Picture this: You signed a lease for your apartment for one year. You’re not planning to go anywhere, and a year-long lease gives you a nice discount from your apartment management company each month. It’s a win/win, right? Everything is working beautifully until suddenly your mother gets sick and you need to move to another state to care for her. You’ll have to pay steep penalties if you break your lease. Your friend offers to sublease your apartment, but should you do it?
What is a sublease?
A sublease is a way for the tenant of a property to lease out to another person. There are different sublease arrangements, but you usually remain responsible for the rent as the person on the lease. Someone else, the subleaser, then resides in the building and pays the rent either to you or directly to the property owner. They may sublease from you for the remainder of your original lease agreement or for a shorter term. In some situations, you may sublease just a portion of your lease agreement. For example, a sublease agreement could allow someone to rent a room in a two-bedroom apartment.
How does a sublease work?
Typically in a sublease arrangement, a sublease contract would be signed to indicate who is responsible for what payment and when. The contract also outlines the rights of all the parties involved and the rental amount and due date.
The pros of a sublease
In the scenario outlined above, subleasing your apartment could be an attractive proposition. Someone else will move into your apartment, and you’ll ideally be off the hook for the rent and avoid the penalty for breaking your lease. This type of arrangement could help you move without coughing up the cash for the lease penalty or having to worry about making two rent payments until your lease is up.
The cons of a sublease
As with anything, there can be a downside to subleasing your apartment. If you don’t already know someone who wants to sublease from you, you’ll have the difficult task of advertising your place and interviewing potential candidates. It may be hard to find someone who is reliable, and if your sublessee flakes out on you, you’ll still be responsible for the rent. What’s worse, if you’ve already moved away, it could be even more difficult to find a replacement. You may be left between a rock and a hard place.
How to decide if a sublease is right for you?
Check your lease contract
The most important thing to consider before subleasing is the terms of your original lease. Many contracts do not allow subleasing at all. There’s a good reason for that – they’ve already vetted you and done a background check to make sure you’re reliable, have an income large enough to pay rent, and can meet all their rent requirements. If someone else takes your place, that person may not have the background check that the property owner requires.
Check the laws
Laws about subleasing vary from state to state. If subleasing is allowed by the property owner, double check to be sure what you are still responsible for if you sublease. You will probably still be responsible for the rent payment, and possibly insuring the property as well. It might be a bit of a headache, but in this type of situation, taking a little bit of extra care could help you avoid issues down the road.
Do the math
Sometimes paying the penalty to break the lease may be less than you think. Subleasing could be a headache, and you may find it is cheaper in the long run to break the lease and be done with it. If you explain the situation to the property owner, they may be willing to work with you to help find an arrangement that would be beneficial to everyone. Double check the agreement you signed, reading every word to determine exactly what the penalty will be.
Subleasing can be an excellent arrangement allowing you to save money and have some flexibility, or it could be a process fraught with frustration. Before jumping into the arrangement, take the time to understand all aspects of the situation thoroughly. If you decide to sublease, make sure you have a solid contract and a security deposit from your sublessee. Be sure to include all payments and the tenant’s responsibilities in the contract, including the charges for bills such as the internet and utilities.