One of the questions that was raised by a college student whose lease expires within a few months was “Is is alright to sublease my unit and how much should I charge?”
You need to read your original lease to verify there is verbiage in the lease that allows you to sublease your unit or your individual space. If it is allowed within the lease then you know you can move forward. If you still have questions after reading the lease, check with local legal counsel and obtain their professional advice.
Should your Sublease be in writing? – Absolutely! You need to have a written agreement with the party that is going to sublease your space. You need to specify the address, the length of the sublease, the dates, the amount of the sublease, and various items need to be listed including but not limited to vacating guidelines, the date the rent is due, how the payments is to be made, list late fee charges and the length of the grace period if there is going to be one. Your Sublease should be very specific and it should cover about as many items as your original lease does. If the sub-lessee does not make their payment, you are still responsible for your portion of the rent that is due. This will fall back to your original lease. Double check your verbiage for confirmation.
How should I calculate the amount to charge the sub-lessee? I would take the amount that you are paying per month and divide it by the total number of calendar days in the month and calculate your per Diem rate. (The amount it cost you per day to live there.) Take your per Diem rate and multiply it by the number of days you are going to sub-lease your space. This will give you the total amount of your sub-lease. You will need to consider the following:
- Are you going to charge the sub-lessee a security deposit?
- Are you leaving some of your personal items on site for the sub-lessee’s use? If so, you need to make a list of what belongs to you and specify the condition and whether the items are to be returned to you in the same condition (minus regular wear & tear) as they were sub-leased for their use.
- Are you going to provide for an early payment discount?
- Are you going to have the sub-lessee complete an application? How well do you know the sub-lessee?
- Make sure you list the number of keys that were provided to the sub-lessee so you know how many keys they are responsible for returning.
- What is happening within your local rental market? Can you charge more than what you are paying due to the local supply & demand within your immediate marketing area?
- Business is business. No matter how well you know the sub-lessee you need to have everything in writing.
Sub-leasing can be challenging and if you have any questions at all, I would recommend seeking legal counsel. The list above is only a partial list of items to consider when subleasing your unit. You need to make sure that you are adequately covered and everything needs to be in writing.
Life happens, people get sick, lose their jobs, get involved in accidents, etc. No matter how good of a friend the sub-lessee is, you need to consider this a financial business transaction.
Should the sub-lessee have renters insurance? – Yes, it is recommended that everyone carry renter’s insurance. Having a renter’s insurance policy can help protect everyone’s interest. You will want to check with your insurance company to see if they offer a policy for a sub-leased space.
I would recommend that you take interior & exterior photos of the unit/space that you are sub-leasing. Make sure the photos are dated and they establish the condition of the property and the items left at the property for the sub-lessee’s use.
When in doubt, seek local legal counsel who are familiar with your local landlord tenant laws, who can prepare your lease/sub-lease and who will look out for your best interest.