Trending Topics

Most Popular Searches

4 Things to Know About Subletting

August 12, 2015 | By

Life, as it goes, can come at you fast. If you’re renting an apartment and you suddenly and unexpectedly need to move to a different city or country for a new job well before your lease expires, getting out of that lease can be complicated.

You can keep the apartment and move into a new one, thereby paying two rents in all. You can negotiate with your landlord to break your lease (sometimes at a price). Then there is subleasing, where you agree to rent out your apartment to a person for a period of time—be it for a few months or for the duration of the lease—in exchange for rent.

But subleasing your rental home can be a legally precarious situation. Your landlord may not allow it. If subletting is permitted in your lease, your subtenant could skimp out on paying rent, leaving you with the financial burden of having to pay it for him.

Here are a few things to keep in mind when you’re considering subleasing your apartment.

1. Read Your Lease

When you first sign your lease, be sure to read the language carefully to see if you’re allowed to sublet the apartment. Many states across the country have their own rules about subleasing apartments and homes. States such as Delaware allow tenants to sublet their apartments unless the lease agreement prohibits them from doing so.

If your landlord does not permit subletting your apartment and you still need to get out of your lease, there may be an early termination clause in that lease. That can cost money, however.

“An early termination provision often requires that you pay three months’ rent to get out of your lease,” says Matthew Chase, an attorney based in St. Louis.

Chase advises that people negotiate with their landlords for an early termination agreement at a lower rate. People can also ask to have a clear-cut sublease provision in the lease before you sign it.

“You can always tell the landlord that you’re willing to sign the lease, but you would prefer doing a one-month termination fee instead of a three-month fee,” he adds.

2. Research Your Subtenant

Having a subtenant can either be rewarding or risky. A subtenant could damage the apartment or fail to pay the rent.

The downside for tenants is that they maintain responsibility for the “misdeeds” of subtenants, says Chase.

To mitigate this risk, experts advise asking potential subtenants for a copy of their credit report along with references from mutual friends, old roommates, or even previous landlords.

3. Sign a Sublease Agreement

Once you’ve found a responsible subtenant, consider having them sign a clear-cut sublease agreement to spell out the terms of your arrangement.

For instance, the sublease can define:

  • The date of payment and the amount owed
  • Whether the subtenant will pay you the rent (and you then pay that rent to the landlord) or if he will pay the rent directly to the landlord
  • The value of the security deposit the subtenant must pay
  • Whether the cost of utilities should be shouldered by the subtenant or the sublessor
  • Damages
  • Any additional provisions

4. Require a Security Deposit

In the unfortunate event that a subtenant causes substantial damage to your apartment or fails to pay rent, a security deposit—worth roughly two months’ rent—can prove useful, says Chase.

If the stay in your apartment goes without a hitch, the subtenant gets the security deposit back and you either return to your old apartment good as new or finally get out of your lease after it ends—a happy ending for you, your landlord, and your subtenant.

This article does not reflect the views of Fannie Mae, and Fannie Mae does not endorse the positions or opinions noted herein.

comments

COMMENTING POLICY

 

We appreciate and encourage lively discussions on our websites’ content. While we value openness and diverse points of view, all comments should be appropriate for people of all ages and backgrounds. We do not tolerate and will remove any comment that does not meet standards of decency and respect, including, but not limited to, posts that:

  • are indecent, hateful, obscene, defamatory, vulgar, threatening, libelous, profane, harassing, abusive, or otherwise inappropriate
  • contain terms that are offensive to any group based on gender, race, ethnicity, nationality, religion, or sexual orientation
  • promote or endorse a product, service, or vendor
  • are excessively repetitive, constitute “SPAM” or solicitation, or otherwise prevent a constructive dialogue for others
  • are factually erroneous or misleading
  • threaten the privacy rights of another person
  • infringe on intellectual property and proprietary rights of another, or the publication of which would violate the same
  • violate any laws or regulations

We reserve complete discretion to block or remove comments, or disable access privilege to users who do not comply with this policy. The fact that a comment is left on our website does not indicate Fannie Mae’s endorsement or support for the content of the comment.

Fannie Mae does not commit to reviewing all information and materials submitted by users of the website for consideration or publication by Fannie Mae (“User Generated Contents”). Personal information contained in User Generated Contents is subject to Fannie Mae’s Privacy Statement available here. Fannie Mae shall have otherwise no liability or obligation with respect to User Generated Contents and may freely copy, adapt, distribute, publish, or otherwise use User Generated Contents without any duty to account.

A Window Into Housing In America

Subscribe to our newsletter for each week's top stories. Enter your email address below to stay in the know.

Accessibility