What Is a Sublease? How Does a Sublease Work?

What is a sublease? If you think it’s as simple as handing off your lease, think again. Subleasing can be a great solution for both tenants and subtenants, but it comes with rules, responsibilities, and potential risks. 

In this article, we will discuss the basics, legality, and practicalities of subleasing. You will also learn about the advantages of subleasing, the disadvantages of subleasing, and how it compares to other rental arrangements like lease assignment. Understanding carefully the definition of a sublease lays the foundation for avoiding pitfalls, knowing your rights, and completing the process legally and smoothly.   

What Does Subleasing Mean?

Let’s define what a sublease is in the simplest terms: it’s when an existing tenant (the sublessor) rents out all or part of their leased property to a new occupant (the sublessee). The sublessee doesn’t sign a rental contract with the landlord; the contract exists between the original tenant and the newcomer.

The sublease meaning explained involves recognizing three parties: 

• The landlord (who owns the property)
• The sublessor (the original tenant)
• The sublessee (the incoming occupant)

For example, if you have to leave your apartment temporarily, you can find a sublessee to live there and pay rent in your place. You remain responsible to the landlord, but the sublessee takes over occupancy and daily use. 

Subleases come in many forms:

• Partial subleases (only part of the property)
• Full subleases (entire unit)
• Short-term or long-term subleases

When considering alternatives, tenants might also explore a month-to-month lease for more flexible rental periods compared to a fixed-term sublease.

What does subleasing mean in practice? It allows tenants flexibility to exit or share their lease, while maintaining financial responsibility, which is a crucial distinction from relinquishing the lease entirely. Check out our full guide on subletting vs subleasing for more context on these variations.

Is Subleasing Legal?

Is subleasing legal? The short answer is yes. Subleasing is legal in many cases, but the legality of what is a sublease depends on your lease terms, local laws, and landlord approval. 

• Lease Agreement: Many leases have specific clauses about subleasing—some allow it with permission, while others strictly prohibit it. If your lease doesn’t mention subleasing, check with your landlord before proceeding.
• State and Local Laws: Some places provide strong tenant rights subletting, especially in rent-controlled areas where tenants have additional protections. In such places, landlords often must give explicit consent before a tenant can sublease. 

For example, tenants in rent-controlled buildings in New York City have the right to sublease with landlord’s explicit consent, which landlords cannot unreasonably deny (NYC Bar Association guide). Similarly, in San Francisco, tenants can sublet or replace roommates under specific regulations, even if the lease forbids it, but landlord approval is needed for subleasing the entire unit (San Francisco rules).

• Landlord Approval: Even if subleasing is legal in your area, landlords often require approval before a new tenant moves in. They may ask for a background check, proof of income, or a signed sublease agreement.

What happens if you sublease without permission? You could be violating your lease, leading to eviction, fines, or legal trouble. Always review your lease and check local sublet laws before setting up a sublease.

Pros and Cons of Subleasing

Weighing the benefits and risks of the sublease concept gives tenants the flexibility to manage temporary absences without breaking leases while understanding their ongoing responsibilities and potential liabilities.

Pros of Subleasing

• Flexibility for the original tenant: Subleasing is perfect for those facing a temporary absence sublease, such as traveling for work or family reasons. It helps tenants avoid paying for an empty space while maintaining their rental history.
• Lower rent for subtenants: Many subleases are priced below market rent, especially if the original tenant is in a rush to sublet.
• Short-term rental opportunities: Subleases are ideal for people who need a temporary living arrangement, such as students, interns, or remote workers.
• Income generation: If the rent in a sublease is higher than what the original tenant pays, they can make a small profit (if allowed by the lease agreement).

Cons of Subletting

• Risk for the sublessor: The original tenant remains liable for rent and damages. This means eviction risk sublease exists if the sublessee fails to pay or breaches terms, putting both tenant and sublessee at risk.
• Limited legal protection for the sublessee: Since the sublessee does not have a direct agreement with the landlord, they may have fewer rights than a traditional tenant.
• Landlord restrictions: Some landlords prohibit subleasing altogether, and violating this rule could result in eviction or legal action.
• Potential for misunderstandings: Miscommunication between the landlord, sublessor, and sublessee or possible disagreements over a sublease fee or security deposit can lead to disputes over rent, repairs, or lease terms.

Subleasing can be a win-win in the right circumstances, but it requires clear agreements, written contracts, and a good understanding of the risks involved. Our how to collect from tenants guide includes tips on handling payment risks.

Sublessor vs. Sublessee: What’s the Difference?

