April 24, 2019 Eview Group

5 Tips For Preventing Illegal Subletting

Illegal sub-letting is a huge problem for landlords and property managers across Australia. Although every effort is made to prevent this type of activity, the varied nature of it and capacity for tenants to make a decent amount of undeclared income makes it a significant issue for those renting out properties on a regular basis.

The rise of short-term holiday let sites such as Air BnB have been largely blamed for the steep rise in illegal subletting – but in fact this problem is widespread and doesn’t just affect tourist hotspots and desirable CBD locations. The consequences can be considerably destructive – from a practical, financial and legal perspective. Here we share five key actions you can take to minimise the risk of illegal subletting, ensuring peace of mind for you and your customers.

Investigate during routine inspections

When carrying out routine inspections within the property, keep your eye out for tell-tale items and arrangements that may indicate that rooms are being sub-let to holidaymakers or in a short-term capacity to drifters or workers. Tourist leaflets and pamphlets, fridges and tea-making facilities in bedrooms and locks on bedroom doors are all potential indicators of possible sub-let activity.

Adopt a sceptical approach

It’s always nice to look on the bright side – but where illegal sub-letting is concerned it’s better to be pessimistic and realistic. Assume the worst to avoid finding out about unsanctioned rental activity when it’s too late. Although your usual screening process is likely to be meticulous and thorough, it’s also important to consider the motives of potential tenants. When vetting beware of singles or couples looking for large, multi-bedroomed properties – they may be looking to rent rooms out. Also watch for individuals who rent multiple apartments then relist them – commonly known as ‘ghost hosts.’

Ensure that contracts are watertight

It goes without saying – but it’s worth remembering to ensure that legal contracts made between property managers, landlords and tenants are completely watertight. Include a clear ‘no sub-letting’ clause and clarify what this actually covers and entails to avoid a situation where activity may be legally justified. The contract should also state that illegal sub-letting will not be tolerated and may result in eviction.

Consult neighbours

If you have other tenants in neighbouring properties, it’s worth consulting with them to check up on anyone you suspect may engage in sub-letting activity. They’ll also have a vested interest in ensuring tenants are playing by the rules, as having random, unchecked individuals coming and going from the property raises a host of security issues.

Monitor popular sites to check up on tenants

Make a habit of checking sites such as Air BnB and Gumtree on a regular basis to see whether any of your properties are being presented as sub-lets either for short or long-term tenants. Google search your property by image to see whether it pops up on any standard lettings sites, too. This could be time-consuming – so signing up for a monitoring service could offer peace of mind for a small fee each month. This is a cost-effective and hassle-free way to guarantee happier, reassured clients.