What's a Residential Sublease Agreement, and When Do You Need One?

A sublease agreement is considered a written document that offers the lessee a chance to pass on the responsibility and rights of tenancy to another person. The lessee might need to get housing elsewhere during the active lease term, and a sublet agreement could be a beneficial option.

The paperwork generally covers the typical condition of an original lease agreement, which gets applied to the new relationship between the subtenant and the current tenant. In most cases, it's important to get the landlord's consent and follow the information within the master lease to avoid confusion and issues.

However, the sublease agreement might contain additional conditions or terms for the subtenancy, which get mapped out in the contract created.

This formal document is something many people get confused about. If you have a rental contract and allow subletting, you might find your tenants doing this. It's wise to know what it should include so that you and the existing tenant are on the same page.

What's Subletting?

Subletting is where you re-rent the leased property to another party (third party). Sublease and sublet are often used interchangeably and mean the same things. The two parties who use a sublease agreement are referred to as:

• Subtenant and Sublessee - This is the third-party renter who subleases the property from that original tenant.
• Sublandlord and Sublessor - This is the person who has a rental agreement with the landlord of the property and is also called the original tenant.

It's crucial to note that for a sublease agreement to be successful, the master lease must contain a section that allows the sublessor to get a subtenant. This form should contain helpful information, including who handles the sublease payments and whether or not another security deposit is required.

How to Sublet a Rental Property

If a tenant is currently leasing a rental property for a fixed term and feels they may be required to break it, they can consider subletting if the landlord agrees to that. It's important to understand what a sublease agreement looks like and even consider drafting one for the tenant.

Though it's up to the tenant to create a sublease agreement, the landlord must understand what's included and provide written consent to the existing tenant to do so. Follow the steps below to find out how a sublease works:

1. Revisit the Original Lease Agreement

The tenant must locate the existing lease, which was put into effect when they moved in. They should read through the original lease agreement, searching for clauses that mention a tenant's rights for subletting.

There will be a provision granting the occupant authority to create a sublease agreement. If that's there, they can do so, but they can't violate the conditions within the rental contract. For example, many state and local laws don't allow the tenant to charge another security deposit to the subtenant.

2. Consult with the Landlord

If original lease agreements don't contain sublet clauses, the tenant must get the landlord's consent by contacting him or her to get permission. It's crucial that the answer is in written form, as well, and the landlord should sign it, agreeing that the tenant can craft a sublease agreement.

A formal document used for this purpose is the landlord's consent to sublet template. It's often implemented so that the primary landlord of the property can convey permittance of the subtenancy. However, they can also use this to stipulate certain conditions.

It's up to the sublessor to do this before or after finding a suitable subtenant. However, if the tenant goes through all the steps of locating a sublessee without getting permission from the landlord to create a sublease agreement, they might be denied and do all that work for nothing.

3. Establish Who Will Pay Rent

The tenant will get pre-authorization to draft a sublease agreement from the landlord. After that, it's time to determine how much to charge for the sublet. This depends on many factors, including:

• Urgency - If the tenant must re-rent the property quickly, they may want to get the best possible deal to entice renters immediately.
• Marketplace - Check out similar properties to see what they're getting rented for. Likewise, the tenant can have the subtenant take over the rent payments they were using. Generally, it's not possible to charge another security deposit unless the landlord offers to give the tenant back theirs. However, this varies based on the state.

4. Find a Subtenant

It's important for the original lessee to find a trustworthy new tenant for the premises. They should consider subletting to people they already know who are dependable. However, when that isn't possible, they can market the property and mention they want the potential tenant to sign a sublease agreement.

There are many advertising options online, such as Airbnb, Zillow.com, Craigslist.org, and sublet.com.

5. Conduct Showings

Once the tenant has a few potential subtenants, they can reach out to interested parties. They must ensure that they respond to emails, text messages, and calls promptly. Overall, before signing a sublease agreement, the prospects will want to see the unit personally. Tenants can maximize the showing effectiveness by:

• Keeping the Place Clean - Ensure that the space is clean, which means wiping down the surfaces, picking up clutter, and mopping/vacuuming the floors.
• Have the Paperwork Ready - Following the master lease, create a sublease agreement that's ready to go. If the tenant finds a suitable subtenant during the showing period, they can have them fill out an application or sign the sublease on the spot.
• Be Accommodating - People are generally more trusting and receptive to those who are professional. Make sure the tenant knows that they should promptly respond to inquiries, schedule dates and times to show the property, and be punctual when those times come.

6. Screen for Potential Subtenants

The original tenant must understand that they're renting the property to the new tenant and are still liable for whatever was in the original lease agreement. Therefore, they must have confidence in the subtenant they choose. It's wise for them to verify the person's ability to rent with these tips:

• Fees - Get a sublet fee established for filling out applications. This helps the tenant create a sublease agreement and do a background check on each applicant.
• Employment Verification Letter - This form gives information about the potential subtenant, such as their job title, the company they work for, how much they're paid, and when they're paid. The employer the signs off on it to show that the data is accurate.
• Rental Application - Property owners often carry these out, but the tenant can do so for a subtenant. Likewise, the landlord might do this themselves to protect their assets.

7. Settle on the Terms and Conditions

During negotiations, it's important to settle on the conditions within the sublease agreement. Participants must communicate about these key elements:

• Terms - How long the sublessee will have possession of the premises
• Costs - The amount of monthly rent charged, security deposit, and all utility services

8. Fulfill the Sublease Agreement

When the original tenant finds someone who accepts the sublease agreement terms and passes the screening tests, they can present the sublease agreement for signature. Everything should be written or typed into the form, and then they should get the signatures of the landlord, sublessee, and sublessor.

