Here is a question to the blog clinic from Dan who is a victim of illegal subletting
I’ve been renting from my “landlord” for the past 18 months and the fixed contract ended 3 month after I moved in and since it expired I’ve been renting on a short hold tenancy contract (on a month to month basis with no fixed end date) and yesterday it turned out that he is not the real landlord.
The real landlord came at the house saying she had rented the house to the “fake” landlord for a maximum of 6 people (all of which were supposed to be a family unit) and that the he is in breach of contract for unlawfully subletting the house and renting the rooms to 10 people – basically he has been making money on us by renting the 4 big double rooms to couples and the 2 smaller doubles to myself and another tenant. I know that he will be served with notice to leave for breaching the contract and he will have 60 days to leave (as per the agent who’s acting on behalf of the real landlord).
Now because the real landlord has figured out that she can make more money by renting to more than 6 people she will probably either let us stay and re-new the contract with us, or ask us to leave and start afresh.
My issues are this:
I don’t really want to leave because I know that it will be practically impossible to find another place as new, clean and convenient for the same amount of money (£515 pcm all inc.). Can the real landlord ask me to leave when the notice to the fake landlord expires? In the worst case scenario, where would I stand if I decide not to leave? (consider that I still wish to continue being a fair and law abiding tenant).
The other issue is this:I know for a fact, that the fake landlord did not put my deposit in a protected scheme because he neither told me and nor presented me with the DPS certificate within the 30 days of me paying it to him! Therefore, I am aware that he is in breach of law and thus liable for that.
Moreover, because the real landlord will serve him the notice to leave, he will have to give me notice to leave (4 weeks as per contract). However, I fear that he may not give me the deposit back and do a runner (he’s already done it with a previous tenant). Because of this fear I am thinking to withhold paying him rent due in 10 days.
Therefore, where would I stand if I decide to withhold paying him rent until he gives me my deposit back as a protective measure for fear that he will not give me my deposit back? Will I be liable and thus in breach of contract considering that he himself is in breach of contract by unlawfully subletting the rooms? Can he evict me for by serving with the Section 21 notice?
I would really appreciate you opinion and suggestion.
Answer
I am sure that this sort of illegal subletting is not an uncommon issue.
Your rights will depend on what sort of occupancy you have and this will depend in part on whether the ‘fake’ landlord lives at the property or not. Which is something you have not told me!
However I should start by saying that the ‘fake’ landlord is not really a fake (even where there is illegal subletting) and so far as you and he are concerned, he is your legal landlord. He may be in breach of his tenancy agreement by the illegal subletting to you (and the others), but that does not affect the validity of your contract with him.
The problem is of course that any occupation rights you have are vulnerable to being ended when your landlord’s tenancy with the ‘real’ landlord is terminated. However at the time you wrote your question, it had not been ended so your arrangement still stands.
But let’s take a look at your occupation type.
Your occupation type
- If your landlord is living at the property with you and shares living accommodation (for example if you all use the same kitchen and bathroom) then you will be a lodger with no long term security of tenure.
- If your landlord does not live on the premises, then what you probably have is an assured shorthold tenancy for your room with shared used of the common parts of the property (eg bathroom and kitchen).
However, you say you are in a double room. In which case, even if your landlord lives elsewhere-
- If you are sharing your room with someone else who has a separate agreement with the landlord then you cannot have an AST as one of the main features of ASTs is that the tenant has ‘exclusive occupation’ of at least their room. So if you are sharing with someone under a separate agreement this will not be the case, so the most you can have is a license agreement.
Illegal subletting and your occupation rights
Your occupation rights will be strongest if you have an AST as then your landlord is under a duty to protect your deposit and you can only be evicted if the proper form of notice (in most cases this will be section 21) has been served on you. However as he has not protected your deposit any section 21 notice he serves on you will be invalid.
Your rights will be least if you are a lodger as then your landlord is under no duty to protect your deposit and he does not need to get a court order to evict you. He can evict you via the procedure I set out on my Lodger Landlord site.
If you are sharing the room with a stranger and have a license, you will have fewer rights than you would as a tenant but more than if you were a lodger. Your landlord is under no duty to protect your deposit but he does have to get a court order to evict you. The procedure is different from the procedure used for tenants though and is the same procedure used to evict squatters (except that you are not a squatter!).
However if the property owner gets a possession order against your landlord then the bailiff will be empowered to evict whoever he finds at the premises (ie you and the others subletting). This is the case whatever sort of agreement you had with him – as these will end when his tenancy ends under the court order.
If this happens you would be entitled to claim compensation from your landlord – although if he is a dodgy type (which he could be as he is illegally subletting) your chances of getting any money out of him are probably remote. On the other hand, his chances of claiming any unpaid rent from you through the courts will be virtually non-existent …
Withholding money to reclaim your deposit
As your deposit has not been protected, if your landlord is a dodgy type, withholding rent is probably your best chance of getting it back.
However as he is (at the moment) your legal landlord this would be a breach of contract. If you are a lodger, he would probably be justified in evicting you without a court order …
You will therefore need to choose carefully your moment for withholding it, should you decide to do this.
Hi – I think, from what this person has posted, that both he and another tenant have exclusive occupation of a smaller double room each. He mentioned that the larger 4 double rooms have been rented to couples with the smaller 2 being rented to him and another tenant – I think this means they have a room each.
You are probably right. Still I am glad I included the license answer as I am sure others will be in this position.
I forgot to mention that of course this will be an HMO.
Would the ‘sub’ L/L be entitled to a claim for rent in Court? Surely this would be via ‘illegal and immoral’ purposes….while he is technically a legal L/L, it would be almost certain to contain this clause in the original AST with the ‘actual’ L/L?
