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Tips & Tricks on SUBLETTING

July 25th, 2016 Fantastic Team Tenancy 101

Last update: 5 months ago

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Table of Contents

1) What does a tenant need to know before the subletting process?
2) What is the first step in subletting your space?
3) How to approaching your landlord and ask for permission?
4) What specific questions should a tenant ask a landlord when reaching out?
5) Where to find responsible tenants to sublet your space?
6) What the sublet contract should include?
7) What are the dos and don’ts of subletting your place?
8) Is there any other advice or caution regarding the subleasing process?

1) What does a tenant need to know before the subletting process?

The difference between Reletting, Subletting & Assigning:

Subletting: When the tenant signed under the tenancy agreement rents a part of the premises, or all of the property to another renter. The subtenant owes rent and has to comply with the original lease terms, but the principal tenant remains ultimately responsible before the tenancy agreement. So, if the sub-renter owes back rent, the property landlord could sue the principal tenant.
Reletting: The property landlord relets the housing with a new renter with an entirely new tenancy contract signed by both parties. This way the original tenancy agreement with the former tenant is voided.
Assignment: If you want to leave, but the property landlord will not cancel your lease nor allows a sublease, you can assign your lease. An assignment is when the tenant transfers all remaining interests in the lease agreement to another person, called the “assignee” (you’re the “assignor”).

The sublessor (subtenant’s landlord or the primary tenant) is fully responsible for the full rent and any damage caused by the the subtenant.

The property landlord can not impose parts of the tenancy agreement against the subtenant.

If the subtenant refuses to leave at the end of the tenancy, the property landlord can evict both the principal and subtenant.

2) What is the first step in subletting your space?

CHECK THE TENANCY AGREEMENT.

As a tenant, the right to sub-rent the rental property or a part of the housing, including new roommates, is defined be the tenancy agreement. If the housing contract does not mention subleasing, it is usually allowed. However, most leases do require the property landlord’s permission as well as an approval of any new renters.

3) How to approaching your landlord and ask for permission?

Subletting can be quite tricky. It’s always best to approach your landlord in a modest and polite way, because you should have all that settled within the tenancy agreement. However, beware if the new landlord has initiated a subletting scam! Some landlords take advantage of people in need of tenancy against high rent. In case your landlord is okay with sub-renting, but there is no housing agreement about it, he simply may take in the full rent, which surpasses the one in the primary agreement. In this situation, it is the tenant who must face the law, while the housing landlord is free of liability and still takes in all the cash.

4) What specific questions should a tenant ask a landlord when reaching out?

When it comes to the most important question of subletting, the landlord has to reply within 14 days. If the tenant does not hear from the landlord within 14 days, the law says the renter can assume the landlord consents to the request.

5) Where to find responsible tenants to sublet your space?

There is no secret formula here. It’s up to the landlord/sublandlord to reach out, find, evaluate and pick a responsible tenant. The Internet is vast enough and it’s full of both demand and supply.

6) What the sublet contract should include?

How much rent is due, including any increases (called escalations)?
How long the tenancy lasts (also known as the term of the rent), when it begins and under what conditions you can renew it?
What is the size, quantity and location of all signatures needed?
Does the tenancy include utilities – phones, electricity, water, or if those are are to be paid on a separate occasion?
Who is responsible for all property maintenance expenses, taxes and insurance costs and how they’ll be calculated?
The amount of tenancy deposit and if a letter of credit is eligible instead of cash
A detailed description of the housing: square footage, parking spots and all other amenities
List all home improvements the property lord will make (if) before you move in as a tenant.
Make sure you issue an independent inventory report for when time comes for an end of tenancy cleaning. (more after tenancy tips for tenants)
A non-disturbance agreement in case the landlord sells the property, or his lender forecloses on him.
Clarify that the premises can be only used for purposes that comply with the master lease.
Who is responsible for maintenance and repairs?
The Subtenant, at own expense, carries insurance similar to that required under the master lease. The sub-renter must include the sublandlord and the property landlord as additional insured parties on all insurance policies.
What is the extent of alterations and improvements the sub-tenant is eligible to carry?
What “Events of Default” will cause the subtenant to default under the sublease agreement?
What “remedies” will apply in case of an “Event of Default?
How and under what circumstances you can break the lease?

7) What are the dos and don’ts of subletting your place?

When subleasing – DO:

Sign and double check the subtenancy agreement in details!
Make sure you fully understand your responsibilities under the sublease!
Request a security deposit!
Get a professional inventory report!
Set a list of rules!
Beware scams and shenanigans!
Maintain a polite and friendly relationship with your landlord!
Negotiate how and when payments are due!

When subleasing – DON’T:

Don’t think you can simply sublet to strangers!
Don’t think you can simply overcharge!
Don’t let to anybody before you meet in person!
Do not think your sub-renter won’t use any of your belongings!
(That’s normal)

8) Is there any other advice or caution regarding the subleasing process?

No matter if you are a landlord or tenant, make sure you always do your homework. If you lack the skill and effort needed to fully elaborate on your duties and responsibilities, you will most certainly end up in an unpleasant mess.