Sublease Liability Issues
Whether you are a corporate officer or a college student, it is common to find yourself tied to a lease that hinders your ability to move on to a new job or a new phase in your life. Finding someone to sublease the space can be a godsend---but take a few simple precautions to make sure it doesn't turn into a nightmare.
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Permission to Sublease
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Permission to sublet Three parties are involved in subleasing: the landlord, the original tenant and the subtenant. Read the primary lease carefully, as it may already address whether subleasing is allowed and under what circumstances. You must have written consent, with detailed terms, from the landlord before entering into an agreement with a subtenant.
Beware of Assignments
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Don't agree to an assignment unless you are absolved of responsibility. If you sublease your space to another person, you essentially become his landlord and maintain the relationship with the primary landlord. You are the intermediary, and you still have ultimate responsibility for the property for the remainder of the lease.
If you assign the lease, you step out of the picture and your tenant has the relationship with the primary landlord---until something goes wrong. If the assigned defaults or causes damage, you are still liable.
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Multiple Tenants
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Consider your roommates. If anyone else has an interest in the property, she should be brought into any sublease negotiations. For example, if you have a roommate or a business partner, she definitely has an interest in who moves in, and if her name is on the lease, she has the same legal rights as you.
Terms of the Lease
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Spell out the terms of the sublease. The terms of the original lease should be carried over into the sublease. This might include arrangements regarding pets, smoking, how many people may inhabit the property or the type of business for which the property is zoned. If you agree to one set of terms but allow more lenient terms to your subtenant, you are liable.
You may also require more stringent terms. If dogs are allowed under the terms of the primary lease, that does not mean you have to allow them.
Require a damage deposit from your subtenant. If you have money on the line, so should he.
Bankruptcy
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Bankruptcy If your subtenant defaults or files for bankruptcy, it is still your responsibility to pay the primary landlord. If you file for bankruptcy, your subtenant could face eviction. If the primary landlord files for bankruptcy, you may still have obligations to your subtenant. Be sure to write a clause into the sublease limiting your liability, and hopefully protecting the other parties, should a default or bankruptcy occur.
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References
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