How Landlords Can Manage Tenants Who Want to Sublet

Being a landlord inherently comes with its own stressors. From finding the right tenants to the multitude of things that can go wrong in a unit, it feels as though rules can save you most headaches. But what if your tenants want to sublet their unit? Off the top of your head, you might say no because it can be a lengthy process that might go awry later. But there are ways to mitigate that stress without appearing too restrictive to your tenants. Below is a list to help you talk to your tenants about subletting that covers the major points on safety, liability, and screening, ensuring their proposed subtenant meets the same requirements they did.

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This list is divided into three sections: Communicating with your Tenant(s), Drafting the Lease, and Finalizing the Agreement.

Communicating with your Tenant(s)

When your tenant proposes a sublet, hold a formal meeting to review all policies and guidelines to ensure all parties are on the same page. In-person is the best way to have this meeting as you can take meeting notes for yourself and them. When discussing subletting, be sure to:

• Be Calm and Non-Confrontational: While it’s reasonable to have concerns about subletting and to want more information about who your tenant is proposing to sublet their unit to, you should be calm and outline your concerns after your tenant has provided all their information.
• Frame it Around Property Safety: While a tenant is entitled to sublet their unit, they should know that whoever the proposed subletters are must pass the same screening process they passed when they first moved in. To make it easier, frame this as needing to know who is in the building to ensure everyone’s safety.
• Emphasize Liability: While the original tenant will not be living in the unit for the time being, reiterate with them that they are still responsible for the rent and any damages caused by their subtenant.
• Suggest Alternatives: If a tenant is open to more options for moving out, offer solutions like a lease assignment or a formal lease break, which gives them an out without having to find a subtenant and gives you a straightforward process to do a tenant turnover process with a new tenant.

Drafting the Lease

Once your tenant(s) have provided you with their proposed subtenant(s) information, you can move forward with drafting the lease. To ensure a smooth process, follow these steps:

1. Request Written Notice: While having an in-person meeting can eliminate any confusion, always have written documentation on hand between you, your tenant(s), and future subtenant(s).
2. Provide a Thorough Background Check: The new subtenant(s) should undergo the same process your original tenants went through to ensure that they are qualified to live in your unit.
3. Making the Lease: While this lease should follow the same rules and guidelines as the original lease, there are a few variances that you want to consider, such as:
   • All Parties and Property: In addition to writing down the full names of the tenants, subtenants, and yourself as the landlord, provide a detailed description of the subleased space if there are restrictions, such as specific rooms or common areas that are divided up.
   • Sublease Term: The exact start and end dates should not exceed the original lease’s term, unless you are willing to draft a new lease with the original tenants leaving and the subtenants becoming the new tenants altogether. That new lease would then take over the original lease and sublease after they expire.
   • Reference to Original Lease: Provide a special clause that outlines how the subtenant(s) are bound to all terms and conditions of the original lease between the tenant(s) and landlord. These include property conditions for move-in/move-out, as well as specific rules on pets, parking, smoking, and property renovations.
   • Utilities and Services: Underneath that clause, provide a clear breakdown of which utilities, such as electricity, water, internet, trash, etc., are included in the rent or are the subtenant(s)’ responsibility.
   • Termination Clause: Provide details regarding how and when the agreement can be terminated, notice periods, and how this can correlate to the original tenants.

Finalizing the Agreement

With the new sublease agreement finalized, it’s time to get in contact with your tenant(s) and subtenant(s) to sign off. To finish the process, be sure to:

1. Review the Lease: Have a meeting with your tenant(s) and subtenant(s) to go over the original lease and sublease agreement. Outline any existing subletting clauses in the original lease, and compare and contrast the requirements in both leases to ensure all parties understand the agreed-upon terms.
2. Get All Parties to Sign the Lease: Have all parties sign the new lease and provide additional copies to maintain records. In this case, your new subtenant lease should have specific signatures for the primary tenants, the subtenants, and yourself as the landlord.
3. Confirm Rent Payment Channels: Clarify whether the subtenant pays you directly or pays the original tenant. I would recommend having them pay you directly as the landlord to avoid confusion or missed payments down the line.

With your sublease process outlined, you can communicate with your tenant(s) effectively and secure new subtenant(s) with less hassle.