?
Great thread! I have received conflicting advise as to what contract you should have with the primary LL (or his agent)if you intend (with his permission) to sublet his property. Also the contract needed between you and your sub-tenants. Any suggestions?