A Landlord’s Guide to Subleasing

Posted by Teresa on June 2, 2010 under Landlord and Tenant FAQs, Landlord Paperwork and Forms, Tenant Screening & Background Checks | icon: commentBe the First to Comment

Leases begin and end; tenants come and go. Often, life interferes with details like legal documents (leases) and a tenant comes to you with an announcement: “I’m moving, but don’t worry—I found someone to take over my lease!”

For some landlords, this is when the worrying begins. For others, it’s not a big deal—having a new tenant without advertising and showing the rental unit is the best part about subleasing.

Subleasing is when a tenant assigns his or her lease to a third party; in effect, they are renting the unit from you, while renting it out to someone else.

To protect yourself, you should be aware of the following when considering whether or not to allow a sublease situation in your rental property:

1. Make sure the original tenant knows that a sublease itself does not release them from the original lease. If the sublease renter defaults on the terms, the original lessee is still responsible.

2. If you as landlord choose to release the tenant from the lease, then the sublease renter becomes responsible for rent and other obligations of the lease, and you become responsible for responding to the sublease renter’s needs under the lease.

3. In many cases, landlords do not release the original tenant from the lease, so the original tenant collects the rent from the sublease renter, and pays the landlord per the terms of the lease. The original tenant is also responsible for any damages to the property caused by the sublease renter.

4. You are still in control—not only can you approve or deny the applicant who wishes to sublease, but you can refuse to participate at all in a sublease situation. You then handle the tenant’s breaking of the lease agreement the way you normally do, whether it’s collecting the balance of the lease period’s rent, keeping the security deposit, or agreeing to let them out of the lease providing you find a new tenant.

5. Keep in mind that tenants don’t always inform landlords of their plans. Sometimes they move out and let their sublease renter move in—and you’re none the wiser. You are under no obligation to accept the situation, and after checking with your legal advisor, may be able to start eviction proceedings against the sublease tenant and the original tenant, too.

If your tenant asks about subleasing your rental property, check with your legal advisor first. To ensure you’re protecting your best interests, as well as your other tenants’, insist on full application procedures and tenant screening on the sublease renter.

Legal disclaimer:
The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining legal advice applicable to your situation.

Pre-screen all tenants as part of your standard application process. Background and credit checks will help ensure you rent to qualified tenants. For more landlord resources, including forms and information on tenant screening, turn to E-Renter.com.

When Tenants want to Sublease

Posted by Teresa on November 23, 2009 under Landlord and Tenant FAQs | icon: commentBe the First to Comment

subleasing photo on tenant screening blogSometimes a tenant needs to move before the lease is up. In a good rental market, a landlord can find a new tenant without much time or effort. When there are more tenants than rental units, landlords have the luxury of choice regarding allowing tenants to sublet.

However, when the rental market has excess inventory and filling vacancies is more difficult, a tenant who wishes to sublease to another person could be doing the landlord a favor. Certainly, the hassles of advertising and showing the rental unit are eliminated—but there are plenty of issues to consider before allowing a sublease.

In a sublease situation, the tenant who wishes to move without breaking his or her rental agreement “leases the lease” to someone else, who agrees to uphold the terms of the agreement. The original signer is still responsible for the lease, and the landlord must approve the arrangement.

But tenants don’t always seek landlord approval. If you’re receiving rent checks signed by Amy Doe for a unit that was leased to Jane Smith—you may have an unapproved sublease situation. You are under no obligation to accept Jane Smith’s sublease if you did not agree to it. Check with your legal advisor, but you may be able to start eviction proceedings in this case.

In this challenging rental market, it might be a good idea to offer Amy Doe a new lease—if she passes your tenant screening procedures first. It is entirely up to the landlord to decide whether to enter into the agreement or evict.