A sublease is a legal agreement between an existing tenant and a new third party, where the existing tenant rents out a portion of their lease contract to the new tenant. The sublease agreement may also be called a sublet. Subleasing may or may not be permitted in the terms of the original lease, and may be subject to additional restrictions by jurisdiction. Even if a sublease is permitted, the original tenant is still liable for the obligations stated in the lease agreement, such as the payment of rent each month. Key points to note about subleasing include:
- A sublease is a transfer of tenancy from an existing tenant to a third party for a specified period.
- The original tenant turns into a sublessor in the new contract, and there is no privity of contract under the sublease between the owner of the property and the sublessee.
- The subtenant pays rent to the tenant, who is responsible for paying the rent to the landlord in turn.
- Subleasing can be established unless the original lease forbids it. However, in most cases, the owner must be notified and must approve any subletting arrangement created by the tenant.
- The sublease means that the subtenant has no official position, and at the end of the lease term, the sub-tenant will have no option to renew their lease since their agreement is with the tenant, not the landlord.
- Poorly written sublease agreements can cause more harm than good, and problems most often arise when the sub-lessee stops paying rent.
- A tenant might not need to sublet if they have a lease for a set term, like one year, and can sublet with or without their landlords permission, unless they prohibit this in the written lease.
- A lease that doesnt allow a tenant to break a lease, and only allows the tenant to sublet is a probable violation of the law.
- Subleasing can help prevent a tenant from breaking their agreement and skipping out on the landlord, and can save time and marketing money for the landlord.
It is important to note that subleasing laws and regulations may vary by jurisdiction, and it is advisable to consult with a legal professional before entering into a sublease agreement.
