- Is subleasing legal?
- Does subleasing affect your credit?
- Are subleases legally binding?
- What is a “Master” lease?
- Should I give the Sublessee a copy of the master lease?
- Can I charge the Sublessee any rent amount?
What is a Sublease Agreement?
A sublease agreement is a binding document formed between the existing tenant (lessee) to a property and a new subtenant (sublessee). The form establishes the rules and expectations that the subtenant is required to follow.
The form is often used when a tenant, who has a considerable length of time left on their lease, wishes to leave the property and live somewhere else for the remainder of the lease. Even after the sublease is signed, the original lease agreement signed with the landlord remains in effect. Furthermore, the landlord will still expect regular rent payments from the original tenant.
What does this mean? If the sublessee stops paying rent for whatever reason, the original tenant will have to come up with the payment on their own.
Overview:
- Used for setting rules and conditions that a new tenant is required to follow.
- Is a form designed for tenants (not to be used by landlords).
- The original tenant is still liable for paying rent, taking good care of the rental, etc.
- Requesting more rent from a sublessee than what the original lease states is often illegal.
How to Sublease
The following is a guide for entering into a sublease as the sublessor (tenant that originally rented the property):
- Determine if Subleasing is Permitted
- Find a Tenant
- Create & Sign the Sublease Agreement
Step 1 – Determine if Subleasing is Permitted
The first step a tenant should take in the subleasing process is to examine the lease agreement that was signed with the landlord. More often than not, there will be an entire section dedicated to subleasing.
If the agreement permits subleasing (or doesn’t reference it):
If it says something along the lines of “subleasing requires landlord approval,” all the tenant has to do is inform the landlord that they will be subleasing and provide them with information on the new sublessee – in the majority of cases, they will receive permission to introduce the new tenant. In the case it doesn’t contain a section regarding subleasing, the tenant will most likely be permitted to sublease after contacting the landlord, as the majority of state’s laws permit subleasing even if it is not included in the lease.
If the agreement does NOT permit subleasing:
On the other hand, if the lease strictly prohibits subleasing, the tenant may be out of luck. However , reaching out to the landlord and explaining the situation can result in them allowing it. Before reaching out to the landlord, understanding how they see subleasing is important:
When a landlord looks for a tenant, they go through significant amounts of screening; rental applications, interviews, background checks, and references are all used to determine if an applicant is worthy of renting a unit. When a tenant wants to introduce their own tenant, how can the landlord know the new tenant will follow all of the property’s rules? In the majority of cases, they can’t. That is why some landlords decide to ban it outright.
However, if a tenant contacts their landlord and states they will 1) follow due-diligence when looking for a sublessee, 2) send the landlord a draft of the sublease (for confirmation that it includes all necessary conditions), and 3) confirm they understand they are still liable for paying the rent and any damage to the property, the landlord may permit subleasing to occur.
Step 2 – Find a Tenant
Assuming the tenant received permission to sublease, they can now begin their search. Because the “wrong” sublessee can cause significant amounts of trouble for a tenant – care and caution should be taken throughout the entire process.
Oftentimes, the easiest sublessees to find are those that the tenant personally knows. So long the tenant trusts them, entering into an agreement with a friend or relative can make for a quick and painless process.
The best methods for finding a suitable subtenant include:
1. Online postings
One of the most common places to look for subtenants is Craigslist. While the site can be promising, it’s undoubtedly a gamble. So long the tenant screens an applicant, however, finding a worthy tenant is doable. An alternative is Sublet.com, which is a site focused mainly geared towards subleasing. It contains filters and other options not found on Craigslist. Another great option is Flip, which gives tenants an additional layer of protection in avoiding poor quality sublessees.
2. College / university boards
For students, this option may very well be the best. Boards can be found in cafeterias, common rooms, dorms, and other popular areas around campus. To do this, all a student has to do is create a flyer with a picture of the rental, the monthly rent, and their contact information. Then they can print it out and stick it on the board. Not only is this process easy, it is displayed towards other students who may be looking for a place to live over the summer.
3. Social media
Sharing posts on Facebook and other similar sites can be a great way of finding tenants. Sublessors can get an overview of prospective renter’s lives, allowing them to get an overall sense of whether they would make a trustworthy tenant. Using social media is not, however, a substitute for standard tenant screening procedures.
Step 3 – Create & Sign the Sublease Agreement
Begin drafting the sublease. For those that want an easy, pain-free leasing process, a sublease can be created with eForms. Alternatively, the free state-specific templates offered above can be used as-is or edited to meet the specific needs of the sublessor.
