A landlord who has taken care to select a tenant by proper referencing and verification of suitability is unlikely to allow that chosen tenant to sub-let (assign or transfer the tenancy) to another, without the landlord’s permission. In the past, tenancy agreements always tended to prohibit subletting or assignment.

Now, standard terms in residential tenancy agreements are subject to the Unfair Terms in Consumer Contracts Regulations 1999, administered by the Office of Fair Trading (OFT). The OFT has issued guidance to the effect that absolute prohibitions on assignment and sub-letting could be considered unfair and, therefore, void in terms of the regulations.

Landlords wishing to retain a degree of control over assignment and sub-letting are advised to ensure that the tenancy agreement allows assignment or sub-letting only upon landlord’s consent (which cannot, by law, be unreasonably withheld). Alternatively, the tenancy agreement should be framed in such a way as to allow the tenant to terminate it easily if they are unable to recommend to the landlord a suitable person to take over the tenancy.

Even if the tenancy agreement does not provide for it, it is suggested that the landlord should always agree to re-let the property to a suitable new tenant, allowing the original tenant to terminate their agreement early if they wish. If the prospective new tenant is considered suitable, and there is only a short period remaining of the original agreement, the landlord might consider offering a longer term to help prevent a void period.

If the tenancy is a contractual periodic tenancy, or a statutory periodic tenancy that has arisen at the end of a fixed term, the tenant cannot by law give the tenancy or sub-let to someone else unless the landlord agrees that he or she can. A periodic tenant can end their tenancy by serving notice to quit.

If the tenant has paid a premium for the property (a lump sum, possibly in addition to a small rental payment or a sum paid as a deposit which is greater than two months rent), the tenant is able to sub-let unless there is a term in the tenancy agreement preventing this.

 

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