Subletting: Good or Bad for Landlords?

• August 10, 2016
• Landlord Law

When drafting a lease agreement, landlords sometimes wonder whether they should include a cause that expressly forbids tenants from subletting their rentals. If you prohibit subletting, you may be able to avoid some complicated legal issues, but there are a few reasons subletting could be beneficial for landlords. Read on to find out more about the pros and cons of subletting.

Travel Considerations

If tenants travel frequently, subletting can help ensure your property doesn’t lie vacant for weeks at a time. Plus, some landlords see an opportunity to earn extra income by allowing tenants to sublet. The San Francisco Chronicle featured a story about tenant-landlord clashes over subletting. Some landlords evicted tenants for subletting their apartments through the travel site Airbnb, but at least one landlord saw an opportunity to earn more income, offering tenants the ability to sublet, for a 20 percent share of the Airbnb rental cost. Airbnb offers Host Protection Insurance free of charge for hosts and landlords. These policies protect against liability claims up to $1 million for bodily injury or property damage, so renters’ or homeowners’ policies would not pay on such claims, unless actual damages exceeded $1 million.

Gaps in Tenancy

Occasionally, a tenant may ask to terminate a lease early. Under Maryland law, landlords must attempt to find new tenants as quickly as possible, and the departing tenant would owe rent only for the actual time the property was vacant. These situations can present logistical headaches for landlords, especially if a landlord is unprepared to start searching for tenants. But a tenant who finds a short-term renter to sublet the property could alleviate some pressure on landlords.

Tenant Responsibility

If you allow a tenant to sublet, the tenant is responsible for finding and screening occupants. Tenants may not always have the best judgment – they may, for example, sublet to a friend, even if that person has a shaky job history and earns barely enough income to afford the rent. When a person subletting a property fails to pay rent or violates terms of the initial lease, the tenant is liable for any money owed for past-due rent or damages exceeding the amount of the initial deposit. But landlords may find themselves in the unenviable position of evicting both the tenant and the subrenter, if neither can pay the money owed.

Clarity of Sub-Lease Agreements

When a lease does permit subletting, detailed terms of such an agreement should be included. For example, you may specify that the tenant is responsible for clean-up and associated costs after a subtenant leaves and require the tenant to notify neighbors before a subtenant moves in. A tenant may sublet a rental if no clause in the lease forbids it. If the lease requires tenants to receive permission before subletting a property, landlords may not unreasonably withhold approval of a subtenant. Reasonable objections could include a subtenant’s lack of income, criminal history or a concern the subtenant intends to use the property for purposes forbidden in the initial lease. Ultimately, some landlords decide the risks associated with subletting outweigh the potential gains. Whatever you decide, make sure your lease clearly outlines the rights and responsibilities of your tenants. Lusk Law, LLC, specializes in assisting landlords, helping to avoid litigation when possible, and we’re ready to actively represent our clients in court when litigation is necessary. Our experienced attorneys have provided legal counsel and representation to landlords in Frederick County, Howard County, Baltimore County, Baltimore City, Carroll County, Washington County, and Anne Arundel County, and other counties in Maryland. If you need a consultation about your legal rights, please call us at 443-535-9715 or fill out our contact form.