It is important that the sublessor understands that, although tempting, it is not good practice (and often is illegal) to charge a sublessee more than what the sublessor was originally paying for rent. The terms and conditions included in the sublease agreement should match the original lease signed with the landlord as closely as possible. Once the agreement has been completed, sending a draft to the landlord is highly recommended. They will be able to identify any areas that are too vague, as well as mark any un-needed sections.
Once the form is ready to be signed, sit down with the new renter and go through the contract. The form can also be sent digitally if the sublessor already knows and/or trusts the sublessee. So long they agree to all conditions included in the form, both parties will need to record their signatures into the appropriate fields. Once all signatures on are the form, the agreement will be in full effect and the sublessee can move into the property.
Subleasing FAQ
Is subleasing legal?
Whether it’s legal for a tenant to sublease their rental depends on two (2) factors:
- State laws, and
- The lease signed with the landlord.
Some state laws restrict landlords from denying tenants the right to sublease, whereas other states specify that it is up to the landlord to decide. Once the laws have been checked, the tenant should contact the landlord and inform them of their intent to sublease (even if state laws permit it). This is to limit the chance of future conflict and ensure all parties are on the same page.
Does subleasing affect your credit?
Potentially. While the actual act of subleasing does not affect the credit score of the sublessor, it can be affected if the sublessee misses rent payments. This is because it is ultimately the responsibility of the original tenant to ensure the conditions of the original lease are met. If the rent continues to go unpaid, the debt associated with the missed payments can indeed negatively affect the sublessor’s credit score.
Are subleases legally binding?
Yes. Once the sublessor and sublessee record their signatures onto the sublease, it is indeed legally binding. Things like rent amounts, utility costs, and other monetary conditions can be enforced by a court of law. Additionally, if the rental is uninhabitable, the sublessee is within their rights to end the contract.
What is a “Master” lease?
The “master” lease, also called the “original” lease, is the agreement that the tenant (sublessor) originally signed with the landlord. After a sublease agreement is signed, the master lease remains as the legally binding contract that the original tenant is required to abide-by (and thus the sublessee). Conditions included in the sublease should reflect the master lease where applicable. If the master lease expires, the sublease agreement automatically expires, as a sublease cannot exist without a standard lease in effect.
Should I give the Sublessee a copy of the master lease?
Yes, it is best practice to provide the sublessee with a copy of the master/original lease. Because a sublease agreement does not cover every topic a standard lease does, the sublessee should have access to the original lease to ensure they are up-to-date on all requirements and obligations.
Can I charge the Sublessee any rent amount?
Possibly. While it is recommended that sublessors charge the same amount they are paying for rent, there are certain situations that can warrant charging a higher rate, such as a furnished property, market rates have increased, or certain utilities will be paid for by the sublessor. However, sublessors are not permitted to make a profit on a subleased rental.
If the sublessor does charge more it should be done with the landlord’s guidance, and the increase should be passed down from the landlord onto the sublessor. Meaning, the landlord would add 10% to the rent amount, which the sublessor would then request from the sublessee. States and cities/towns all have their own rules regarding the rent that can be charged for subleasing which should be consulted prior to altering the rent amount.
For sublessors looking to play it safe, they are recommended to charge sublessees the same amount they were paying for rent.
Subleasing Laws by State
The following states have no statutes / official state resources pertaining to subleasing ; in other words, the master lease should be consulted and the landlord should be contacted for permission:
- AL, AZ*, CT, FL, IA, IL, IN, MA, MD, MS, NC, ND, NE, NH, NM, OH, OK, PA, RI, TN, UT, VT, WA, WI, WV, & WY.
*Arizona law has sublease statutes relating to Mobile Homes only – not standard residential spaces such as apartments, homes, rooms, etc.
Note: Bar association articles and non-official pamphlets and guides have not been included below. While some states have said resources, only official state statutes, attorney general resources, and official landlord-tenant guides have been referenced below.
Alaska
Tenants need written permission from their landlord prior to subleasing. If the lease states they cannot sublease, there is nothing they can do (short of begging the landlord for permission). If the lease does, in fact, permit tenants to sublease so long they receive approval, they have to find one (1) or more potential sublessee(s) and have them provide the landlord with a written offer that contains:
- Their name, age, and current address;
- Their marital status;
- Their current occupation and the name and address of their employer;
- The total number of additional occupants the sublessee would have residing in the rental (if any);
- At least two (2) credit references or responsible persons who can confirm the financial responsibility of the prospective sublessee; and
- The name(s) and address(es) of the landlord(s) that the prospective sublessee had during the past three (3) years.
