Use Assignment And Subletting Apartments

To sublet (sublease) is to lease to another person a house or apartment that is already being leased to you. In legal terms, the landlord is the lessor, the tenant is the lessee, and the sublessee is renting from the lessee.

Assignment is an alternative to subletting in which the sublessee assumes the remainder of the original lease and deals with the landlord directly. In lease assignment, the original lessee remains financially responsible for rental payments and/or damage charges if the sublessee defaults. Novation is the term for a landlord voiding your original lease and entering into a new lease with a new tenant. In novation, you would recover your security deposit—providing there is no chargeable damage—and have no further legal or financial obligation to the landlord.

If you have a question about the legal aspects of leasing, legal remedies, or specific circumstances, consult an attorney.

Subletting Your Apartment

Check your lease. Are you permitted to sublet? If so, what steps or procedures must you follow? Are you required to notify your landlord in writing of your intention or to have the landlord approve any prospective sublessors? If your lease does not say anything about sublets, it is generally assumed that you can sublet.

Meet with your landlord. Discuss your intentions, gain written approval, and clarify the process with your landlord. Will the landlord permit you to terminate your lease without penalty if you locate someone to assume your lease or accept a new lease? This is usually preferable for students. If you plan to return to the apartment after a short time (one to six months) or before your lease expires, it might be better to sublet and maintain your claim on the apartment for your return. If the landlord allows subletting, or if the lease doesn’t prohibit subletting, it is the landlord’s option whether to allow assignment or novation.

If you sublet your apartment, realize that you are for all intents and purposes a landlord. You will need to establish, collect, document, and account for a security deposit. A deposit is necessary to protect yourself, but it imposes legal obligations on you just as it does for your landlord. You should have a lease agreement, in writing, to protect yourself from any problems or legal actions brought by your tenant. An oral agreement is binding in Pennsylvania but is subject to misunderstanding and challenges in court. In a sublet, you will still be responsible for paying rent. If your tenant is supposed to pay your landlord directly (in either sublet or assignment), you are responsible for any missing or short payments and late fees. You will be responsible for any damages to the unit and may be responsible for unpaid utility bills, telephone charges, and cable TV fees. Leasing and security deposit forms and explanations are available on the Internet, at public and university libraries, and in bookstores.

Realize that the actions of your tenant may also affect you. Tenant damage to the unit, building, common areas, or systems may result in legal action against you to collect damages. Legal action also may be required for you to collect damages from your sublessee. Unintentional damage to the unit or building, such as a fire or flood, may make the unit uninhabitable. Who is responsible for paying damage costs and related tenant expenses?

Off-Campus Living recommends that, whenever possible, students terminate their leases with their landlords, have sublessors sign new leases with the landlords, recover their security deposits, and have no further legal obligations or liability to the landlords or new tenants.

Looking for a Sublet Apartment

For all intents and purposes, subletting and leasing are identical. You are the lessee and should be familiar with the requirements and standards of both lessors, but that is only slightly more complicated than a traditional lease agreement. The advantages of subletting are that you may be able to sign a lease shorter than 12 months and you may be able to pay a discounted rental rate. In most rental communities and university student housing areas, leases are for 12 months. If you only need an apartment for one term or during the summer, a sublet can be ideal. Even if the landlord becomes the lessor, the length of the lease can be negotiated for the duration of the original lease term if you wish. Although the rental rate agreed to by the landlord and original tenant is customary for the sublet, it may be possible to negotiate a discount from the tenant. Remember, if the unit is not sublet, the original tenant is responsible for paying the entire rent for the remainder of the lease term. This can be a significant incentive to negotiate.

Subletting an apartment is a legal relationship. Know your rights and obligations. Document your discussions and all agreements. Be a knowledgeable consumer, a good tenant, and an informed landlord. For more information, call or visit Off-Campus Living. To list a sublet or to check available sublets, review sublet listings or visit our office.

A lease assignment agreement is a formal agreement transferring a tenant's rights and obligations to a new tenant. A lease subletting agreement is a more flexible arrangement that involves a lessee allowing an additional tenant to use the leased space, often on a temporary or short-term basis. Subletting arrangements may involve a secondary tenant using a space such as a commercial kitchen during the hours when the primary tenant isn't using it. Alternately, a subletting agreement could involve a secondary tenant could commit to using a space during a period such as a month or a season when the primary tenant is out of town.

Landlord Consent

Commercial lease agreements typically include provisions and terms regarding requirements and rules for subletting and assignment. Most commercial lease agreements specify that a tenant must obtain his landlord's permission before subletting his space; however, the landlord is usually prohibited from unreasonably withholding consent. Because a lease assignment is more permanent than a lease sublet, a landlord will generally be brought into the process to create an assignment agreement and sometimes to vet the new tenant by performing a credit check.

Fees

A lease assignment usually involves a fee being paid to the landlord to compensate him for the expense and time of meeting with a prospective new tenant and preparing a lease assignment agreement. As of 2012, a typical assignment fee for a commercial lease is $500. Although a primary tenant is usually required to obtain a landlord's permission before creating a subletting agreement, the terms of this this agreement are worked out between the primary tenant and the subletter, without the involvement of the landlord,

Financial Obligations

Both subletting and lease assignment agreements hold the primary tenant responsible for any damage or unpaid rent for which the secondary tenant is liable. Although a secondary tenant who signs an assignment agreement may commit to paying rent and taking out a liability insurance policy payable to the landlord, if the secondary tenant is unable to pay, the landlord can hold the primary tenant responsible for rent and damages regardless of the secondary tenant's lease assignment commitment. Similarly, a tenant who extends a sublet agreement to a secondary tenant still holds the primary responsibility for damages and debts associated with the property.

Compensation

A secondary tenant who signs a lease assignment agreement typically makes payments directly to the landlord because he has signed an agreement defining the terms between the two parties. A lease assignment often requires that the secondary tenant pay the full amount of the rent. In contrast, a secondary tenant who sublets a commercial space may agree to pay less than the full original rental amount, especially if she is just using the space during off hours. She will pay her rent to the original tenant rather than to the landlord.

About the Author

Devra Gartenstein is an omnivore who has published several vegan cookbooks. She has owned and run small food businesses for 30 years.

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