Whether you’re a landlord, tenant, or simply someone looking for a place to rent, it’s likely that you’ve come across the term subletting, or subleasing. While there are many circumstances in which subletting is a great option, there are just as many times it can turn into a nightmare. It’s good to explore the benefits, as well as the potential risks. Below, we take a look at the pros and cons of subletting, from the perspective of everyone involved.
The Tenant’s Perspective
From college students looking to find someone to cover the rent while on summer break, to the young professional who has landed a new job in a new town, there are many instances in which the tenant may need to move out before their lease is up.
- Avoid penalties; often when you break your lease early, you’ll need to pay a penalty or fee. This covers the costs the landlord is likely to accrue, such as missed rent, utilities, and advertising for a new tenant.
- Avoid bad renter’s reputation; in addition to paying penalties for breaking your lease, your record as a renter can be damaged, making it harder for you to find a place to rent in the future.
- You can return to your apartment; if you only need to leave for a short amount of time, you can find someone to sublet only for the time you’re away. This is also great for those bitten by the travel bug.
- Your apartment remains occupied; an occupied apartment is less likely to be burgled, or suffer damage from extended maintenance problems.
- You don’t have to pay rent on an empty apartment; when subletting, someone else will pay all, or a portion of your monthly rent, saving you money each month.
- It can be difficult to find a good tenant; you will normally be responsible for finding a replacement, and this can be a lengthy process. It’s hard to find a good tenant, who you can rely on to respect the property and the rules, as well as pay rent on time.
- A bad tenant can ruin your reputation; if your replacement causes problems, they’re typically your responsibility. This can lead to you being evicted, which can make it difficult to rent in the future.
- Your replacement might need to break their lease; just as circumstances led you to move out, the same could happen to your replacement. In this case, you’ll need to find another replacement, which can be very difficult if you’re out of town.
- Your stuff can be damaged or stolen; anything you leave behind can be at risk from being stolen or damaged by your replacement, or their guests.
- You’ll need to move out completely; even if you plan to sublet for the short-term, it’s still wise to move all your possessions out. This can be a lengthy and expensive process.
- It takes time; subletting your apartment can take a long time. If you were hoping for a quick solution, subletting might not be the best idea, unless you have a good replacement already lined up (i.e. a family member or close friend).
The Landlord’s Perspective
For a landlord, subletting can be a nerve-wracking experience. It’s important to ensure that your tenants’ agreement covers subletting so that you know what to expect. At the least, there should be a clause that your tenant must have your permission to sublet.
- Rent continues to be paid; if your tenant breaks their lease, it could be months before you find a replacement, months without rent.
- The tenant has to find a replacement; it’s not your responsibility to find a new tenant, saving you time and money.
- You’re legally protected by the lease agreement; a well-drawn up lease agreement can keep you safe from the issues associated with subletting. Be sure to detail the responsibility of each party, ensuring that the rent is paid to you each month no matter what.
- The new tenant can be a nightmare; subletting is risky, especially for the short-term. It’s important to reserve the right to screen any potential tenant, otherwise, your current tenant could, and probably will, accept anyone without carrying out thorough checks. Short-term tenants are also more likely to cause damage, receive noise complaints, and not pay the rent on time.
- Your tenant might try to make a profit behind your back; a cunning tenant might add a surcharge to the rent you charge them, in order to earn a little extra income.
- You may have to evict your tenant regardless; if your tenant finds a nightmare replacement who refuses to pay, or breaks the terms of the contract, it’s likely that you’ll have to evict them, and possibly the original tenant as well.
The Subletter’s Perspective
For the subletter, it’s mostly good news. However, there are some risks to be aware of.
- A sublease can be a great option for shorter-term stays; most leases are for a year, so if you’re just looking for a place to stay over the summer, a sublet can be perfect, especially in college towns.
- Good way to get a feel for a place without committing long-term; if you want to stay in an area longer, but would prefer to test the waters first, subletting can be a good option. You’re not obliged to stay once the original lease is up, though it is often an option.
- You can often renew the lease in your name; if you liked the apartment and the landlord is happy with you, you can normally renew the lease in your name for the longer term.
- It can be risky to trust the original tenant; if you pay your rent to the original tenant, but they don’t pay the landlord, there’s a chance that they, and in turn, you will be evicted.
- The tenant might charge you extra; often, a tenant will try to make a little extra income from subletting, and it’s often you that has to pay the price.