Landlords can then deny applicants for seven (7) reasons, which include 1) insufficient credit/financial responsibility, 2) too many occupants, 3) occupants are too young (under 18), 4) the applicants are not willing to conform to the requirements of the original lease, 5) they have pets, 6) they would conduct business activities in the rental, or 7) they had a poor review from a previous landlord (including a signed note from the previous landlord stating their abuses).
Arkansas
So long permission is received from the landlord, tenants can sublease. The landlord is responsible for determining the rent charged to the sublessee.
California
Subleasing is allowed if 1) the landlord permits it or 2) it is not specifically referenced in the lease. Landlords have the ability to deny tenants the right to sublet (called “transfer” in the statutes) in the written lease agreement. In the event the tenant sublets the rental with the landlord’s approval, but the written lease states that subleasing isn’t allowed, the landlord could legally take a percentage (or all of) the rent the sublessee pays.
Colorado
Tenants can sublet so long the landlord permits it in the signed lease or it isn’t specifically referenced. Landlords have the right to deny a tenant’s right to sublet in the rental contract. If it isn’t included in the lease, landlords cannot unreasonably prevent a tenant from subleasing their rental.
Delaware
If the lease does not contain information on subleasing or the landlord permits it in the rental agreement, tenants can sublease. Although landlords can restrict a tenant’s right to sublease, they cannot withhold it unreasonably. The burden of proof is on the landlord for proving that subleasing should not be permitted in the unit.
Georgia
Whether or not tenants can lease is dictated by the rental contract. Landlords will typically require tenants to receive their approval prior to subletting.
Hawaii
Tenants can sublease without the landlord’s direct consent so long the signed lease doesn’t require the landlord’s approval. Otherwise, the landlord should be consulted prior to subletting.
Idaho
Tenants can sublease their rental so long the signed lease agreement does not strictly prohibit it. Receiving permission from the landlord is recommended, regardless of what is stated in the lease.
Kansas
Tenants that are leasing on a term for less than two (2) years (or on a month-to-month or week-to-week basis) have to obtain written permission from their landlord prior to subleasing. It can be assumed that tenants bound to a lease for two (2) years or longer can indeed sublet without permission from the landlord (unless specified in the lease).
Kentucky
Prior to subleasing, tenants have to get the written approval from their landlord. If permission is not received, the landlord can lawfully evict the tenant(s) after providing them a ten (10) day notice to quit.
Louisiana
Tenants are permitted to sublease in the state unless it is clearly prohibited in the signed lease.
Maine
In Maine, landlords cannot unreasonably deny a tenant the right to sublet. However, prior to signing a sublease, the landlord should be informed of the tenant’s intention to sublet, and the master lease should be consulted.
Michigan
Per the landlord-tenant guide created by Michigan’s Legislature, if the lease does not mention subletting (either allowing or restricting), tenants can legally sublet their rental without the permission of the landlord. However, it’s worth mentioning that in the majority of cases, tenants should be expected to acquire approval from their landlords first.
Minnesota
Per the Minnesota Attorney General, tenants can sublease their room or unit so long there is nothing in the lease that outright prohibits it. If the lease states the tenant(s) need the permission of the landlord prior to subletting, they should get the landlord’s approval in writing, to ensure they are legally protected.
Missouri
Per the Attorney General’s guide, tenants in Missouri have to receive approval from their landlord prior to subleasing. In the event tenants sublease without clear approval, the state permits landlords to charge tenants double the rent as a consequence.
Montana
Montana law requires tenants to receive written consent from the landlord (or the landlord’s agent) in order to sublease a property.
Nevada
In Nevada, the lease signed with the landlord determines whether subleasing can occur or not. Because NV law states that a tenant is guilty of an unlawful detainer (and subject to potential eviction) if they sublease without permission, acquiring approval from the landlord is highly recommended.
New Jersey
Per the state-official bulletin, tenants can introduce a subtenant into their property so long the lease doesn’t prohibit it. Although not stated, it is still recommended that the tenant(s) receive permission from their landlord prior to subletting.
New York
All tenants in NY need clear written consent from the owner/landlord to sublet unless the lease agreement permits tenants to engage in subletting without permission. If it can be proved the landlord is unreasonably preventing subleasing to occur, the landlord has to give the tenant the option to exit the lease with thirty (30) days of notice.
Prior to subleasing, tenants need to inform the landlord of their intent to sublease by mailing a notice of intent (by certified mail) containing the following:
- The term of the sublease;
- The name of the sublessee;
- The sublessee’s business & home addresses;
- The address the tenant will be staying at for the term of the sublease;
- The written consent of the co-tenant/guarantor of the lease; and
- A copy of the sublease (with an attached copy of the original lease).
