Case Study - Landlord and Tenant

When a sub-tenant wants to leave but they do not want to help get vacant possession, what do I do as a landlord?

As a landlord, you may have rented out your property to an individual or company on the basis that they will then sub-let the property to others who would actually be living there.  There are many companies or individuals who will do so and act as the middle man.  The advantage for the landlord is that they do not have to deal with the individual needs of tenants, and they have a flat rate of rent, which the landlord hopes is a bit more secure because it is not subject to a number of individual’s circumstances.  But what happens if the landlord’s tenant (“the sub-tenant” doesn’t want to be involved anymore but there are tenants still in the property?

In that situation, the landlord has two options.  They can:

1. Either accept the surrender by the sub-tenant and become the landlord of the people actually living there; or

2. Refuse the surrender until the sub-tenant is in a position to give back the property without anyone in there (assuming there is a requirement to give vacant possession).

Whatever choice the landlord decides to make will depend on the individual circumstances.  We set out below some of the advantages and disadvantages of each approach.

1. If there have been issues with the tenants, the landlord may not actually know about them but they may inherit them;
2. The landlord may not receive all the documentation taken about the tenants, i.e references and residency checks.  If they do not provide them, then the tenants may not be willing to give them to the landlord afterwards;
3. If the Landlord wants to evict the tenants, they will need all of the information from the sub-tenant about when they served the prescribed information, registered the deposit, gave the Energy Performance Certificates and Gas safety.  If any of that information is missing, it might be difficult to obtain possession. 
4. The landlord will be subject to the terms of the tenancy that the sub-tenant granted, for example, if the rent being paid included services that the landlord had not previously been responsible for or included all of the utilities.

The advantages can be if there are good tenants in there, then there is continuity of payment and less disruption to the landlord as they will not need to find new tenants for the property.

If the outgoing sub-tenant is not willing to deal with obtaining vacant possession for the landlord and simply stops engaging, this can leave the landlord in a very problematic situation.  This could leave the tenants frustrated as their needs or concerns are not being met and they may ultimately withhold their rent while any issues are not dealt with.  The landlord may need to go to Court to force the sub-tenant to act or bring a claim for any outstanding rent.  If the sub-tenant has disappeared, then this can cause practical issues.  In certain situations therefore, it may therefore be better to try to get the outgoing sub-tenant to engage, do a hand over including handing over all of the paperwork and get them to act as a liaison with the tenants who may not even realise there is a third party landlord involved.

Either way, it is best to speak to your solicitor before anything is agreed so that they can help you consider all of the circumstances and what is the best option for you.  If you wish to discuss this with us, then Claire Darby, Head of our Property Litigation and Dispute Resolution team would be happy to speak to you or arrange an appointment for you.