Until he loses occupation the illegal sub tenant has suffered no loss. So he will only be entitled to claim if he was evicted by the head landlord.
Also a tenant cannot ‘look behind’ his landlord’s title. So a sub tenant cannot claim in respect of something in his landlord’s tenancy agreement. Unless of course he is evicted by the head landlord.
It would be interesting to know if the ‘real’ landlord has an HMO licence (I assume the ‘fake’ landlord doesn’t) and if it is for 6 persons then I’m thinking that the council would be unlikely to extend it to 10, given that 6 would be based on the facilities in the house. One way or another, therefore, some of these tenants will probably to have to go at the end of the process.
Tessa, don’t you think that Dan and the other tenants need to start paying the ‘real’ landlord as soon as possible (thus creating a tenancy with her) as she will be concerned about any losses she is making? If the relationship with her gets difficult it might be worth stirring it up by getting the council’s HMO team involved. It won’t endear him to the ‘real’ landlord though and, in my opinion, he should therefore regard whatever he does as a way of buying time while looking for another place.
The head landlord would not have needed an HMO license if the six persons were intended to be all members of one family.
Rather than pay rent to someone who is not their landlord, it might be better for the sub tenants to withhold rent altogether until they know what their situation is. However bearing in mind that – as between them and the ‘fake landlord’ there is a valid tenancy / license (or whatever) they risk eviction for non payment of rent.
This is probably not a real risk as I doubt whether the ‘fake’ landlord would go to court, but it would entitle him to evict if they are lodgers as no court order is necessary there.
Can a landlord claim to reside in a property (and thus claim to be a landlord of lodgers) by, for example, kipping on the sofa once in a while, or getting a member of family to regularly occupy or sleep in a shared area? Does it rest on whether they have another place to reside (i.e. could a landlord rent out his flat as an HMO, but be homeless, then claim the flat to be his principle and main residence, even if he didn’t actually do more than kip on the sofa once a week, or get his post sent there)?
Similarly, can a non-resident landlord avoid some of his obligations by informally appointing a ‘head-tenant’ (as a fake resident LL) who simply collects the rent to his own account (or, more likely, in cash), then passes the rent on and simply issues “lodger agreements”, but is not expected to make up for any voids? This happens on rental websites and seems fundamentally different to an actual “rent-to-rent” situation.
The case law concerning a resident landlord has been quite extensive over the years, but suffice it to say that a person who ‘kips on the sofa once a week’ or gets his post sent there is very unlikely to be able to claim residential status. Some years ago I dealt with a case of a landlady, who had stored a large amount of her furniture and other possessions in what had been a bedroom, but who lived elsewhere, claimed that she was resident, although it was impossible due to lack of space for her to do so.
She conceded the point when a defence to her claim was submitted
Disagree a residential LL who is on the Electoral roll and who has all mail etc sent to the residential address is entitled to to attend the property as little or often as they wish irrespective of whether all the bedrooms are occupied or not
For residential insurance purposes attendance by someone at the property is expected every 31 days
With lodgers in occupation that fulfills the insurance requirement
Providing no locks are allowed on bedroom doors then all occupants will remain lodgers
Lodger may have bills in their own name and pay them
Along with the TV licence
Council tax will be in the name of the LL but the lodgers will pay for that on top of the normal rent
So it is perfectly possible to be an absentee residential LL with lodgers who hardly if ever see that LL!!!
It is irrelevant if the lodgers ever state they never see the live in LL
Those lodgers remain lodgers and cannot ever claim to be tenants just because their LL is hardly ever seen!!
Of course with lodgers a gas cert is required
No deposit protection is required for lodgers
If a lodger has a TV or access live rv on a lap top then a separate TV licence is required
Nobody ever bothers with this.
After all how would TV Licensing ever find out!!??
Some lenders have restrictions on how many lodgers if any they permit
Usually it is two individuals
They don’t consider household entities
But whose to know if you don’t tell them!?
It is your residential to do with as you wish
Providing the mortgage is paid nobody will be the wiser
If you are an accidental LL you can’t have tenants unless the lender has granted CTL
If that occurs you will need to change the insurance, you will have to protect deposits and you will be subject to C24 which will treat mortgage interest as income
So really you only want lodgers and not tenants
There will be many of the 300000 Acc LL that will be coming a cropper over the next few months!!
I am sure that Tessa will agree that a landlord who claims they are resident merely by a name on an electoral roll would not be correct and is very unlikely to be persuasive in a court of law.. Ben & Tessa will also well remember the statement that a “three pronged garden implement is a fork even if a person wishes to call it a spade”. That is from the case of Street v Mountford that all housing practitioners learn as basic to establish if a person is a tenant rather than a licensee.
Suffice it to say that there are several statements in Paul’s comment would be dismissed by most housing lawyers
Paul doesn’t make clear if he thinks locks on the door would make them sub-tenants or full tenants.Common sense would suggest no-one could claim to reside, as their principle residence, in an area deemed to be part of the agreed shared areas of an HMO. Also, could it be argued that a living room leading to, say, the kitchen, counts as a corridor or access passage and therefore cannot be considered as a dwelling?
What about the second scenario with the “fake” resident LL with just an informal agreement to collect rent from people (possibly duped into believing they are only lodgers) and pass it on to the owner with no financial risk to himself from voids?I guess this is like a non-resident LL having a resident agent. Doe this make the lodgers into actual tenants? Would locks be required as long as they had exclusive use of a room each? If the owner ended the agreement with the head tenant would the “lodgers” be subordinate or would they have the protection of really being tenants of the head landlord/owner?