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Posted on March 23rd 2015 by admin-movingin

Worries mount over ‘catastrophic’ plans to allow sub-letting

Concern is continuing to mount over plans buried away in the Budget’s small print which will mean that private landlords can no longer ban sub-letting.

Sub-letting is commonly banned in letting agreements, but such clauses would become illegal.

The Government, which wants to encourage the “sharing economy”, says it intends to introduce legislation.

If this goes ahead, it would mean that landlords cannot legally stop their tenants from letting out rooms, or from advertising their rented homes on sites such as Airbnb or HomeAway at a higher price.

This would allow the tenant to make a profit, while increasing the risk of wear and tear.

It could also concern specialist insurers and buy-to-let lenders, who routinely ban sub-letting.

Allowing tenants to sub-let could also drive a coach and horses through the requirement to conduct immigration checks on prospective tenants, say critics.

There are other implications for landlords in areas of selective licensing, for deposit protection, for homes being turned into Houses in Multiple Occupation without the landlord’s knowledge, and for existing HMOs to breach requirements as to numbers of occupants allowed.

Paul Shamplina, founder of eviction firm Landlord Action, said there are already far too many problems with tenants trying to sub-let for a profit.

He called the new move “catastrophic” for the industry.

He said: “We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented.

“We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting to as many people as possible.

“They draw up separate agreements and trick sub-tenants into thinking they are the landlord.

“By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is nowhere to be found.”

He was also critical that the Government had made the announcement without any consultation with the industry.

He said: “This is not the way to fix the housing shortage, and in fact will have quite the opposite effect if more and more landlords are exposed to the risk of nightmare sub-tenants.

“Giving landlords even less control over their own property by preventing them from instilling clauses which prevent sub-letting could drive more good landlords out of the marketplace.”