I believe my tenant is subletting the property (Western Australia)

Step one - be sure the tenant is subletting

If you believe the tenant is subletting to others (and not previously agreed), you should speak to the tenant and ask if they are subletting the property - DO NO accuse them, this is the worst thing you can do. Gently remind them of their obligations. 

  • The tenant is not allowed to sublet the property without the owner's written consent.
  • Check the section 'RIGHT OF TENANT TO ASSIGN OR SUB-LET' in the lease agreement. If the two answers in this section are 'No' it means the tenant does not have the authority to sublett the property or part of the property to someone else and therefore it is a breach of lease.

Warn them:

  • If you breach the agreement the lessor/agent can apply to the Magistrates Court seeking a court order saying you must fix the problem. Before doing so, they must give you a minimum of 14 full days to rectify the situation by issuing a letter or by using the Notice to tenant of breach of agreement – (other than failure to pay rent) (Form 20). If you don’t put things right within the time, they can issue a Notice of termination (Form 1C) to end the tenancy after an additional seven days.

Tip: Talking to your tenant on the phone or in person about this helps to reduce stress and tension in your relationship and appear as if you are not accusing them. After the phone call send them an email to outline your discussion, you may copy and paste bits from this article and references below.

Step two

You have 4 options:

  1. No further action (at this stage) - Ensure the warning is in writing to them or you have some kind of dairy notes of the discussion so you can refer back to this warning if the issue comes back up again.
  2. Give the tenant a Notice to tenant of breach of agreement – (other than failure to pay rent) (Form 20). Contact Cubbi and we will create the notice for you.
  3. Add the extra renters to the existing lease - if they are subletting but otherwise good tenants you may decide to give written permission to add the new renters to the existing lease and increase the rent to offset the extra risk and wear and tear to the property. For example, this might be 10% of the rent amount. We can create this agreement (Change of Tenants) for you and get all parties to sign it. We only recommend this option if the new renters/occupants are likely to stay for the duration of the existing tenancy agreement, otherwise, you will continually have to deal with new renters coming in and out which can be painful and risky to manage.
  4. Allow subletting - You could give written permission for the tenant to sublet the property and increase the rent (as per option 3 above) as a consequence. As this is typically a higher risk than the above option (3), a 20-30% increase in rent might be more applicable as a rough guide. This would give your tenant (head tenant) more flexibility to manage the ingoing and outgoing renters/occupants internally without you having to get involved and make a profit for managing the household. Other than the additional risk, the other big downside of this option is Landlord Insurance. You should also check with your landlord's insurance because you may not be covered if the property is sublet.

Please email hello@cubbi.com.au or Schedule a call with us to discuss your options in detail so we can best advise and outline the next steps.

References