Rental issues are vital because dealing with property, whether it’s yours or your lessor’s, is pretty complicated in terms of legislation. If you possess some real estate and wish to rent it, it’s hard to find trustworthy tenants who won’t cause any serious damage to the premises. But what is even harder is finding reliable occupants for a subleased property because you will hold responsibility for the condition of the premises, though you won’t be the one living there and controlling the situation fully.

What Is a Sublease Agreement?

A sublease agreement is an official document that is executed to prove that the original tenant leases the premises to a new occupant. The landlord is not normally involved in the agreement, but they have to be informed about such a contract to issue permission.

When You May Need a Sublease Agreement

There are multiple cases. Probably one of the most common is when the original tenant’s contract is still effective (and will remain in effect for a lengthy period in the future). Still, due to various reasons, their renting plans have changed. In this situation, a sublessor may decide to sublet the property, move out, receive payment for the leased space, and provide monetary funds for the premises to the landlord.

Another case may be when you rent the whole apartment and wish to sublet part of it. This is a brilliant decision to reduce the rental cost, yet you should be cautious—the new occupants will be the ones who share your space, and you need to make sure everyone will feel comfortable.

Another one is commercial subletting, which is a way of making money. If this is not against the terms and conditions of their contract, the sublessor can improve the real estate and sublet it for a greater amount of money to another tenant. However, be very careful—several states prohibit the sublessor from charging more money for the rent than described in the original contract.

Pros and Cons of Using a Sublease Agreement

Subleasing might be beneficial for both the renter and the subtenant.

If you are a sublessee, consider the following advantages:

  • Agreeing upon subleasing is better in terms of saving money because, typically, the sublessor (original tenant) offers a lower price.
  • Subleasing allows you to move in faster, rent the premises for a shorter period of time, and terminate the contract easily.
  • The original tenant may have already improved the conditions of the premises while leaving there, so you won’t probably need to make renovations.

There are certain downsides for the sublessee as well:

  • You can only sublease the property under the same conditions that the original tenant has signed for.
  • It is not allowed to extend the durability of the contract beyond the number of months agreed between the sublessor and the landlord, which means that you may end up with no property after the original tenant’s agreement has ended.
  • If the sublessor has breached the original contract (for instance, has not paid rent on time for several months), you might be asked to vacate the premises.

The sublessor’s benefits are the following:

  • If you have to move out of the premises before the end of your contract, you usually have to pay penalties. Subletting the property will help you avoid that.
  • If you have moved away for several months or so, leaving the apartment with no one living there might not be very safe. Subletting might prevent burglaries or house maintenance issues.
  • You will be required to pay rent even though you’ve moved away for some time. If you sublet, you won’t waste money on the premises you are not currently occupying.

The cons the sublessor has to consider are:

  • Finding a trustworthy subtenant is very hard. You need to make sure that the new occupant will pay on time and cause no damage to the premises because you are still accountable for keeping it in good condition.
  • If you are subletting the other room of the apartment where you reside, your stuff may be damaged or stolen.

The landlord should be aware of the following pros:

  • In any case, you are protected by the original contract you signed together with the original tenant.
  • You won’t need to find other occupants in case your tenants have decided to change place.
  • You won’t lose money while searching for other potential occupants to rent your premises.

Several problems might occur for the landlord:

  • The tenant can try to higher up the rental price behind your back.
  • The new tenant, whom you are normally not supposed to meet or approve, might turn out to be troublesome.
  • In case the subtenant spoils your premises, there might be a possibility of eviction of both the original tenant and the sublessee, which means you need to find new occupants to live in the place.

What Are the Main Components of a Sublease Agreement

A standard Sublease Agreement consists of four pages and looks pretty much the same as a typical rental agreement. The first page contains information about the rental amount and security deposit; the second one describes whether the tenant is allowed to smoke, occupy the parking space, and have overnight guests. The third one has additional disclosures and provisions, and the final one is meant to be signed.

The sublessor and sublessee append their signatures, print names, and date the paper without the landlord’s presence.

How a Sublease Agreement Works

First off, talk to the landlord and make sure they approve subletting. Otherwise, subletting will be illegal. You should also carefully check the applicable law in your particular state before subletting. Describe the premises in detail, indicate the address, and include the utilities left there for use. Outline the sublease term and define the penalty your subtenant will have to pay in case this condition is breached.

Disclose information from the original contract. In this case, the subtenant will know what can be done on the premises and keep it safe.