The answer to your first question about legality would be answered in the lease between your acting landlord (tenant) and the owner of the house. If the lease between the owner and your landlord prohibits subletting, you would be correct in that your tenancy is illegal. This in itself should be good cause for you to terminate your tenancy and move out. From the rest of your story, it seems as though you have a pretty good argument for a "constructive eviction" based on the breach of the "covenant of quiet enjoyment" that is contained in all leases in Colorado. In layman's terms this basically means that someone or something is preventing you from enjoying your tenancy. Be careful though, it is a prerequisite for you to actually move out if you claim this...you can't claim constructive eviction and still occupy the property. All this being said, you would be well-advised to send a letter - certified - to your landlord and demand that he/she stop all the things you want stopped or ask to break the lease. Things like this can get very expensive if lawyers get involved and the best practice is to try and work out the difference informally.