A sublease agreement can come in real handy when you, as a tenant, want to re-lease out the rented property to someone else (the sublessee or subtenant). This typically is required when you have to move out before finishing the term of the original lease with the landlord, or expect to stay away from your rented property for extended periods of time. Whatever the reason be, it makes a lot of financial sense to sublet the property that you have taken on rent and avoid letting it sit unused.
By inking a sublease contract, you act as a middle-person between the landlord and the sublessee, while still paying rent to the landlord every month.
This article will break down the essential information you need as a sublessor, and also provide a free downloadable sublease agreement template for your personal use.
What is a Sublease Agreement?
You just got the perfect job in another city and need to move right away! But, there are still 8-odd months left on your original lease and breaking the contract would mean a hefty penalty (not to mention the damage it will do to your credit score). It also doesn’t make sense to keep paying rent on an apartment that you won’t be living in. So, you decide to sublet it to someone else for the remainder of your lease period.
To ensure that the particulars of the subletting are clear and legally binding, between the original tenant (sublessor) and a new tenant, both parties need to sign a sublease agreement. Here are few important features that one needs to keep in mind while drafting the relevant agreement:
As with most contracts, it is important to start off by setting the context of the deal, with clear description of the parties and other related contracts involved in the same. This section should include the following details:
This is one of the most important sections of the sublease, where you mention the duration of the sublease agreement. Typically leases last a year and beyond that the subtenant is not legally allowed to stay in the property, unless specifically authorized by the subtenant or landlord in writing.
Every month, a rent is payable by the subtenant to the tenant. This amount needs to be clearly mentioned, along with late fees payable if the rent is deposited after the due date. Also, mention who is responsible to pay for the utility bills.
The security deposit amount and under what circumstances it will be returned are also important clauses to include.
Signeasy tip: It is also possible for subtenants to pay rent directly to the Landlord. In such cases, the wordings of the clause can be altered accordingly.
Will the original tenant or the subtenant be responsible for damages, payment of rent, and any breach of the initial lease agreement? What about home insurance, does the subtenant need one too?
And most importantly, can the subtenant further sublet the property?
Answers to all these questions and more falls under this section of the sublease agreement.
Before handing-over the property to the subtenant, ensure that together you undertake a home inspection and get an inventory form and checklist filled out. This will stand as proof for the physical state/condition of the property, before the sub-tenant moves in.
Also, you need to make mention of how damages or cleaning needs to be managed, once the sublease agreement expires.
Signeasy tip: Typically a clause should be added that holds the landlord responsible for providing building services and utilities, including plumbing, electricity, water, janitorial service, to the sub-tenant.
It can end up being quite messy, if either party fails to honor the contract. To help reduce the uncertainties in such situations, this section of the sublease agreement can really help.
Make sure that you first outline what situations can be classified as breach of contract and then go on to explaining the steps that need to be taken to resolve the issue.
Signeasy tip: Also consider adding provisions that protect the subtenant against defaults by the Landlord or tenant, such as failure to provide access to building services and utilities or forceful early eviction.
This section features some common terms you will end up seeing in most contracts, but it doesn’t make it any less important. Here are a few things that are clarified:
Signeasy tip:As a best practice, add a termination clause which outlines under what circumstances either party can end the contract and what penalty that would incur.
Have you ever heard of a contract which doesn’t require signatures? Unlikely! That is why this section is so critical. This attestation section makes space for the subtenant and the tenant to sign, making your agreement official.
if you do not wish to (or cannot) physically sign the document, I would recommend using an eSignature solution that makes remote signing a breeze. Not only is it super easy to sign with it (I bet a 4th grader could use it), it also does away with having to print, scan and courier the contract. Additionally, this contactless solution keeps signers safe in times of COVID-19.
Signeasy tip: If you tend to sublet your property often, consider downloading this sublease agreement template and saving it on Signeasy. You can then reuse it as many times as you like!
If you want to sublet just a private room or part of the property to a third party, you can totally use this template. But, some of the edits that you absolutely should make when renting out just a room would be:
Signeasy tip: Each subtenant might have different specific dates of their lease, so be sure to mention that too.
Having a thorough room rental agreement in place can really help promote harmonious living between yourself and your subtenant. You could also include a few behavioural clauses to the contract, such as: