What Landlords Need To Know About Subleasing

Table of Contents

Are you a property manager or a landlord? If so, you should understand the importance of ensuring that every property unit is rented while monthly rents are being paid promptly. Yet, it must be stressed that circumstances can change suddenly for renters. As a result, they may need to move out earlier than planned.

Whether it is to relocate for a new job position or to move into a new home, unexpected situations can arise at any time. When this happens, tenants must adjust to these significant changes. If this happens to your tenant, you should not be surprised if your tenant plans to sublease your apartment units.

However, it is equally important to understand what subleasing is and if you should allow your tenants to sublease your apartment units. Keep reading this comprehensive guide to acquaint yourself with subleasing. So, let’s dive in!

What is a Sublease?

A sublease represents a short-term lease contract that is agreed upon between an original tenant whose name is on the original lease and a new tenant whose name is not. Oftentimes, a sublease involves the original tenant renting out a room or an entire property to a subtenant for a certain period shorter than the original lease period.

With subleasing, the original renter can either gain or move a roommate without going against their lease terms. In this case, the subtenant must report directly to the original tenant. Any damages incurred by the subtenant must be known by the original tenant. After all, the latter is responsible for the subtenant’s payment, as well as any damages.

The sublease ensures that the subtenant has the right to take over the rented premises from the original renter. Oftentimes, the subtenant pays rent to the original tenant, who must then pay the rent directly to the landlord. However, it is also possible for the subtenant to pay directly to the landlord.

Even this doesn’t stop the landlord from holding the original tenant directly responsible for any damages incurred by the subtenant, as well as the rent. As mentioned earlier, this makes it imperative for the first tenant to inform the landlord before making any attempts to sublease the premises.

Short Term Leasing vs Long Term Leasing

Short-term subleasing and long-term subleasing are two possible types of subleasing you should know.

Short Term Leasing

Short-term leasing often involves the original tenant of a premise planning to leave the premise for a short period. For instance, during holiday seasons or vacations, students can sometimes rent out their rooms as they visit their hometown.

In another scenario, you may have someone deciding to travel for a few months. However, having the room empty while the rent runs is not suitable. As a result, they may decide to rent out the room for that specific period.

Long Term Leasing

Long-term leasing involves more of a permanent change of location for the original tenant, who may then intend for the new tenant to take over the residence until the terms of the lease expire. For instance, if an original tenant pays for a rent, but after a period, there is a need to change location (for job positions or new homes), the most suitable option is long-term leasing.

Usually, when it comes to long-term leasing, tenants may choose to sublet. However, any responsibility for the property is then passed from the original tenant to the new tenant.

The Subleasing Process

As a landlord, you must understand how the subleasing process works. This ensures that any form of disagreement is prevented in the future. Usually, the two tenants ( the original tenant and the subtenant) must agree to and sign a sublease agreement before anything can be made legal.

Typically, this sublease agreement should include:

  • The tenant that is liable for damages.
  • The tenant is responsible for the rental payment.
  • The tenant that will report directly to you (the landlord).

Once the sublease agreement has been signed and completed by the tenants, then the subtenants can move into the property. As the sublease contract is being agreed upon, the responsibility for the subtenants falls on the original tenant.

If the subtenant does not make the full payment at the right time, the responsibility for this payment falls on the first tenant. Once the terms in the sublease agreement expire, the original tenant can either assume the tenancy of the premises again or simply allow the landlord to lease out the unit to another interested party.

As the landlord, you must include a certain sublease clause in the first lease contract between you and the original tenant. This is important before subleasing can even take place. This sublease clause represents an essential component of the contract, which displays any permission if your tenant wishes to sublease your property.

After all, not all landlords will want their property to be subleased. By adding a sublease clause in the original lease contract, you confirm your tenant’s right to sublease the space.

It must be stressed that subleasing a rental unit without the permission or consent of the landlord (or without abiding by the terms of the initial lease contract) is totally wrong. For this reason, your written permission to sublease your property remains essential.

Anytime a tenant subleases a property, it is their – not the landlord’s – duty to find a suitable new tenant. Yet, as the landlord, the onus is on you to ensure that the subtenant that occupies your property is the right person. To promote the success of the lease, some basic steps you should follow are:

  • All sublease tenants must be properly screened. This is essential since it confirms if the subtenant has the means to pay for the rental space.
  • You must ensure that the terms of the lease are well-drafted and all parties involved understand the relevance of these terms. This will help eliminate the prospect of any disagreement in the future.
  • You should ensure that all monthly payments are made promptly. As your tenant looks to sublease your apartment, they must remain on the hook for the rent.

Conclusion

You are responsible for managing or maintaining your property. It must be stressed that the right of a tenant to sublease a property varies from one state to another in the United States. For instance, states like New York make it illegal for any landlord to limit their tenant from subleasing a property. However, in other states, no law restricts a landlord from refusing their tenant’s request to sublease their property. For this reason, to prevent any legal issues, it is important to make your findings on the local laws before you outline the details of your sublease clause.

Marla Coffin
Marla Coffin
Share:

Looking for help with Property Management?

Marda Management is a full‑service property management company, handling properties of all sizes for investors and owners worldwide. So if you manage rental properties…

Complementary Optimization Meeting

Submit your e-mail address below and we’ll reach out!