Subletting, subtenancies and assignation

A subtenancy is where a tenant lets part or all of the accommodation to another person. The tenant becomes the landlord of the subtenant and remains the tenant of the original landlord. The person who rents the accommodation from the original tenant is a subtenant of the landlord and tenant of the original tenant.

Subletting and subtenancies are different from assignation. Where a tenancy is assigned the legal effect is that the person who takes the assignation (the assignee) from the original tenant (the assignor) effectively steps into the shoes of the assignor. This happens once the landlord is advised of the assignation. All the rights, duties and responsibilities of the assignor transfer to the assignee. The assignor has no further liability unless a written or verbal agreement provides otherwise.

In some situations those regarding themselves as tenants may in reality be subtenants. This is often the case where there is only one lease in respect of accommodation that is not in the names of everyone who lives there. This means people are living in the property that have no direct relationship with the landlord. The landlord may not even know of their existence. Such individuals are likely to be classed as subtenants of the head tenants in the flat.

Subletting or assigning a tenancy without the approval of the landlord is unlawful. [1] Tenancy agreements generally contain a similar prohibition. Where there is unlawful assignation or subletting, the landlord can treat it as a breach of the terms of the tenancy agreement. This could lead to an action for eviction. [2] Alternatively the landlord may accept the arrangement. In this case the assignation or subtenancy would become lawful.

If the landlord seeks to evict due to unlawful subletting or assignation the unlawful subtenant has no rights as against the landlord. If the tenant is evicted then the subtenant is evicted as well. It appears that, at common law at least, where the subtenant is unlawful, decree for ejection against the tenant alone is sufficient and it is not necessary to call or cite the unlawful subtenant. [3] However, if the identity of that subtenant were known, it would be wise. The position is otherwise where the subtenancy is lawful. [4]

Where the assured tenant has lawfully sublet the house or any part of it the subtenant is protected under certain circumstances from a repossession action against the principal assured tenant. [5] If the tenancy is lawful and the principal tenant is being evicted, the subtenant will have the right to continue in occupation and will be an assured tenant.

However, there is some apparent confusion in the legislation. Section 28(1) of the Housing (Scotland) Act 1988 specifies that the subtenancy must be an assured tenancy. However the head note reads 'Effective Termination of Tenancy or Subtenancies which are or are under assured tenancies'. This is problematic since it is also not clear from the Act whether it is possible for a subtenant of an assured tenant to be an assured tenant themselves, given the resident landlord exception under schedule 4, paragraph 9 of the Act.

Where a person assigns unlawfully the landlord has the choice to:

• accept the assignation

• refuse the assignation and seek damages and payment of any liabilities from the assignor

• recover from both the assignor and the assignee, if the assignee has received any benefit under the unlawful assignation

If permission is required but is not obtained a valid assignation cannot take place. However an assignee that has taken the assignation in good faith may have a claim against the assignor for damages.