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Should I allow my tenants to sublet or sublease my property?

| May 28, 2021 | Landlord/Tenant Matters

In preparation for opening up your premises for rent, you probably took great care in drafting your rental agreements. You made sure to include provisions that protect you and give you options in case your tenants stop paying rent or cause damage to your property. An important decision that every prospective landlord must face is whether to allow or forbid their tenants from subletting or subleasing the premises. How do you know which is best for your situation?

Subleasing

Subleasing is when your original tenant finds a subtenant who lives in the premises in the place of the tenant. The subtenant pays rent to the tenant, who pays it to you.

If you have not expressly forbidden subleasing in your rental agreement, New York law requires your tenant to request permission from you in writing before subleasing. You have thirty days in which to respond.

If you fail to respond within those thirty days, you are impliedly giving permission to sublease. If you refuse to allow the sublease, you must state a rational reason why – such as because you believe that proposed subtenant is unlikely to be able to make rental payments.

The advantage of subleasing is that it decreases the chances of you ending up with a tenant who is unable to make rental payments. If your tenant can’t pay, but they find someone who can and then pass that rent on to you, it saves you the hassle of having to evict them and find a new tenant yourself.

If the subtenant damages your property, you can sue the original tenant to recover the costs of repairs. That is because you retain a contractual relationship with the original tenant.

Subletting

Subletting is when the subtenant takes over the rental contract from the original tenant. A new contractual relationship is formed between you and the subtenant, and they become your new tenant.

Allowing a sublet might be advantageous if you think that your original tenant would not be able to provide you with the cost of repairs in the case of property damage. It can also be a good idea to accept a sublet if you think that the subtenant is more responsible or reliable than the original tenant.

Running residential properties is a complex task, and many things can go wrong. It’s good to know what the advantages and disadvantages are of allowing subletting and subleasing before you draft your rental agreement so that you know what to expect and what your rights are.

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