If you are the tenant of a property, residential or commercial, your lease agreement may allow you to further lease the property to a subtenant. To do so, you should use a Sublease Agreement to ensure your rights and the subtenant's rights are protected.
In essence, you'll transfer the same rights you have over the property to a third party. In this case, you become a sublandlord or sublessor. You can establish a Sublease Agreement for any period you choose up to the time frame set by your own master lease agreement.
A Sublease Agreement is a legally-binding agreement between a sublandlord and a subtenant that allows the subtenant to use a leased property. Typically, you'll use a Sublease Agreement if you need to temporarily relocate from a leased property. To avoid having to use your own money to pay rent on the property, you can find a third party to lease the property from you for a prescribed amount of time.
If you are a sublandlord, protecting yourself with a properly drafted Sublease Agreement is essential. A Sublease Agreement does not invalidate the original lease agreement between the landlord and the current tenant, also known as a master lease. The sublease cannot exceed the length of the master lease or grant rights to the subtenant that the master tenant does not have.
Depending on your state, a Sublease Agreement may also be known as:
Sublet Contract
Sublease
Sublet Agreement
Sublease Contract
Whether you're a sublandlord or a subtenant, you should always use a written Sublease Agreement. It's especially critical to use a written agreement as a sublandlord as you're ultimately responsible to the original landlord for any disputes regarding the property.
You can use a Sublease Agreement if you need to vacate the premises before your lease expires. A Sublease Agreement allows you to avoid early termination fees by transferring rights to a third party and collecting rent. You can also occupy the property and sublease part of it, such as a single room.
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Landlord: The full name and address of the person who owns the property.
Sublandlord: The full name of the original tenant who is subleasing the property to a subtenant.
New Tenant: The full name of the new tenant (subtenant) of the property entering into a sublease.
Premises: Full address and description of the property being leased.
Term: The length of time the property will be leased, usually expressed as a start and end date.
Original Lease: All the details of the original lease, including the start and end dates, the rights and obligations of both parties, and any additional clauses, such as rules regarding improvements or alterations to the property.
Rent Details: The cash amount payable to the sublandlord every billing period.
Security Deposit: If required, a security deposit amount should be written into the Sublease Agreement.
Indemnification: A contract clause stating that one party is responsible for paying back any losses incurred to another party as a result of the first party's actions.
Holdover Rent: A rent rate that applies if a subtenant remains on the property after the Sublease Agreement expires. This is usually a rate significantly higher than the rent established in the Sublease Agreement.
Remedies: A contract clause explaining what the sublandlord can do if the subtenant is unable to pay rent.
Event of Default: A condition that allows the sublandlord to demand immediate and full repayment of the debt or take actions described in the Sublease Agreement.
Participating Broker: A real estate sales agent who finds a buyer for the subleased property.
To be valid, a Sublease Agreement needs to be signed by the subtenant, the sublandlord, and the original owner of the property. If witnessed, it should also carry the signatures of the witnesses.
In most cases, a Sublease Agreement doesn't need to be notarized. However, notarizing a Sublease Agreement is a good idea if you want to provide added security to the agreement. Check your state and local laws for more specific signing requirements if you have a complex arrangement.
After the Sublease Agreement is signed and dated, all parties should keep a copy for their personal records. Attach a copy of the Sublease Agreement to every copy of the master lease agreement. Subtenants should keep a signed copy until they vacate the property.
You're not required to file the Sublease Agreement with any governing body, but you can file a copy with the County Recorder's office where the leased property resides for added protection.
Generally, you can sublease any kind of property as long as you come to an agreement with the landlord of your master lease agreement. There are no legal restrictions about subleasing specific categories of property.
Yes. There's nothing inherently illegal about subtenants leasing property to third parties ad infinitum. However, the situation becomes increasingly complicated.
The subtenant needs to acquire permission from both the original tenant and the landlord of the master agreement. They must also have previous agreements amended unless the original contract already has provisions allowing the further subleasing of the property.
Yes, it's technically possible but highly discouraged. You'll risk the subtenant violating the oral agreement and have to prove that the landlord agreed to let you sublet the property. With a written agreement, you won't have to prove anything to a court, because all the terms of the sublease are in writing.
If a Sublease Agreement is established under terms of automatic renewal, the lease will continue indefinitely until either the sublandlord or subtenant gives notice to the other party. This does not mean that the Sublease Agreement can exceed the term of the master lease. It still ends automatically as soon as the master lease expires.
Yes. You can sublease any part of the property and over any period of time as long as all the parties involved agree to the terms and sign the Sublease Agreement.
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