How Does A Sublease Work?

by Lesly Gregory | Published: May 2, 2022

When you're living in a rental property and need to leave before the normal lease is up, it might be less costly to let someone else take over your remaining time. To do this, you'll have to sublet your home.

A sublease agreement is basically a short-term lease that allows the original tenant to not incur any fees for moving out early. It's not a situation that works for everyone and can get tricky if unpaid rent comes into play. Mostly though, subletting prevents you from getting stuck paying rent on more than one place, and benefits your landlord by ensuring their property doesn't sit vacant if you move out early. You also avoid fees for breaking your lease.

What is subletting?

Subletting is when the tenant of a property leases out all or part of that property to another person, known as the subtenant. The subtenant takes over the monthly rent and essentially all the rules in the original rental agreement, however, it's not the landlord who's screening for new tenants, you are.

A subtenant has most of the same rights as the tenant, including the right to quiet enjoyment and habitability of the premises. The subtenant also must comply with all of the terms of the lease, such as paying rent on time and not damaging the property.

Not all subleases are the same, but the terms within the sublet agreement will make everything clear.

Why it makes rent payments tricky

All other potential issues aside, the most complicated thing to establish with a subletter is how to pay rent. You can set it up that the new tenant pays you, then you pay your landlord. This requires you to stay involved with a property you're no longer living in.

If the landlord is comfortable collecting rent from the new person, you can connect them directly when it comes to the rent. Just be aware that sometimes you have to play middle man.

What happens to my deposits?

The best way to handle your security deposit, should you decide to sublet and your landlord is OK with this plan, is to do what's known as a check-out/check-in. This means the landlord returns your deposit after an inspection of the property while collecting a new security deposit from the new tenant. This isn't something a landlord is required to do, but it's the best way to ensure everyone is covering their own damages.

The other options you have are to ask the subletter to reimburse you for your security deposit, meaning they'd get it back once the lease is up, or you can just wait it out. Both options have potential problems though. If the landlord withholds money for damages that are your fault and the subletter took over the deposit, they're essentially paying for your repairs. The reverse can happen if you wait until the end of the lease to get your security deposit back and they damaged the place.

When should I sublet?

There are a few different reasons a tenant rents their existing rental. Maybe you got a job offer in a different city and need to move, but don't want to break your lease. Or, you need to go home for an extended period of time for a family emergency or personal reasons. Maybe you're taking a summer job in a different location, but want to come home to the place you're currently living in.

For any of these reasons, subleasing is a popular option among both professionals and college students alike.

The advantages of subletting include having someone else cover the rent and live in the property to help take care of it through your lease term. You save money by not having to pay to live in two different places, and as long as any new tenants remain responsible, you won't have anything to worry about.

The disadvantages of a sublet agreement include any issues related to the original lease. Things like damages or breaking "house" rules or even getting rent in on time could all fall back on you as the original tenant. It's why even though this process may feel less "official" than when a landlord screens tenants, you should always ask for personal references and consider paying to conduct both credit and background checks before selecting a subletter.

steps for sublease

Steps for subletting a house

If you're considering subletting your house, there are a few steps you'll need to take:

1. Check your current lease agreement

You'll need to get your landlord's permission to initiate a sublet. Most landlords will have already written into the lease whether this is allowed or not, and how to go about starting the process of getting a sub-tenant.

As the current renter, it's up to you to follow protocol as stated in the lease, but it's also good form to speak to your landlord directly. Your landlord's consent goes a long way. They may even allow you simply break your lease agreement without any fee, saving you the time of looking for a new renter.

2. Check in with your renters insurance company

Your renters insurance policy may not cover damage caused by a sub-tenant. You'll need to check with your insurance company to see if you need to purchase additional coverage, or if it's something a sub-tenant must do as well.

3. Google state and local laws

There may be laws in your area that regulate subletting. For example, some cities require you to register your sub-tenant with the city government.

Some states also have specific laws in place, while others leave it up to the landlord.

4. Post your sublet

Once you have everything in order, it's time to find a sub-tenant. There are a number of ways to do this, including posting an ad on Craigslist or other online classifieds websites. You can also work directly with your landlord. They may already know of a potential sub-tenant.

5. Interview potential tenants

Once you've found a few potential tenants, it's time to interview them. Create an itemized checklist of what you want to know about each candidate. Make sure to ask about:

  • Employment situation
  • Rental history
  • How long they plan on staying in the property
  • Whether they've ever been evicted from a rental
  • Whether they smoke

You should also run a credit and background check to make sure they don't have any red flags in their past. You can contact previous landlords as well for a reference.

Other things to clarify are whether or not they have any pets and whether they plan on bringing in a new roommate with them.

6. Sign a sublease agreement

Once you've found the perfect subtenant, you'll need to sign a sublease agreement. This document will outline the terms of the arrangement, such as how long the sublease will last, how much rent the subtenant will pay and what the subtenant's responsibilities are.

Make sure you mimic what your lease states when it comes to house rules and responsibilities to avoid being ultimately responsible for issues your sub-tenant creates.

You, your sub-tenant and the property manager should all have a copy of this sublease for your records.

7. Check in periodically

Even though you've left the lease early, it's still your responsibility. Be sure to check in periodically to make sure the subtenant is following the rules of your lease agreements and taking care of the property. You may want to set up a schedule for how often you'll check in, such as once a week or once a month.

Will you sublet?

Subletting can be a great way to avoid breaking your lease or help you hold onto your rental if you have to temporarily move away. Just be sure to do your research, know what's allowed and follow basic steps of subletting to ensure everything goes smoothly.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
Categories: Renters

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