The landlord-tenant relationship can be complicated. The landlord-subtenant relationship can be more complicated because there’s no such thing. If you’ve been renting out your South Florida investment property for some time, you’ve probably heard of the term “subletting”. It’s when a landlord (you) rents out their unit to a tenant, who then rents it out to another tenant. In that situation, the tenant is no longer a tenant, but instead, a landlord.
Saying “yes” to subletting can create complications, which is why a lot of South Florida property owners steer clear of it. However, allowing subletting also has its advantages, such as lower vacancies, lower turnover, and so on.
Property management with one tenant is hard as it is. It’s even harder when you have another individual to consider. So, should you let your tenant sublet? Is it worth it? What rights will the subtenant have? What rights will the property owner have? We’ll answer these (and more) below.
What is a sublease?
A sublease is a legal agreement between a tenant and a subtenant to rent a unit. In a sublease, the landlord (you) rents out the unit to a tenant, who then rents it out to another tenant (subtenant). The “original” tenant does not terminate the lease agreement, but instead, “passes” it on to another person. In this arrangement, the subtenant accepts the responsibilities of the first tenant, including paying the rent. Sublease or subletting is one of the crucial things landlords should know and be aware of.
To be clear, let’s spell out some terms that’ll be used in the discussion:
- This is you, the property owner.
- Original tenant. This is the tenant that you rent your unit to.
- This is the person that your tenant rents your unit to.
What is the relationship between the landlord and the subtenant?
Since the original tenant leased the property to the subtenant, that means that the original tenant is the subtenant’s “landlord”. The landlord (you) does not deal with the subtenant. The subtenant occupies the rental property only temporarily and does not enter into a contract with you. However, since the lease agreement was signed by the original tenant, they have to deal with the landlord or property management company directly.
Is subletting legal?
Subletting is legal. All the original tenant needs to do is to obtain permission from the landlord. If you want to allow subleasing in your rental property, be sure to approach a lawyer or South Florida property management company. They can help you weigh the pros and cons of allowing subleasing, as well as draft a fool-proof lease agreement.
Why do landlords allow subleasing?
The landlord has authority to allow subletting in a rental property. To understand why let’s look at the advantages of having a sublessee:
#1 No vacancies
As a property owner, you’re well aware of the effects of having a vacant property. To ensure a steady stream of rental income, consider letting your tenant sublet their unit. If your tenant wants to terminate their lease because they need to relocate temporarily, or if they can’t afford to pay the rent, bring up the concept of subleasing. That way, you won’t have to deal with a vacancy, and your tenant won’t have to terminate their lease before the end date.
#2 Tenant retains the responsibility
Even if the subtenant stops paying rent, the original tenant is still responsible for paying you, the landlord. This is because the original tenant was the one that signed the lease agreement. Plus, the original tenant wouldn’t want to get in trouble with you, so they’ll make sure that their subtenant takes care of the property. Basically, your original tenant gets to be a landlord.
#3 Tenant finds potential tenants
If your original tenant is subleasing the unit while waiting for their lease agreement to end, you no longer need to find a replacement tenant. Chances are, the subtenant is responsible, so you don’t have to deal with the stress of tenant screening.
What rights do subtenants have?
What the subtenant can and can’t do depends on what’s stated in the sublease agreement between the original tenant and the subtenant. In general, the subtenant has the same rights as the original tenant. With that said, the subtenant also assumes the same responsibilities as the original tenant, such as cleaning the property, conducting general maintenance (e.g. mowing the lawn), and so on.
As the landlord, you won’t have to deal with the subtenant directly, anyway. The subtenant is your tenant’s problem.
Can the landlord evict the subtenant?
The landlord can’t evict the subtenant. Remember, the subtenant signs the sublease agreement with the original tenant, and not with the landlord (you). But don’t worry, this doesn’t mean you have no power. Since your original tenant signed the lease agreement, you can evict them for violating it. For instance, if the subtenant stops paying rent, and as a result, your tenant can’t pay rent, you can evict your tenant. This will also “evict” the subtenant.
Can the subtenant be made to pay directly to the landlord?
It isn’t uncommon for tenants to charge a slightly higher rent. This isn’t illegal, but if you want to deter your tenants from doing this, you should add a clause in the lease agreement that states that subtenants need to pay you directly.
Can the landlord choose the subtenant?
The landlord can choose the subtenant if it is stated in the lease agreement with the original tenant. This is actually a good property management practice, as you would naturally want to protect your property, as well as other tenants if you own a multi-family property. Consider adding a clause that gives you the authority to screen prospective subtenants, which includes a credit check, background check, and the like.
Subleasing can be complicated for both the landlord and the original tenant. That’s why you should ensure that your lease agreement clearly states whether or not it is allowed. If you allow subletting, be sure to have some degree of control. The last thing you’d want is to lose power over an investment property that you own.
For expert guidance on subleasing, get in touch with the property managers at Luxury Property Care. We have an in-house team of real estate lawyers who can help you navigate the complicated landlord-tenant and tenant-subtenant relationship.