What Is a Sublease?

Sublease is a term used in the real estate and business world to describe an agreement between two parties that allows for one party to transfer rights and obligations of a lease to another party. This arrangement is often used when a tenant wants to get out of their lease agreement with their landlord but still have a tenant in the property.

In a sublease, the original tenant (referred to as the “sublessor”) retains rights and obligations under their lease with the landlord but partially transfers those tenancy rights and obligations to a third-party (referred to as the “sublessee”). This allows the sublessee to become the new tenant for a specified period of time or for the remainder of the term of the original lease.

For example, if a student rented an apartment and needed to leave for an internship halfway through their lease, they could seek a sublessee to take over the rest of their lease. The student would be classified as the sublessor and would be transferring the rest of their rights and obligations over to the sublessee. The sublessee would become responsible for the duties of the tenant such as rent payments and maintenance of the property. The student would then be relieved of all tenant obligations and can go explore their new opportunity without having to worry about their future lease obligations.

Key Benefits of Subleasing

The key benefits of subleasing for the tenant include the following:

• The tenant can avoid a costly lease termination fee by transferring their obligations to a sublessee.
• The tenant can move away from their current residence without having to worry about the possibility of a landlord suing them for unpaid rent.
• The tenant can receive rental income from the sublessee during the remainder of their lease.

Summary

Subleasing is a great way for tenants to get out of their current lease agreement without facing a hefty termination penalty, while still receiving rental income from the new tenant and having peace of mind that their previous obligations are taken care of. College students should be aware of this option if they need to suddenly take a break from their current residence prior to completing the lease.