The Pitfalls of Subletting Your Rental Unit

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Let's say you're two years into a 5-year lease term and you get a new job that requires you to move to a different city. What do you do? Your only options are to either (i) get your landlord to agree to let you out of the lease early (which could be costly), (ii) find someone to take over the balance of the lease through an assignment, or (iii) subletting to another tenant who will rent the place for the balance of the lease term, which means you remain on the lease as the original tenant.

Most leases have a clause that permits assignment or subletting with the consent of the landlord, and this provision usually also states that the landlord cannot unreasonably withhold that consent. This means that the landlord must give their consent if there is no reason not to - for instance, if you can come up with a reputable candidate who can afford to sublease the property.

What are the risks of subletting?

But that same reputable candidate might get you into some legal hot water under the terms of your lease. For instance:

They may have pets (or friends) who cause damage to the rental unit that YOU will then be liable for.
They may have loud parties until all hours and cause trouble with the neighbours, which can end up in an eviction. You would then have to pay the landlord's legal costs to evict the subtenant.
They may fall behind in the rent, and you will be on the hook for it.

How can I limit my risks?

When you assign your lease to a subtenant, you're still responsible for your obligations under the lease unless your landlord releases you from those obligations in writing. And because a sublease is between you and the subtenant (NOT with the landlord), the subtenant has no legal obligation to pay the landlord unless they have agreed in writing to take over your responsibilities under the lease.

To limit your risk:

Only assign or sublet to someone you trust.
If you're assigning the lease, get a release from your landlord.
If you're subletting, collect a security deposit from your subtenant. Find out what the maximum amount allowed by the law is, and what the legal requirements are for holding and returning that deposit.
Always put it in writing. Get your subtenant to sign a Sublease Agreement.