Landlords are encouraging illegal subletting scams when their tenants struggle to pay the rent, according to housing lawyer Ben Reeve Lewis.
Reeve Lewis reports that the practise is rife in a west London borough, where he is a consultant.
However, he warns that the scam could be operating in any area where rents are high in relation to tenants’ income.
Reeve Lewis states that in the unnamed west London borough, families unable to afford the rent on a three or four-bedroom house are advised by their landlord to sublet the property in order to meet payments.
In these situations, there is rarely a written tenancy agreement that confirms this arrangement, and no written contract with the sub-tenants.
In most cases, the family lets out rooms to other tenants and the landlord collects the rent in cash. Reeve Lewis notes that receipts for rent become mysteriously lost when the scam is exposed.
When the local council’s licensing and enforcement team learns of the overcrowding and creation of a House in Multiple Occupation (HMO) – typically after complaints from neighbours – the landlord denies all knowledge and points the finger at the tenants named on the tenancy agreement.
Reeve Lewis claims that the monetary benefit to the landlord is huge and that if the tenants try to blame the landlord, they are often evicted. He also warns that the scam is a growing trend, due to the chronic shortage of affordable homes in the private rental sector.
If your tenants are struggling with rent payments, remember that the best thing you can do is communicate effectively with them to understand their financial circumstances.
Additionally, always ensure that your own finances are protected with Rent Guarantee Insurance. This peace of mind cover makes sure that you still get paid, even if your tenants fall into rent arrears. Our policy also covers your legal expenses if you are forced to evict tenants.
Don’t turn to illegal practises if your tenants struggle with rent payments!