The Pros and Cons of Allowing Your Tenant to Sublease

Subleasing is a subject of much debate in the world of property management, and for good reason. There are many complexities regarding maintenance requests, access to the property and responsibility which deter many landlords. As a landlord you have the power to not allow subleases on your properties, but should you?

Here are the pros and cons of allowing a sublease:

Pros:
Lower vacancy rates
Allowing a sublease when a tenant finds themselves moving suddenly or traveling for an extended period of time means your property won’t sit vacant. Vacancy is costly and is something you should generally try to avoid. Allowing the tenant to sublease means they are want to come back or fulfill their obligation. Keeping a quality tenant on a lease is always a good idea as they are likely to renew.

Little change
With a sublease, the original tenant is still the responsible party. Generally, a sublease is set up for rent to be paid by the sublessor to the tenant and then paid to you. This results in what should be an imperceptible change to you as the landlord. Maintenance requests are still generally managed by the original tenant as well. In the right scenario, you should hardly notice there’s a new tenant temporarily occupying the unit.

Save time
Searching for a new tenant is no easy feat and can eat up a lot of your time. From advertising to running background checks the process can quickly become monotonous and exhausting. A sublease saves you the trouble of finding a new tenant because the work has already been done for you! Although you may want to consider requiring an application and background check to protect yourself.  

Cons:
Additional Risks
Depending on your lease agreement with your tenants, a background check may not be required for a sublessor. This not only decreases the security of your property but also of your bank account. While the original tenant is still responsible to you for rent, if the sublessor doesn’t pay them you could be faced with having to serve an eviction notice. The sublessor may also be unfavorable and not take proper care of the unit since they are generally there for a short term and have less motivation to be a good neighbor or keep the unit in good condition.

Added cost
The most common complaint landlords receiving about short-term tenants are noise complaints. A bad environment in one of your properties could lead to quality tenants moving out which could increase your vacancy rate and have a negative impact on your bottom line. As stated above, short-term tenants are also more likely to treat the unit poorly thus leaving you the hassle of organizing repairs and collecting the costs from the original tenant.

Potential legal issues
Taking legal action or proving fault against a sublessor is a challenge, as you are not technically their landlord. The potential for legal issues increases when you bring a third party into the mix, especially when you may not have a say over who they are. With a risk of having to issue a double eviction (to both the original tenant and sublessor) or fighting to prove fault and recoup costs in the event of property damage the risks are high.

Overall, subleasing can work in your favor if you structure your lease agreement correctly. If you’re ready to hire a property manager to manage these situations, contact us today!