The Difference Between Leases and Subleases

What is a sublease, and why should you get one?

Subleases can provide you with a place to live without anchoring you to an extended lease.

For those who are moving without a job or who can’t find an apartment in a new city, subleases can be extremely helpful.  Subleases usually have a discounted rate and come furnished, making transitions to new cities cheaper and easier.

However, what exactly are they?

What Is a Lease?

A lease is a contract between a landlord (lessor) and renter (lessee). For apartment leases, the landlord is often an apartment complex or a rental agency.

In the lease, the renter agrees to pay the landlord to live in the property for a specified amount of time, usually a year, though this can vary.

What Is a Sublease?

A sublease is created when the renter decides to rent out the apartment he or she is already renting. For example, if you rent your apartment to another person, you’d be creating a sublease.

Subleases are good for renters who are going on extended vacations or otherwise won’t be staying in the apartment they are renting. By subleasing, they can essentially have someone else pay their rent.

A sublease, then, is a contract between an original renter (sublessor) and a new renter (sublessee).  The new renter agrees to pay the original renter a certain amount of money to live in the place for a specified amount of time, usually a couple months.

Learn what terms to include in your sublease.

What About the Landlord?

The landlord still owns the apartment during a sublease. The original renter still owes the landlord rent, but the original renter can use the money he or she makes from the sublease to pay that rent.

Importantly, the new renter and the landlord are not in a contractual relationship. So, if the rent is not paid, the landlord cannot sue the new renter for the rent.  The landlord can only sue the original renter, who can then sue the new renter.

That being said, the landlord can kick out the new renter if rent isn’t paid. So, if the new renter pays the original renter, who fails to pay the landlord, the new renter might still find himself getting evicted.

What to Watch for When Subleasing

There are some common problems when it comes to subleasing. You should address these issues before signing a contract to sublet a place:

• Restrictions in the original lease – The original lease might prohibit subleases.  Get a copy of the original lease and make sure that you or the original renter has authority to sublease.  Otherwise, the landlord can evict everybody.
• Written contract – Come up with a contract in writing establishing the length of the sublease, the rent, the time rent is to be paid, and each party’s rights and obligations (i.e. can the new renter use the grill?).
• Paying rent to the landlord – If at all possible, the new renter should pay  rent directly to the owner/lessor to make sure that rent is being paid.  If that’s not an option, make sure to get receipts from the sublessor proving that they are paying rent in a timely fashion.

Common Differences Between Leases and Subleases:

Leases and subleases come in many shapes and sizes, so to speak.  However, there are some common differences between them.

Leases

• Duration: usually a full year, though three-month, six-month, nine-month, fifteen-month and two-year leases exist
• Price: can be a good or bad deal, depending on the location and type of place
• Furnished: occasionally
• Rent: usually monthly
• One month notice of moving out: some leases will end on a specified date, others roll over, requiring one month notice of intent to move out

Subleases

• Duration: less than full lease, usually between one and six months.
• Price: often cheaper than the rental price in the original lease because the sublessor is desperate to find someone
• Furnished: almost always, though it is the sublessor’s stuff.
• Rent: sometimes paid entirely up front, other times on a monthly basis
• One month notice of moving out: usually not necessary because the sublease has a finite term ending when the renter moves back in.

If you don’t think a sublease is right for you, look into getting a month-to-month lease.

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