Owning rental property often means dedicating significant effort to identify the ideal tenants. At times, tenants may look to economize by renting out their space to another person, permission notwithstanding. It frequently happens when tenants with long-term leases need to be away from their homes for considerable periods. Instead of opting out of their lease, tenants might perceive subletting as the better route. This piece intends to guide you through this predicament and help identify a solution that satisfies everyone.
Subletting is when a tenant lets a portion of their home, for instance, a bedroom, to someone else while they still occupy it. Even though this can be a practical way for tenants to secure additional funds, it tends to cause unease for landlords. Being a property owner necessitates a careful assessment of the benefits and drawbacks of authorizing subletting by tenants. Now, let’s closely inspect these influencing factors.
Who is Responsible?
Subletting often unfolds through one of two scenarios. In the first scenario, a legal sublet, the landlord authorizes the tenant to lease out either the entire property or a portion of it to another tenant. The second is an illegal sublet, characterized by the tenant renting out the property to another individual without the permission of the landlord.
Pertaining to subletting, it’s essential to recognize that the primary tenant is legally bound to honor their lease agreement and secure the payment of the entire rent. Consequently, even when subletting is permitted, the ultimate responsibility rests with the original tenant. Even under the best circumstances, subletting requires placing significant trust in the original tenant to guarantee the subtenant adheres to all terms of the lease agreement.
Reasons Not to Allow Subletting
The decision to permit subletting lies entirely in your hands as the landlord or property manager. It’s important to remember, though, that homeowners’ associations or other regulations might impose restrictions on subletting in certain cases. When agreements specifically ban subletting, this scenario might represent the singular reason to block your tenant from subleasing your property.
A further motive for denying subletting could be the difficulty in collecting rent from a subtenant who stops paying when your primary tenant is away. As a result, you’d be compelled to pursue your original tenant for the rent, a task that can be laborious and time-demanding. Should the sublet prove to be illegal, accepting rent from a subtenant is crucially something to avoid. Receiving rent from a subtenant, including in illegal situations, could inadvertently grant them rights to the property, necessitating eviction to resolve.
Reasons to Allow Subletting
Many landlords sanction subletting to keep their properties filled. This holds true especially when a tenant is expected to be away for a significant amount of time. Keeping a healthy relationship with your tenant is vital, and enabling them to arrange what best fits their needs is an effective approach. Allowing subletting by your tenant also aids in circumventing vacancies and related turnover costs, with the stipulation that rent is paid in a timely manner monthly.
Subletting Agreements
It’s highly recommended to establish a detailed subletting agreement that specifies your expectations and the duties of your tenant. Independent of your approval of subletting, it’s critical to embed a clause in your lease that unambiguously states the permissions and their timing. Open communication can be the key to avoiding confusion and ensuring a content and stress-less rental agreement for both the tenant and the landlord.
If you’re inclined to permit subletting, ensuring the necessary protections for you and your property is indispensable. One of your initial actions should be to diligently screen the subletting tenant, in the same manner as you would assess any potential renter. After locating a compatible tenant, establishing unequivocal expectations and guidelines for the subletting agreement is imperative. By formulating and ratifying a sublease agreement, you can enumerate all the stipulations and provisions of the subletting arrangement. Instituting a sublease contract can avert forthcoming issues or disagreements that might emerge.
Have any doubts about authorizing your tenant to sublease your rental premises? No worries, Real Property Management Steel City has got you covered! Contact us online or call 719-948-8155 to talk to a rental property expert today. Our team of pros is here to help you make the best decision for your property in Pueblo or nearby.
Originally Published on April 1, 2022
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