FAQs on Subletting

Is Subletting Illegal?

In most cases, no. However, there are times when it could be. The existing tenant's right to sublease that rental property depends on many factors, such as:

• Association Rules - Rental units located within a large project might have to follow specific guidelines imposed by the association. It's crucial to ensure that subletting won't be a violation.
• State Laws - Some states, including New York, have laws declaring that the tenants can sublet the unit regardless of what's in the lease agreement.
• Landlord's Consent - The lease agreement often contains a clause stating that the tenant must get the landlord's permission to create and carry out the sublease agreement. Most landlords require the new occupant to be screened before accepting them.
• Content of the Lease Agreement - The current rental contract might prohibit subletting. If that's the case, the tenant cannot lawfully create or use one.

Do You Need Permission to Sublet?

This depends on many elements. You're technically allowed to use a sublease agreement and sublet the property without prior written consent if the rental agreement permits that.

However, most rental agreements grant the tenant a right to sublease, but only if the landlord is notified. Some states give tenants the undeniable right, even if it's not in the original lease. However, they must still inform the landlord of the sublease agreement.

How Does One Terminate the Sublease Agreement?

Sublet agreements should have written terms within the contract to determine how to terminate the sublease agreement. It's the same situation when someone gets out of a traditional rental agreement. If the subtenant doesn't want to continue with the subtenancy, they should think about their options, which include:

• Speaking to the Other Party - If there's no justifiable way out, the subtenant should talk to the tenant or landlord. They might be able to offer a deal that both parties agree to.
• Violations - If the sublease participant violated any conditions within their contract, the other party could end the agreement with cause.
• Termination Clause - The tenant or landlord could write a clause in the sublease agreement that allows either or both parties to terminate it with an appropriate amount of notice.

Those who can't accomplish the exit strategies listed above and still wish to cancel the sublease must understand that they could face financial consequences for doing so.

Can You Choose Eviction for a Sublease Agreement?

The subtenant (sublandlord) can evict a subtenant who isn't fulfilling the terms of their sublease agreement. Things get tricky if the sublandlord and subtenant aren't paying rent as required in the master lease.

If rent payments don't get taken care of, the original tenant is required to pay them still. This can cause problems if they don't have the money.

However, the primary landlord must file an eviction from the original lease to regain control of their property. That means they will need the original lease and the sublease agreement.

Can You Legally Charge Sublet Fees?

In most cases, charging sublet fees is conditional on where the sublet situation happens. Some states claim that landlords can only charge enough to cover the costs of a new occupancy, such as screenings. Other states are lenient and don't dictate set amounts.

Overall, it's wise for the individual wanting to charge a fee to use a reasonable amount for the figure.

How Should a Tenant Ask a Landlord to Sublet?

If the lease agreement doesn't mention subletting protocols, the tenant should contact the landlord to get official authorization to sublease those premises. It's wise for them to be professional about it, and they should:

• Explain Their Reasons - Ask the tenant why they wish to sublet to another renter. They should be valid and acceptable, such as having to move away for school or work.
• Provide Appropriate Dates - Ask your tenant for the dates in which they need to sublease the property.
• Trustworthy and Able - The tenant must convey to the landlord that they're capable of maintaining a subtenancy. This comes with research on being a sublandlord, and they'll likely need some of the same information you possess. Consider asking the tenant questions about how they would handle certain situations to ensure they can do it.
• Seek Comfort - Landlords are often uneasy about having a new occupant in the property for part of the lease term. Some of the control is taken away from them. Therefore, the landlord can get comfort from the tenant when they know the ins and outs and understand the situation. In fact, they might be willing to let the landlord help them screen for someone.

Is It Possible to Sublet a Room?

Yes. If the original contract and the co-tenants permit it. Here are a few common scenarios of a sublease contract for a room:

• Subletting as the Sole Tenant - Tenants who lease a whole property can save money and rent out a room if they get permission from the landlord and the master lease allows for it. This will establish a shared living arrangement, so it's wise to have a roommate agreement and a sublease.
• Subletting as a Co-Tenant - The subleasing tenant must get permission from the landlord here, but they also need approval from the other housemates. If the sublessor shares a property with other tenants and wants to leave the arrangement, replacing themselves with someone else, all parties must be on board with the chosen person.

Can a Tenant Sublet a Rent-stabilized Apartment?

This question primarily pertains to those in New York, and the short answer here is: yes if your landlord sanctions it. The landlord can legally refuse to do so, but they must provide a valid reason for withholding consent.

To clarify, a tenant with a rent-stabilized apartment can sublease the property to another party, but those who lease rent-controlled apartments can't. There's really only one rule for subleasing in this situation: the tenant cannot raise the rent paid each month. It must stay the same unless it's a furnished apartment. Then, the sublandlord can add a 10 percent surcharge.

Where to Find a Free Sublease Agreement Template

Residential sublease agreements can be highly beneficial when the original tenant decides they can no longer fulfill the original lease obligations and terms. It's usually up to them to draft an appropriate sublease agreement, but many landlords choose to do that for them. This ensures it's all done correctly.

If you require a master lease or want a free sublease agreement template, DoorLoop can help. It offers many forms which ensure that you create legally valid documents!