We recently purchased another letting company. During the first visit to introduce ourselves to the residents, we found that the resident on the tenancy agreement was not the resident we met! We were told that the person on the AST was on holiday but rarely lived at the property.

Our problem was that we had a person who had keys to a property worth £290,000 and no contract with that person.

The owner’s insurance was made invalid as we didn’t have any referencing background and funnily enough once we were on to the situation the rent stopped coming in.

We therefore we issued a section 21 to end the tenancy with the named individual and warned the person we found living at the property that they needed to go PDQ as they were trespassing.

We achieved possession but subsequently found out that the person living at the property was paying twice the amount that was noted on the AST. We left that discussion with the person who had paid over and above to the person on the tenancy agreement

What is subletting

Subletting is one of those tricky grey areas that can cause serious problems for owners if not handled properly. Put simply, it’s when a resident rents out all or part of their home to someone else. While it might seem like a harmless way for residents to make a bit of extra money, it can quickly spiral into a major breach of contract—especially if it’s done without the owner’s permission.

Subletting can apply to domestic or commercial lets and may involve short-term arrangements (like Airbnb) or longer-term setups. Without the proper checks and consent, it can:

• Breach HMO regulations
• Invalidate landlord insurance
• Lead to rent arrears or legal complications
• Increase wear and tear or cause overcrowding

What to watch out for

We found out the situation very quickly by making that introduction. Therefore, if you manage the property yourself it is so important to be alert to potential signs of unauthorised subletting:

When we visit a property as well as looking at the condition of the property rated against HHSRS we also look for:

• Extra beds or mattresses
• Number of toothbrushes and shampoo bottles in the bathroom
• Residents who aren’t the original signatories
• Changed or additional locks
• Large amounts of post for unknown names
• Refusal or delays in scheduling inspections

Sometimes the first clue comes from outside the home. Therefore, you need to set up notices on popular platforms like Gumtree, Airbnb and Booking.com, or even local Facebook groups, for listings that match your property. If your resident suddenly stops responding or their tone shifts, this could indicate someone else is occupying the property.

Don’t underestimate the power of community. When we take on a property to manage, we make sure that the neighbours are aware of us as managing agents – erecting a board is the best notice. Neighbours often notice new faces, increased foot traffic, or noise. They can be an invaluable source of intel.

What to do if you suspect subletting

If something feels off, act—but do it by the book:

• Arrange a property inspection (providing the proper notice)
• Document everything you find: photos, notes, and anything unusual
• Speak to the resident – sometimes it could be an honest mistake (e.g. a family member temporarily staying)

Depending on the situation, next steps might include:

• Issuing a formal warning
• Serving notice for breach of tenancy
• Or in some cases, formally adding new occupants to the agreement

Always aim for a balance between protecting your interests and acting reasonably with the resident.

The impact of the Renters’ Reform Bill

While the Renters’ Reform Bill doesn’t change subletting rules directly, it does affect how owners can respond:

• With the removal of Section 21 (“no fault”) evictions, owners will need to rely on Section 8
• Subletting falls under Ground 12 (breach of tenancy), but it’s a discretionary ground, meaning the court may not always grant possession

This means owners must be proactive and precise when managing potential subletting.

Prevention is better than cure

Prevention starts at referencing. Robust, in-depth referencing doesn’t just cover finances – it checks identity, rental history, and flags previous issues.

A notable example: in 2024, landlord Leanne Newton discovered her tenant was illegally subletting a one-bed London flat for up to £190 a night. That tenant potentially earned three times the rent she was paying—a wake-up call for landlords everywhere.

Final thoughts

Subletting isn’t always malicious, but it does carry risks. Regular inspections, thorough referencing, and crystal-clear tenancy agreements are your best lines of defence.

Need help reviewing your tenancy setup or want to learn how to spot red flags earlier? The Maxine Lester team is always happy to help.
Stay vigilant, stay informed—and protect your investment.