Subletting, either on a short or long-term basis, can benefit everyone involved. Landlords can be sure the rent will be paid, tenants don’t have to worry about paying for an apartment they’re not using, and subtenants can find a place to stay. But while there are clear advantages, there are also some risks involved.
With that in mind, let’s look at what landlords, tenants and subletters should be aware of before signing.
Risks for the Landlord
As a landlord, it’s worth stipulating in the original lease agreement that subletting is only allowed with your permission. Taking this precaution gives you more power should a tenant decide to sublet without your say-so. However, if your tenant does ask you to allow them to sublet, here are three risks to consider first:
- An unsuitable subtenant: In many cases, it’s the tenant’s responsibility to find a subtenant. Your tenant may just want to find someone as soon as possible, and there’s a chance you might end up with a nightmare subtenant. It’s well worth reserving the right to screen any potential subtenants to avoid problems.
- You may have to evict the subtenant: If the subtenant breaks the terms of the contract, refuses to pay or causes a disturbance, there’s a good chance you’ll have to start the lengthy, complex process of evicting them.
- Your tenant might try profiting behind your back: In some cases, the original tenant may add a surcharge to the rent, earning a little extra cash in the process.
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Risks for the Tenant
As a tenant, there are several reasons you might need to terminate your lease early. For example, you may find a dream job in another city or have to spend time with a sick family member. Subletting allows you to find a replacement to pay the rent and avoid expensive penalties for breaking your lease agreement. But, there are risks involved:
- Your subtenant can destroy your reputation: If the tenant you find doesn’t respect the rules or causes damage to the property, they may be evicted. In the worst case, you might get evicted, too, making it difficult to rent in the future. So be sure to be selective when finding a replacement.
- Your subletter doesn’t pay: Normally, the subletter pays you, then you pay the landlord. However, if your subtenant doesn’t pay up, you might find yourself out of pocket. Alternatively, they may need to break their lease for the same reason you had to (moving for work, etc.). This can be especially problematic if you’ve relocated and have your own rent to pay.
- Your belongings can be damaged or stolen: If you leave any belongings or appliances behind, they may be damaged or even stolen.
Risks for the Subletter
Subletting can be a fantastic solution if you only need a place to stay short term. Plus, in many cases, if the original tenant has moved out permanently when their lease is up, you’ll get dibs on the apartment. But there are risks for you as well:
- You have to trust the original tenant: If you pay them but they don’t pay the landlord, you may find yourself being evicted regardless.
- The original tenant might overcharge you: If the tenant wants to make a little extra money on the side, they may add a surcharge, meaning you’ll be paying more than you should.
- The sublet might be illegal: If the original tenant didn’t obtain permission from the landlord, the sublet is almost certainly illegal. In this case, you have no rights and can end up out of pocket and without a home.
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