Maybe you’re a tenant with six months left on your lease agreement, and you have to move three states away for work. Or maybe your roommate is the one who’s moving three states away, but you want to stay. What to do?
Sublet, of course.
A sublet or sublease agreement is a lease agreement between a tenant and a sub-tenant, where the original tenant effectively becomes a middle-man in between the landlord and the sub-tenant, and assumes both landlord duties to the sub-tenant and tenant duties to the landlord. The original tenant is still legally responsible for paying the rent to the landlord and abiding by all of the original terms of the lease agreement. Generally, they (you) collect rent from the sub-tenant, and pay rent to the landlord. If this sounds like a pain, that’s because it can be one, but there are some advantages as well, such as allowing flexibility to move out early, or rent out a vacant room, or even earn a profit by charging the sub-tenant more rent than the original lease agreement charges.
So what do you need to know, if you’re considering subletting your apartment?
Step 1: Ensure your original lease agreement allows subletting.
Read your lease agreement very carefully to ensure it allows subletting in the first place. If it doesn’t, then you’re in violation of your lease and the landlord can pursue you through all legal channels available to them, including eviction and possibly financial penalties. If you will no longer be occupying the rental property, it’s a good idea to notify the landlord about what’s going on and give them the contact information for the sub-tenant in case of an emergency.
Step 2: When advertising your sublease, adhere to fair housing laws that apply to landlords.
You’re the landlord now, so you’re bound by all the laws that apply to landlords, including fair housing laws. Consider reading this article on rental advertising, tenant screening and fair housing laws.
Step 3: Screen the applicants like you’re the landlord (because you are)!
Do you want someone moving in with a 520 credit score who’s never seen a bill they felt like paying? Or perhaps a convicted felon? Or someone with a 140-pound mastiff? Does your original lease agreement even allow pets? Screen your sublease applicants, and remember that regardless of whether they pay the rent, you still have to pay the landlord. Finally, charge an application fee that will cover the cost of you to run background checks on them.
Step 4: If you’re adding/replacing a roommate, make sure they’re compatible.
This sounds intuitive, and it is, but people fail to do this all the time. Does the applicant work nights, when you work days? Do they like to party while you have your Series 7 to study for (or vice versa)? Are they obsessively clean while you’re messy (or vice versa)? Maybe one of you has very strict ideas about what kind of lifestyle is appropriate for an unmarried person, and the other doesn’t. Ask these questions and more when the applicant is walking through the rental property, or when you collect the rental application.
Step 5: Use and sign a legal sublease agreement in your state.
Now that you’re the landlord, you need to abide by all those strict state laws that used to seem wonderful, but now seem complex, daunting and heavily tenant-favored. Make sure you don’t charge than is allowed for the security deposit, make sure the sublease agreement you use is state-specific, make sure you comply with any restrictions on, well, everything ranging from pet fees to application fees to notification requirements to disclosures and much, much more. We have a sublease agreement wizard that will walk you through your state’s laws and generate a state-specific sublet agreement, but be aware that you do need to pay attention to the laws now. Be sure to walk through the property with the sub-tenant and sign a Move-In Walk-Through Checklist about the condition of the property upon their move-in to prevent disputes about who caused what damage, when they move out.
As a final note, it’s worth mentioning that you should advertise on the higher side of what your room or apartment will rent for, to attract a higher-caliber applicant. You can always reduce the rent at the time you sign the sublease agreement, but you can’t raise it. Remember that you have obligations to both the landlord and the sub-tenant, and if you no longer reside in the rental property yourself, usually this dual set of obligations is more trouble than it’s worth once the original lease term has expired. Thirty days before the original lease term is scheduled to expire, you should consider sending the landlord notice that you will not be renewing, and putting your sub-tenant in touch with the landlord directly to discuss whether or not they will continue their relationship without you.