Subletting – Everything you should know

Subletting has advantages and disadvantages. What are they?

Subletting is when someone who has signed a lease for a specific property rents out a property to another person. This means that someone who sublets a property doesn’t own the property in question, but is allowing someone else to take occupancy, usually for extra income. Subletting is legal according to South African common law unless the lease agreement states otherwise.

Subletting, also known as subleasing, doesn’t absolve the initial tenant of the responsibilities of looking after the property just because someone else has occupied it. If a tenant chooses to sublease a property, they will have to create a specific lease agreement (a sublease) between themselves and the third party that will be occupying the premises. This sublease, however, doesn’t dissolve the original lease between the tenant and the landlord. This means that when the lease between the landlord and tenant expires, then the third party will have to leave the premises unless the original lease agreement is renewed.

Bear in mind that in order to sublet, the original lease agreement must not have a clause prohibiting it. Added to that, if you decide to sublet, it’s also important to remember that should the third party you find to occupy the space default on paying rent, you as the sublessor will be liable to pay the arrears. The landlord can also legally sue the sublessor should the lease be breached by the sublessee.

Learn the advantages and disadvantages of subletting:

Advantages of subletting:

● If you happen to relocate due to a new job opportunity or personal reasons, you can find someone to take over the remaining duration of your lease. This means you won’t incur any penalties for breaking your lease, and can perhaps simultaneously make additional income.

● Breaking your lease can affect your rental record, and potentially your credit score. Having someone pay rent for the duration of what would’ve been your stay will help you keep these two factors intact, impacting your future rental and financial prospects positively.

● You will be free to pursue other opportunities while somebody else handles the responsibilities of living in your rental.

Disadvantages of subletting:

● You will have to screen many tenants in order to find the best fit. This is important because you don’t want an unreliable tenant occupying the space as you’ll be liable for any damages or rental arrears. Screening multiple tenants can often feel tedious and laborious and can make finding the perfect tenant difficult.

● You have to market your sublet as a landlord would. This means potentially paying for advertising costs on popular search portals, like Private Property, or on social media, online classifieds, etc.

● There’s no guarantee that the tenant will adhere to the sublease and not damage the property or skip out on paying. This can impact the landlord’s opinion of you and make it difficult for you to rent in the future.

If you’re thinking of subletting your current rental, you need to factor in a number of factors before making such a huge decision. Understand that a sublet agreement will have to be drawn up and you may be liable for any of your sublessees faults.