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What are your rights when your tenant decides to sublease?

by | May 25, 2021 | Real Estate

When you crafted your lease agreement, you probably included a clause that addresses your tenants’ right to sublease. Some landlords outright forbid subleases, while others allow it – often on the condition that the tenant seek the written permission of the landlord first. When your tenant informs you of their intent to sublease, you might wonder what your rights as a landlord will be with respect to this new subtenant when they take up residence on your property.

What you can do

The good news is that the sublease won’t have any effect on your right to collect rent for your property. Under a sublease, the subtenant pays rent to the original tenant, who pays it to you. This means that the original tenant is still responsible to you for any unpaid rent, even if they’re not the ones currently living on your property.

This also applies to property damage. If the subtenant were to damage your property, you would be able to bring a lawsuit to recover the cost of the damage from your original tenant.

What you cannot do

We established that you could bring a lawsuit against your original tenant if the subtenant doesn’t pay rent or damages the property. The bad news is that, unless you have a contractual relationship with the subtenant, you won’t be able to sue the subtenant directly for rent or to evict them.

One way you can get around this is through a relet. When your tenant informs you of their intent to sublease, you could propose a relet in its place. That would essentially create a new contract between you and the subtenant, making them your new primary tenant. This might be beneficial if you think that your tenant is likely to be insolvent and that you would stand a better chance of receiving a recovery from the subtenant in the case of a breach of the lease agreement.

Subleasing comes with pros and cons for the landlord. It’s important to understand the challenges you may face if you decide to allow your tenant to sublease.

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