We've broken down the topic of subletting and highlighted the key points that you need to take away when making big decisions like these.
What is subletting?
Say you’re a tenant and you, in turn, lease out your apartment that you’re already renting from a landlord. That’s called subletting. Your name will remain on the lease, making you responsible for the property and the payments, but a third party subsidizes part or all of the rent.
The difference between subletting and assignment.
Subletting is temporary, but an assignment is a permanent transfer of tenancy. If you need to break your lease earlier than the rental contract dictates and you have no intention of returning, then you and your landlord would work to assign the property to another tenant.
When subletting, you are still liable to pay the monthly rent to the landlord and you then recover this from your tenant. In an assignment, you are no longer responsible for the rental.
Remember when subletting that you are responsible for the monthly payments until your lease expires as the original tenant with a legally binding lease agreement in place. With this in mind, make sure that the arrangements you put in place—whether an assignment or you're subletting—are legally sound.
Be sure to get your landlord's permission in writing before you start subletting.
Is subletting legal?
In the broadest sense, subletting is legal. However, laws differ between provinces and cities, and lease agreements may have a specific clause regarding subletting a property. In BC, subletting is legal as long as your rental agreement does not prohibit it, but you need written consent from your landlord.
If you're considering subletting, go through your rental agreement in detail and carefully note what it says about this topic. If there is no mention of subletting, go and chat with your landlord. In fact, discuss this with your landlord anyway, even if your lease agreement allows for subletting. Open and transparent communication is always the way to go when it comes to potentially sensitive matters like this. Sometimes, they may even offer some useful advice and pointers, especially if you have not had a subtenant before.
Be sure to get your landlord's permission in writing before you start to advertise for subtenants. Once you get approval from your landlord, subletting is mostly up to you. Legally, you become the subtenant’s landlord and collect rent from them. You still owe your landlord rent, so you’ll take what you get from your subtenant and pass it on.
Can the landlord refuse to allow subletting?
Nobody wants the cost and drama of a legal battle, so you'll find that most landlords are going to be reasonable about these matters. They will likely prefer to work with you to find a subtenant than worry about you not paying your rent or skipping town.
Legally speaking though, landlords in BC can refuse to allow you to sublet if they have reasonable concerns.
If your landlord has no reasonable reason for their rejection of your request to sublet, then you can take them to dispute resolution. Not an ideal solution, but it happens.
What if I sublet without consent?
This is one of the fastest ways to upset your landlord and step over onto the wrong side of the law. If you sublet without consent, you may well be violating the building's rules and the Residential Tenancy Act in BC. You and your subtenants could face eviction or legal action from the landlord—or both. Just don’t do it.
The benefits of subletting.
Like any decision, subletting comes with benefits and drawbacks. On the positive side, here are some good things that subletting can bring you.
It reduces costs.
Having a roommate to share costs is becoming increasingly necessary in our current economic climate. But, if your roommate gets married or emigrates, or if you and your partner decide to call it a day, then subletting will be an enormous help. Single-income living is not as easy as it once was.
It lets you travel.
What if you love your apartment, but you’ve been relocated to Europe for six months? Or, perhaps you’re at a point in your life where you can travel and explore the world.
Whatever the situation, you’re going to have to leave behind the comfort of your home for an extended period. Subletting is the perfect way to make certain that you have a home to return to. It’s also an ideal way to hang onto your beautiful space while you’re out of town and still have your rental covered.
It lets you handle economic issues.
Some choose to sublet their property when faced with job loss or financial concerns. It’s not an easy decision to give up your home, but it may make financial sense while you’re recovering economically.
Carefully monitoring your money situation allows you to take over your lease once you’re back on your feet, and you don’t have to go house-hunting again.
Charging subtenants more.
It's worth noting that while you can charge your subtenant more than what you are paying your landlord in BC, it may not be the best idea. Prospective tenants could find out how much you pay and not accept the higher rent you’re requiring of them, or charging too much may mean you cannot find a tenant in the first place.
You can keep your rental history.
Another key benefit of subletting is that you don’t have to break your tenancy agreement which is a real plus on your rental record. If you go about this process openly and honestly, your landlord will have no cause for complaint, and everyone stays happy.
Securing the property.
Short-term sublet agreements while you’re out of town offer a level of security to your property as a vacant home can attract the attention of criminals or vandals. A physical presence and daily activity in the home is an excellent way to discourage break-ins or petty theft.
Dangers of subletting.
When you sublet your property, you’re inviting strangers to share your space or trusting them with your reputation. You are ultimately responsible for this property while your name is on the main lease.
Subletting can come with a host of potential issues, many of which you can avoid by following a few simple steps. So, what should you look out for?
Dubious tenants.
You can expect that everyone will be on their best behavior when they meet you. So how can you tell the good tenants from those that are going to give you a migraine?
As part of your advert for subletting, be sure to let potential subtenants know that you will be conducting background checks. This should deter those who may have a poor credit record or skipped out on their last rental.
When you have collected the application forms from interested parties, choose the people you prefer and start your research. A background check will uncover evictions or rental issues as well as any lurking criminal history. Be thorough, and don't be afraid to ask difficult questions.
A word of advice: don't offer your property on a first-come, first-served basis. Rather, give yourself the option to choose the best application.
Stealing your lease.
Choosing the wrong subtenants can cost you more than a headache.
Some underhanded individuals may love their new house so much that they aren’t in a hurry to move when their lease agreement is up. Once they’re in and comfortable, they may try to bypass you entirely and sign a rental agreement on the property with the landlord when the lease renewal rolls around.
Alternatively, there is the possibility that they refuse to move when you are due back. Having to evict errant tenants is time-consuming and costly—not to mention a very unpleasant process.
Misinterpretations.
Once you’ve chosen your perfect subtenant, ask them to sign a written agreement.
Too many people still rely on a handshake, especially when dealing with friends, but this is always a bad idea. Tenants can have surprisingly short memories regarding matters like rental payment dates, who pays for damages or the fact that you’re not allowed pets in your apartment. In some cases, there may be an honest misunderstanding between the two parties minus any nefarious agenda. No matter what, a written contract protects you both.
Make use of your own tenancy agreement as a foundation or find one online. Whatever you choose, be sure to note down the important clauses and agree on these upfront so that there is no room for ambiguity.
Damage.
While the landlord's insurance covers the overall health and maintenance of the building itself, you may have renter's insurance, which covers things like your personal belongings, water damage, fire and theft.
If you’re subletting the whole property and leaving your furniture and other possessions behind, it’s well worth checking with your insurance company as to whether your policy covers a subtenant. If not, err on the side of caution and remove your belongings before signing the space over.
Bear in mind, this lease is still in your name, and should your subtenant cause damage to the property it will come out of your security deposit.
Cash flow.
Probably one of the most frustrating elements of subletting is managing the rental payments. If your tenant pays you late then it inevitably has a knock-on effect on your finances which may affect your credit rating or set you up for additional and unnecessary fees.
If you ever find yourself in a situation where you have to sublet your place, know that people have done it before. Always clear it with your landlord first and be sure to pick responsible tenants. After all, just because your circumstances have temporarily changed, that doesn’t mean you have to give up your home for good.
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