What is subletting?
Subletting usually happens when an existing tenant lets all or part of their home to someone else.
It's important to remember that if the tenant move-out and on-rents the property to someone else, their tenancy legally continues and they remain responsible to the landlord.
Is there a breach of the tenancy agreement?
Landlords can't prevent tenants subletting their homes unless there is a special provision in the tenancy agreement prohibiting this.
It is important to be very precise in your tenancy agreement. If you don't want to allow your tenants to sublet properties they rent from you, make this clear from the start.
As a landlord, you're allowed to include the following clauses to your agreement:
- You can prohibit a tenant from subletting the premises without your (landlord's) permission
- You can nominate a maximum number of occupants (including tenants) who can permanently live in the property
- You can prevent tenants using their rental property for temporary/ holiday rental accommodation (in other words advertise their property as whole or any part of it (such as a room) on sites like Airbnb or bookabach)
In the circumstances where these clauses are in the tenancy agreement, a tenant will be most likely to have broken a term by subletting a property. On this basis, landlords can take further action against the tenant.
So, you've read your tenancy agreement thoroughly and learnt that the tenant is actually in breach of their agreement and the Act. Before going ahead and taking any further action, you need to collect the evidence.
Schedule a property inspection
Make sure you give tenants the right notice to conduct one. Take note on who was present during the inspection, check the number of beds, take photos and notes of any unusual personal items or anything that can prove your suspension that more people (or other people) than the ones on the tenancy agreement live in your property.
Collect signed written statements from witnesses who can confirm that someone else lives in the property. Neighbours, property managers, police, and other tenants are considered 'good witnesses'.
Check if your property is listed on sites like Airbnb or bookabach.
Pursue your legal options
It is always best to act fast so that you can remedy the situation as soon as possible.
If you believe the tenant is in breach of their responsibilities under the tenancy agreement by subletting the premises without consent, a landlord can serve the tenant with 14 days’ written notice requiring the tenant to remedy the breach.
If they don’t respond or comply, you can try involving a mediator who can be a go-between you and tenants. And lastly, you can apply for the Tenancy Tribunal to rectify this situation, but you need to make sure you have enough evidence to support your claim.
The Residential Tenancies Act states that subletting without the landlord’s permission is deemed an unlawful act and a claim for “exemplary damages” of up to $1,000.00 can be included in the application to the Tenancy Tribunal.
A recent Tenancy Tribunal decision about subletting saw the tenant paying the revenue generated from subletting to the landlord.
How can you avoid this happening in future?
First and foremost, to help avoid any ambiguity, make sure you include the right clauses specifically prohibiting subletting in your rental agreement from the start. This will give you clear legal recourse if a tenant sublets one of your properties against your wishes.
When selecting tenants, background checks are essential. They will give you a confirmation that the person intends to rent your property is who they say they are, can afford to pay the rent and has good references from past landlords.
This also highlights the importance of regular property inspections during the tenancy. They can be used to not only address any maintenance issues requiring attention but might help to identify tell-tale signs of subletting.
The information contained in this article is exclusively for promotional purposes. It does not in any way constitute legal advice and should not be relied upon as the basis for any legal action or contractual dealings. The information is not and does not attempt to be, a comprehensive account of the relevant law in New Zealand. If you require legal advice, you should seek independent legal counsel. myRent.co.nz does not accept any liability that may arise from the use of this information.