Subletting Legal Obligations

Spencer AndersonOct 20, 20202 min read

The coronavirus (COVID-19) pandemic has rattled the commercial real estate industry. With work-from-home options and other changes, many business owners may be looking to sublet their properties. Here are a few things to consider during the subletting process.

What are my legal obligations when subletting?

The first thing to remember about a sublet is that you are still responsible for the lease. If a tenant leaves the property damaged, you are held responsible. If the subletter quits paying rent, you are the one the Landlord comes after based on the lease terms. In some instances, there is the ability to assign a lease, which would release you of further responsibility but limited when applied. In most cases, a subletter is the option employed, which makes you responsible to both the Landlord for the terms of the original lease and the subletter for certain agreement requirements.

Landlord can refuse

You cannot legally sublet if either your lease forbids this type of activity or your Landlord refuses. Moving forward on a sublet that the Landlord has not approved can cause further legal ramifications down the road. Financial compensation for the term of the lease, damages caused by the sublet, and even additional fees to you for going against the intent of the lease. Know your rights, and do your research before undertaking a sublet to avoid unnecessary expense and time down the road.

Provide notice

Ensure that you provide notice to the Landlord of the subletter included dates, etc. One legal note on this is that it should be written in the same language of the original lease and forwarded to the Landlord of record. For your protection, ensuring that a return receipt of the mailing should be obtained just if this becomes a legal matter of discord down the road.

Security deposit and agreements

Never allow a sublease with a handshake and without a deposit. This is a bad rule of thumb as this leaves you holding all of the responsibility if something does occur. Just as a lease protects both you and the Landlord, a sublet agreement of subletter and your responsibilities should be laid out. Like the one provided your Landlord, the security deposit helps cover and use and wear and tear items above the apartment's normal expectations. Should you have a subletter that refuses to pay and causes damage to the place, the security deposit and agreement can help you rectify on behalf of the Landlord.

Subletting rules can differ, but legally if undertaking, you should follow some basics to protect yourself. Always inform the Landlord in writing of the particulars, following the letter of your original lease agreement if subletting is a clause in that document. Get a written agreement drawn up between yourself and the subletter, along with the collection of a security deposit. You are legally responsible for the property until the end of the original lease, but doing these few critical things can legally help protect you when unforeseen occurrences arise with your subletter.

WRITTEN BY

Spencer Anderson