Sub-leasing your home or finding someone to assume your lease

What Is Sub-leasing?

Definition of Sub-leasing

Sub-leasing is when you rent out your home to another person (subtenant) while keeping the lease agreement with the landlord intact. In this situation, you remain the primary tenant and are still responsible for fulfilling the lease terms. However, the subtenant makes rent payments to you, and you pay the landlord as usual. While this might seem like an easy solution, there are important factors to consider.

Risks and Responsibilities of Sub-leasing

One of the major risks of sub-leasing is that you are still legally responsible for the lease. If the subtenant fails to pay rent or damages the property, you can be held liable by the landlord. Even though the subtenant is responsible for the rent, the lease remains in your name until its expiration.

Key Considerations Before Sub-leasing

Before entering into a sublease agreement, carefully review your original lease to check for any clauses about sub-leasing. Some leases may prohibit subletting or require you to seek the landlord's approval first. If your lease allows for sub-leasing, make sure to follow any requirements, such as providing the landlord with details about the subtenant.

How to Sub-lease Your Home: Step-by-Step

Step 1: Verify Sub-leasing is Allowed

Check your lease agreement to ensure it permits sub-leasing. If the lease doesn’t address sub-leasing, it’s a good idea to reach out to your landlord for approval. It’s essential to document this approval in writing to avoid disputes later on.

Step 2: Find a Suitable Subtenant

Look for a subtenant who meets the landlord’s criteria and is reliable. Consider advertising the rental on popular websites or through personal networks. Ensure that the person has a strong rental history and can pay the rent on time.

Step 3: Draft a Sub-lease Agreement

Once you have a subtenant, it’s crucial to create a written sub-lease agreement. This contract should include:

• The rent amount and due date

• The length of the sublease and move-in/move-out dates

• A clear statement of the responsibilities of the subtenant (including maintenance and utilities)

• Security deposit requirements

• Consequences for breaking the sub-lease

Step 4: Obtain Landlord Approval

Even if your lease allows sub-leasing, you may still need to get written approval from the landlord. Make sure this is documented so that you’re protected in case of any issues.

Lease Assumption: A Better Alternative to Sub-leasing

What Is Lease Assumption?

An alternative to sub-leasing is lease assumption. This process involves having another person take over your lease entirely. If you find someone to assume your lease, they become legally responsible for the property and the rent payments. In essence, you transfer your interest in the lease to the new tenant.

Advantages of Lease Assumption

One of the main benefits of assumed leases is that you are no longer legally bound to the contract. If the person who assumes the lease fails to pay rent or damages the property, the landlord cannot hold you responsible. However, it's essential to get formal written confirmation from your landlord that you’re released from the lease after the assumption.

Risks of Lease Assumption

If the person who assumes your lease breaks the agreement, the landlord can still pursue you for any owed money if you're not formally released from the lease. Always ensure that the lease assumption is processed correctly and that you are officially removed from the lease before the transfer takes place.

How to Complete a Lease Assumption

Step 1: Get the Landlord’s Approval

Like with sub-leasing, the first step in lease assumption is getting your landlord’s approval. Some landlords may allow lease assumption without hesitation, while others may require additional documentation or a formal review process.

Step 2: Choose the Right Candidate

Selecting the right person to assume your lease is crucial. Ensure they meet all of the landlord’s criteria, including creditworthiness and rental history. The person must be financially capable of taking over the lease’s terms.

Step 3: Draft a Lease Assumption Agreement

Work with the landlord to draft a lease assumption agreement. This document should outline the new tenant’s responsibilities, the terms of the lease, and when the assumption will take effect. Make sure to get all of the necessary signatures, including your own and the new tenant's.

Step 4: Finalise the Lease Transfer

Once the lease assumption agreement is signed, ensure that the landlord formally releases you from the lease. This will protect you from any future liabilities.

Additional Alternatives: Negotiating with Your Landlord

If sub-leasing or lease assumption isn’t an option, you may want to negotiate directly with your landlord. Some landlords may be willing to terminate your lease early without penalty, especially if they can find a new tenant quickly. Consider offering to help find a replacement tenant to sweeten the deal.

Terminating Your Lease Early

Some landlords may allow you to terminate your lease early, often for a fee or by providing notice well in advance. This may involve paying for the remaining rent or covering advertising costs to find a new tenant.

Conclusion: Which Option Is Best for You?

Whether you choose sub-leasing or lease assumption, both options can offer solutions to avoid breaking your lease and incurring penalties. Carefully weigh the risks and responsibilities associated with each option before proceeding. If you’re uncertain, seeking professional legal advice can ensure that your interests are protected throughout the process.

If you decide that sub-leasing or lease assumption isn’t the right path for you, consider discussing early lease termination options directly with your landlord to explore more flexible solutions.