Residential Sublease Agreements

A subleasing contract is an effective method to allow a tenant to save money on expenses if they decided to vacate their space and want to avoid damages for breaking their lease. By entering into a sublease agreement with a third party, the tenant/sub-landlord can lease their space, and reduce financial liability. A sublease contract must be approved by the landlord first. The parties to the sublease contract are the landlord, the sub-landlord (tenant) and the sub-tenant. The sublease agreement should be signed and date by all parties in order to be considered a valid and enforceable contract.   A sublease form can be drafted by the respective parties or a real estate attorney or real estate broker depending on the laws of your state. 

Reviewing the Agreement

It is recommended that the tenant review their lease agreement first to make sure that it allows them to enter into a sublease agreement. If it does, then the next step is to let the landlord know why you need to enter into a sublease to make sure that the landlord will agree to it. A sublease agreement can be used for a residential sublet as well as a commercial sublet.

Minimizing and Protecting Tenant Risks

If you are the tenant, you may still be held liable for the rent, damages or any eviction expenses if your sub-tenant does not comply with the terms of the sublease contract. Therefore, it is a good idea to negotiate with your landlord a release from the original lease first. This way the landlord can enter into a new agreement with your sub-tenant, and you are no longer financially responsible.   It may be worth paying a penalty fee to the landlord for early termination instead of running the risk that your tenant may not pay the rent or causes damage to the premises.

Another way to protect your financial interests is to obtain an upfront security deposit and all the rent from the sub-tenant.

Sublease Agreement Provisions

A sublease agreement should contain the following binding provisions:

• Parties’ names and contact information
• Lease term from beginning date to ending date
• Address of the premises
• Rental amount
• Use of property    
• Party responsible for operating expenses   
• Explanation for the sublet
• Signatures of all parties

Sublease Agreement Example

Should you Get Help from a Landlord Tenant Attorney?

All parties should consult with their landlord tenant attorney prior to entering into a sublease agreement to make sure they understand their responsibilities and obligations under the sublease contract.  The risks of subleasing should be considered to make sure the benefits are greater.

Sublease agreements can have a substantial financial impact on all parties, especially the tenant/sub-landlord. The landlord tenant attorney can explain the consequences and how they may affect you.  An attorney can also advise the parties on how to avoid or minimize the chances of a landlord/tenant dispute and help if one arises.