Oregon
For subleases longer than three (3) days (and with the landlord’s approval to sublet), Oregon law requires the tenant (sublessor), sublessee, and the owner/landlord to form a written agreement specifying the rights and obligations of all three parties. The agreement must contain provisions that state the sublessee will pay rent directly to the landlord (not the sublessor), how other fees (utilities, for example) will be billed, and a section stating the sublessee will have the same rights as the sublessor under the agreement.
South Carolina
Per state law, subleases are considered “null” if the landlord did not give written consent for it to occur.
South Dakota
Tenants need the approval of their landlord in order to legally sublease their rented unit/apartment/room.
Texas
Texas law requires tenants to receive permission from the landlord or property manager prior to re-renting a space.
Virginia
Tenants can sublease so long the rental agreement (master lease) doesn’t restrict it. If the lease contains a section stating the landlord has the power to disapprove/approve sublessees, the landlord needs to provide an answer within ten (10) business days after receiving a potential sublessee’s written rental application. If the landlord doesn’t provide an answer within ten (10) business days, their non-answer can be considered as approval for the applicant sublessee.
How to Write
Before heading to the first step, save the agreement in either Adobe PDF (.pdf), MS Word (.docx), or Rich Text (.rtf).
Step 1 – Party Names
Start by writing the name of the sublessor (original tenant) followed by the sublessee (new tenant).
Step 2 – Property Address
Enter the full address of where the rental is located.
Step 3 – Sublease Term
Enter the start and end dates for the lease. This can be any length of time so long it isn’t longer than the term included in the original (master) lease.
Step 4 – Rent
Write the amount the sublessee will be required to pay per month (not including utilities).
Step 5 – Security Deposit
Enter the amount the sublessee has to pay for a security deposit (if any), followed by the number of days the sublessor has to return the deposit after the lease is terminated.
Step 6 – Total Occupants
Write the number of roommates the sublessee will have. If they are renting the entire premises on their own, write the number “1”. If the sublessee will be sharing a room in the rental, check the first box and write the name of the other tenant(s) sharing the room. If the sublessee isn’t sharing a bedroom, “N/A” can be written in the name field.
Step 7 – Overnight Guests
If the sublessee needs permission from the sublessor in order to have an overnight guest, check the first box. If not, check the second box.
Step 8 – Utility / Telephone Charges
Enter the percentage (%) of the utility bills that the Sublessee is required to pay. If there are no roommates in the rental (they are living alone), the percentage should be 100%. If there is phone / internet bills, enter the percentage the sublessee is required to pay. If there are no phone or internet bills, “N/A” can be written in the space (also applies for utility bills).
Step 9 – Household Chores
List how the household chores will be split among the sublessee and roommate(s). If the sublessee will be living alone in the rental, list their responsibilities or leave the field blank.
Step 10 – Noise Level
If the sublessor wishes to enact quiet hours for the rental, they can enter a start and end time in the two (2) spaces provided. Note: If the sublessee is renting the dwelling alone, quiet hours should not be set (unless they are required by the master lease).
Step 11 – Smoking
If smoking is permitted in the rental, check the first box. If not, check the second box.
Step 12 – Alcohol
If the sublessee can drink alcohol in the rental, check the first box. If they cannot, check the second box.
Step 13 – Parking Space
If the sublessee has access to a parking space, check the first box and describe where the space is located in the provided field. If the sublessee won’t have a dedicated parking space, check the second box.
Step 14 – Master Lease
In the area provided, write the name of the landlord that the sublessor originally signed a lease with.
Step 15 – Termination of Master Lease
Prior to the termination of the master lease (agreement signed between the landlord and sublessor), enter the number of days’ notice the sublessor has to provide the sublessee prior to the lease’s termination.
Step 16 – Condition of the Rental
Prior to signing the sublease, the sublessee and sublessor should do a walk-through of the rental. Any found damage, defects, or broken appliances/systems should be listed.
Step 17 – State of Governing Law
Write the name of the state in which the rental is located (and thus governed by the state’s lease laws).
Step 18 – Disclosures / Provisions
Enter any state-mandated provisions on the lines provided or any rules (not previously covered) that the sublessee has for the sublessor. A roommate agreement should be used in conjunction with a sublease agreement if the sublessee will be sharing a rental with one (1) or more people.
Step 19 – Signatures
Both the sublessor and sublessee will need to:
- Sign their names,
- Print their names, and
- Write the date in which they’re signing.
Once the signatures are recorded, the agreement will go into effect.
