That Makes Cents: Steps to a Successful Sublet

That Makes Cents: Steps to a Successful Sublet
••• Zerbor/iStock/GettyImages

Subletting your place for the summer, or even the remainder of your lease, can provide you with much needed mobility and money. An unexpected job relocation or a lengthy trip may be a good reason to sublet your room or rental, while allowing you to keep the rent paid and your lease agreement in tact. A successful sublet requires research, planning and paperwork, as you'll need to get the terms ironed out in writing. A well-drafted sublet agreement can protect your interests as well as a sublessee's. Once you've determined that subletting makes sense for your situation, there are five simple steps to subletting your place.

When Subletting Your Space Makes Sense

An extensive trip of several weeks or more, a summer or winter break, or job opportunities elsewhere are all common reasons to sublet. For example, in college towns, students who go back home during breaks or study abroad often fill their rental units – and the financial gap – by subletting to others seeking short-term accommodations. Subletting is so common in college towns, that universities often publish guides to help students navigate the process.

A long-term lease can deter you from taking job opportunities or internships far away. Subletting can allow you take that dream job and cover your rent until your lease is up. Likewise, a much needed vacation or lengthy travel plans that would otherwise render your rental useless can bring in needed cash during your absence.

Find Out if Subletting Is Allowed

First, find out whether your landlord will be okay with someone living in the rental while you're gone. Many rental or lease agreements include clauses that prohibit sublets. Check your agreement or call your landlord if you're interested in subletting, and before you start searching for a sublessee. Subletting your place without the landlord's permission can lead to termination of your rental agreement, resulting in you and the sublessee losing your place to live.

Put It in Writing

Your landlord should sign the written sublet agreement that you make with a sublessee. Your landlord may provide his own agreement for you and the sublessee to sign, or you may draft a legally binding sublet agreement after researching your state's subleasing laws. If you're a student, your university's legal services department may provide a sublease agreement. An internet search for state-specific sublease templates should yield samples of legally-binding documents that you can either print or use as an example when drafting your own.

Rules On Charging Rent

Unless your unit is rent-controlled, and therefore subject to more strict rules on subtenancies, you can charge whatever rent you'd like. In rent-controlled cities, such as New York City and San Francisco, you can't charge your a sublessee more than the rent you pay to your landlord. An exception may be made for furnished units. Pricing your unit competitively, based on local rents for similar units, is your best bet for finding and retaining a good sublessee.

Collect a Deposit

Get a deposit from the sublessee, just as a landlord collects a security deposit from a tenant. State laws regulate the handling of security deposits between landlords and tenants, such as:

  • Maximum amount of the deposit
  • Type of account it must be held in
  • Rules for deductions that can be made to the deposit
  • How long you have to refund it after the sublessee vacates the property 

A deposit for a sublet protects you in the event the sublessee doesn't stay through the end of the agreed-upon period, fails to pay rent, damages the premises, or simply doesn't show up to take possession of the rental. Also, an irresponsible tenant may do things that can cause you to lose all or part of your own security deposit, such as damage the property or rack up fines for violations within a homeowner's association. Your written agreement should specify the deposit amount and the rules for refunding it. Further, you should make sure not to spend it, because if all goes as agreed, you must return it to the sublessee.

Inspect and Document Conditions

You may choose to leave personal belongings in the rental unit, either to be stored away or used by the sublessee. Photograph anything of value that you are leaving behind and conduct a move-in inspection with the sublessee to determine items that are not working or were already damaged. Documenting the property condition and your valuables can prevent later disagreements between you and the sublessee and your landlord. You should also photograph the rental unit and premises themselves, to ensure that you have a general picture of what the home should look like when you retake possession.

Avoid leaving items of great value, and specify their absence from the beginning. For example, your sublease agreement should state whether the rental is fully furnished, partially furnished or unfurnished. If you leave valuables within the unit, place them under lock and key or in a safe. Consider using an outside storage unit or a trusted person's home to store items that you wouldn't want damaged or lost during the sublet.

Find a Solid Sublessee

College campuses or current roommates, if you have any, are good starting points for finding the right sublessee. Involve your roommates in the search and vetting process to ensure they are comfortable with their new, albeit temporary, roommate. Web-based housing classifieds, local circulars, newspapers and flyers within your neighborhood or building can also yield solid candidates. Whether you put out ads, take a personal referral or use social media, you should conduct a credit check and background search on the sublessee. Poor credit, a lack of employment or housing references, and run-ins with the law are all red flags to carefully consider before selecting a sublessee.

When a Sublet Goes Wrong

No sublet is fool-proof, no matter how hard you try to find the right sublessee. Should your renter decide to not pay rent, move out early or not vacate at all, consider consulting an attorney for advice. Other violations of the lease may also compel you to terminate the sublet agreement, such as moving a pet or other person into the unit. It's important to understand your rights as "landlord" and their rights as "tenant" when it comes to highly sensitive legal steps, such as serving a notice or deducting and refunding their deposit. Other resources for a sublet-gone-wrong include your state's landlord-tenant guide, which you can find on the internet.