To truly understand the definition of subleasing, we must distinguish the difference between a sublessor vs sublessee. In a sublease arrangement, two key players are involved:

Who is the sublessor?

The sublessor is the original tenant who is renting out their leased space to someone else. They:

• Remain legally responsible for the original lease agreement.
• Collect rent from the sublessee and continue paying the landlord.
• Are accountable for any damages or lease violations caused by the sublessee.

For instance, if you sign a 12-month lease but need to move after six months, you can become a sublessor by finding someone to take over your space. However, if they miss rent payments or damage the property, you are still responsible.

Who is the sublessee?

The sublessee is the new tenant renting the space from the sublessor. They:

• Pay rent to the sublessor (not the landlord).
• Follow the terms set by both the sublease agreement and the original lease.
• May have fewer legal protections since they don’t have a direct contract with the landlord.

Key Differences from a Traditional Lease

A traditional lease gives tenants a direct relationship with the landlord, while a sublease adds a middle party, which can create complications. For clarity on multiple-party arrangements, see our blog on multiple tenants on a lease.

How Does Subleasing Work? A Step-by-Step Breakdown

Knowing what a sublease is helps you navigate this process with confidence. Let’s find out how subleasing work, step by step:

1. Check Your Lease Agreement: Before anything else, read your lease! Some landlords allow subleasing, some forbid it, and others require written approval. If your lease is unclear, ask your landlord directly.
2. Review Local Laws: Some cities and states have specific rules about subleasing, especially in rent-controlled buildings.
3. Get Landlord Approval: Even if your lease allows subleasing, most landlords prefer to approve the subtenant first. They might require a background check or proof of income.
4. Find a Subtenant: Knowing where to list sublets is crucial for success. List your place on trusted platforms or our tenant background screening system for safety and reliability, and screen potential subtenants carefully to avoid future issues. 
5. Sign a Sublease Agreement: A written contract is a must! It should cover rent payments, responsibilities, and what happens if the subtenant needs to leave early.
6. Handle the Security Deposit: Decide if you’ll collect a deposit from your subtenant to cover damages.
7. Keep Communication Open: Even after your subtenant moves in, stay in touch! Since you’re still responsible for the lease, you’ll want to make sure everything runs smoothly.

For more, LeaseRunner details the entire process in our complete renting and screening guide.

What Should Be Included in a Sublease Agreement?

A good sublease agreement is key to understanding what a sublease is. It helps clarify rent, duration, deposit, fees, rules, and liabilities, protecting all parties. Having a written sublease agreement protects both the sublessor and sublessee. A handshake won’t cut it!

What is a Sublease Agreement?

A sublease agreement definition is a legally binding document between the sublessor and sublessee that outlines all the terms for the rental arrangement. This agreement supplements but does not replace the original lease with the landlord. 

Basic Details to Include

• A sublease agreement should clearly outline the essential information to avoid confusion later.
• Names of the sublessor (original tenant) and sublessee (new tenant).
• Exact address of the rental unit.
• Start and end dates of the sublease.
• Monthly rent amount, due date, and payment method.
• Whether utilities (electricity, internet, etc.) are included or paid separately.
• Information about deposits and fees, including any sublease fee.
• Rules and Responsibilities

Every lease comes with rules, and your sublease should include a section that highlights the key responsibilities of the sublessee.

• A clear statement that the sublessee must follow the original lease terms.
• Who is responsible for maintenance and repairs—the sublessor or the sublessee?
• Any restrictions (e.g., pets, smoking, overnight guests) carried over from the main lease.
• Security Deposit and Damages

Deciding whether or not to collect a security deposit is a personal choice, but it’s always a good idea to specify how it will be handled in the sublease agreement. Reference our deposit guide at renewing a lease agreement for best practices.

The security deposit helps protect you against any potential damages or unpaid rent. Take note of these concerns:

• Whether the sublessor is collecting a security deposit from the sublessee.
• What happens if the sublessee causes damage beyond normal wear and tear.
• How the deposit will be returned at the end of the sublease.

Pro tip: Looking to learn more about security deposit law in your state? Check out our Landlord-Tenant law page.

Tenants’ Responsibilities when Subleasing

Clarifying what is a sublease includes tenant duties. When a tenant embraces a tenant subleasing property, they must uphold full responsibility.

• Paying rent to the landlord in full and on time (even if you are not paid by the sub-tenant)
• Maintaining the condition of the property, and for any damage the subtenant causes
• Following any lease provision regarding noise, maximum occupancy, and pet provisions
• Resolving issues or disagreements with your subtenant 
• Failure to comply with these obligations could cause you to get evicted and/or sued.

