Sometimes, even though a tenant intends to fulfill the lease agreement term, he can’t follow through. After all, life’s major adjustments—relationship changes, job transfers, health conditions, or family deaths—don’t occur at convenient, predictable times. When a tenant moves partway through a lease, he may wish to rent his space to a different tenant for the remainder of the rental agreement. But is it in a landlord’s best interests to let renters do so?
What Is a Sublease?
The arrangement described above is called a sublease. When a tenant sublets, a subtenant rents a unit from the current tenant. The original tenant remains liable to the landlord for paying rent and fulfilling the original lease’s terms. But the subtenant enters a new agreement to care for the property and to pay the first tenant. In a sense, the original tenant becomes the middleman between the landlord and the subtenant.
A sublease benefits the tenant by letting him collect rent on what would otherwise be an empty apartment. On the surface, it’s the ideal solution. A sublease allows the tenant to honor his rental agreement, save money, and avoid the risks of leaving the unit unoccupied.
How Does a Sublease Affect the Landlord?
Unfortunately, a sublease is often less ideal for landlords. Most landlords implement thorough screenings to ensure tenants will reliably pay their bills and care for the property. But if a subtenant inhabits a unit, you cannot guarantee that the new occupant will exercise the same responsibility as the original tenant.
Even if your tenant chooses a subtenant who meets your screening criteria, subleases present additional challenges. Because the initial tenant remains responsible for the terms of the lease, a landlord must address any problems with the subtenant through the original tenant. This lack of direct liability makes a landlord more vulnerable to theft or property damage because it’s harder to oversee the subtenant’s occupancy and to take legal action when necessary. In addition, if the subtenant fails to pay rent, the original tenant may struggle to maintain his payment responsibilities. In such cases, any eviction proceedings must be brought against both parties.
What Are the Alternatives?
Due to these concerns, most landlords prohibit tenants from entering subleases. However, some state and local laws grant tenants the right to sublease. Check the rules that apply to your property and take precautions to minimize your risks.
Even if you can legally prohibit subleasing, you don’t have to leave your tenants with zero options if they abandon their units early. If you would be open to subleasing in certain circumstances, draft your rental agreement to require your written approval. Another alternative is to allow an assignment of the lease. An assignment effectively ends the original lease and starts a fresh lease with the new tenant. This practice enables you to screen the new tenant and fully maintain your legal rights.
Considering these risks and alternatives helps you offer flexibility to tenants with changed circumstances while protecting yourself and your property.
About Rentals America
Rentals America provides full-service property management for residential rental properties. Our team is wholly dedicated to property management, and we’re here to help landlords navigate the rental market.
