The Subtleties of Subletting
As a landlord, we strive to find the optimal tenants who we hope will reside in our properties for a long time to come. However, when you’re not around, who knows what goes on? Clearly, subletting is something that happens everyday and more often than not it goes unnoticed. In the case that you do catch out your tenants (god forbid), what do you do about it? Well, we look at the risk of this happening and the best possible approach to deal with the situation.
Now, this isn’t something that should be taken lightly, afterall, you’re sense of trust has been betrayed – the tenants you have come to know and trust have allowed complete strangers to dwell in your property. Some may not be too worried, but, for those that are, why is subletting so concerning?
When we analyse the situation further we can take a look at our main concerns – insurance policies. Most policies have little wiggle room when it comes to subletting, with the biggest worry being that of your policy becoming void. What does that mean for you as a landlord? If damages do occur, when you do go to make an insurance claim – there may be complications.
But, you’ve trusted your tenants, how could any damages possibly occur. There is a huge risk that the subletting tenants may not take good care of your rental property, afterall, you didn’t choose them. As well as this, who checked references? Who conducted credit checks? so how can you be sure they’re reliable? This is something that Quinovic Lambton Quay are well on top of – by having our trust account, we are carefully examing the payments from every account that comes in. Our consistent communication with our tenants provides us with all the information we need to ensure your greatest asset is in safe hands.
Without a property manager, if the occupant who is subletting causes damage, you must pursue the original tenant for any re-compensation, which can prove difficult if they’re no longer contactable – rather time consuming for you.
It’s rather difficult to conduct inspections every 90 days as well as carrying out full documentation for it as well. But, this is the optimal way to prevent subletting. This is sometimes a requirement for your insurance policy and isn’t something that you want to get behind in. Carry out quarterly property inspections – showing tenants you’re keeping a good eye on the property should ensure they’re aware you take a close interest in the property and that they should communicate any changes to you.
Put a clause in your tenancy agreement forbidding subletting. We cannot stress this enough.
When your tenants are signing the tenancy agreement ensure you tell them no subletting is allowed to prevent any misunderstandings.
There are instances where the landlord may be ok with subletting, it can certainly be beneficial to the landlord if the tenant needs help paying their rent on time or wants to get out of a fixed term tenancy without causing a huge issue. However, it’s important to remember that even if the tenant sublets and moves out of the property, the original tenant, not the person subletting, is responsible to the landlord. If you ensure the subletting tenant is properly letted a good outcome is much more likely.
To protect everyone’s rights and responsibilities, if you find your property is being subletted ask the new occupant to sign a written tenancy agreement so they become the new tenant. This should be done only if you are prepared to end the agreement with the original tenant.
Being a landlord can be tough! That’s why when you sign up with Quinovic Lambton Quay, all of that stress disappears. You can rest assured that your property is in safe hands and all of your preferred boxes are ticked.