Landlord Rights in a Sublease Agreement

Landlords generally keep all the rights under the original lease agreement, including:

• Landlords usually must give landlord consent sublease before approval.
• They ensure subleases meet local laws and lease terms.
• Landlords have landlord responsibilities in sublease such as maintenance and inspections.
• They may impose sublease rental contract requirements to protect their interests.
• The landlord is never a party to the sublease agreement, but is usually allowed to review copies prior to consent. Landlord obligations in a sublease include responsibly maintaining the property and adhering to housing laws.

How to Sublease Successfully?

Knowing what is a sublease means following steps: reviewing lease terms, obtaining landlord consent, listing sublets in appropriate places, screening tenants, drafting agreements, and managing the tenancy. Here is the LeaseRunner five-step guide to how to sublease an apartment:

Step 1: Review your lease terms and obtain your landlord’s consent

Before considering subleasing, check your lease carefully for any clauses on subleasing, including restrictions or fees. Always get your landlord’s permission in writing.

Step 2: Evaluate and vet potential subtenants carefully

Be sure to screen subtenants and collect their background screening and rental history. For a more thorough discussion of screening, utilize tenant screening vs credit monitoring to assess risk and select reliable candidates.

Step 3: Draft a detailed and legally sound sublease agreement

Use an accepted full sublease agreement contract provided from a reliable source, such as LeaseRunner's lease agreement templates. Be sure to cover all legal areas and responsibilities about subleasing in your sublease contract.

Step 4: Oversee and manage the sublease throughout the rental period

You will want to remain involved and responsible for any rent owed, maintenance requests, including repairs, and any communications between you and the subtenant to maintain a good relationship and avoid disputes.

Step 5: Coordinate the end of the sublease and move-out process

Ensure both parties understand move-out procedures, deposit returns, and lease obligations to avoid surprises.

Risks and Red Flags in Subleasing

Subleasing is a flexible option for the tenant, but it has risks that should be well considered. Recognizing risks in the concept of a sublease encourages careful drafting, tenant screening, and communication.

• Financial liability falls on the original tenant if the subtenant stops paying rent or damages the property.
• Both tenant and subtenant face eviction risk if landlord approval is missing or lease terms are violated.
• Confusion between sublease vs lease can cause misunderstandings about rent and responsibility.
• Disputes often arise over rent and deposit in sublease, or sublease fee when agreements lack clarity.
• Knowing the difference between sublease vs assignment is crucial: assignments transfer full lease rights; subleases transfer temporary occupancy only.
• Clear written agreements, thorough tenant screening, and good communication reduce most risks.

Final Thoughts

What is subleasing? It's a powerful way for tenants to keep rental obligations but with flexibility. Subleasing can properly be done to create benefits for tenants and landlords by keeping the property occupied & rent paid. But it is essential that you understand what type of sublease you want to create, sublet legislation in your area, and what rights you have under the respective Agreements to prevent rookie mistakes.

With LeaseRunner, you get reliable resources like sublease agreement templates that are all customizable with tenant screening, legal guides to help you navigate the process. Be sure to have any sublease by the landlord's written consent, and that the terms of any potential sublease arrangement are understood to protect everyone involved.

FAQs

Q1: What Does Subleasing Mean?

Subleasing is when a tenant rents out their rented space to someone else while still remaining responsible for the original lease. The original tenant (sublessor) finds a new tenant (sublessee) to occupy the space, but the lease agreement with the landlord stays intact.

Q2: How Does Subleasing Work?

Subleasing typically starts with a tenant seeking approval from their landlord, as some leases have restrictions on subletting. Once approved, the original tenant and subtenant sign a sublease agreement that details the rent, duration, and responsibilities.

Q3: Can You Make Money by Subleasing?

Yes, it’s possible to make money by subleasing if the rent you charge the subtenant is higher than what you’re paying your landlord. However, you should check your lease agreement first to see if profit from subleasing is allowed.

Q4. Are You Still Responsible If You Sublease?

Yes, even if you sublease, you're not off the hook. As the original tenant, you remain responsible for the lease agreement.

You're also accountable for any damages the subtenant causes. If they break something or leave the place in poor condition, the landlord will likely charge you for repairs, even though you didn’t cause the damage.

In addition, if the sublessee violates the lease terms, like having unauthorized guests or pets, you could face penalties or even eviction. So, while subleasing gives you flexibility, it doesn't free you from your original lease obligations.