What is Subletting?

Subletting is a good option for those who want to move out of their current rental property, or share rental costs with another tenant. Canstar explains what subletting is and how it works.

What is subletting?

Subletting is the practice of a tenant (the original tenant) renting out a property they are currently leasing to another individual, referred to as the subtenant. In this arrangement, the original tenant remains responsible for the lease agreement with the landlord, but they become, in essence, the landlord to the subtenant.

The important thing to understand is that even if the original tenant moves out of the home after subletting it, they are still legally responsible for its upkeep, and for paying the rent on time to the landlord. This is in addition to their own responsibility overseeing the new subletters.

How does subletting work?

Here are the key aspects of subletting:

  1. Original lease agreement: the original tenant has a lease agreement with the landlord, giving them the right to occupy the property
  2. Sublease agreement: the original tenant creates a separate agreement with the subtenant, allowing the subtenant to occupy the property for a specified period
  3. Responsibility: the original tenant remains responsible for fulfilling the terms of the original lease agreement with the landlord. This includes paying rent, adhering to the lease terms, and maintaining the property
  4. Rent payment: the subtenant typically pays rent to the original tenant, who then pays the landlord. The original tenant is responsible for ensuring that the rent is paid to the landlord on time

Note that before subletting, the original tenant usually requires the landlord’s approval, as some leases expressly forbid subletting without consent. The sublease agreement, detailing terms, conditions, and duration, is crucial. The original tenant may also collect a security deposit from the subtenant, maintaining responsibility for addressing potential damages.

Does subletting require a sublease agreement?

If a tenant decides to sublet their rented house or a part of it, they need to enter into a written residential tenancy agreement with the subtenant. If the subletting falls under the jurisdiction of the Residential Tenancies Act, the sub-tenancy agreement, like a regular tenancy, follows the same rules.

However, if the subletting is for holiday purposes, it falls outside the Residential Tenancies Act, and a residential tenancy agreement is not necessary. Nonetheless, the tenant must still obtain the landlord’s consent for the sublet.

In essence, two tenancy agreements coexist for the property simultaneously:

  • The original agreement between the tenant and the landlord
  • The agreement between the tenant and the subtenant (the sub-tenancy)

Is having a flatmate subletting?

Sharing a rental property with a flatmate is not considered subletting, as flatmates share the space and facilities with the tenant.

If a tenant intends to use any part of the rental property for purposes other than residential living, such as for business or temporary holiday accommodation, it’s essential to consult with the landlord. This kind of usage might be viewed as subletting and could lead to insurance complications for both the tenant and the landlord.

Tenants should also be mindful of any clauses in their original lease agreement limiting the number of occupants, and to ensure that the primary use of the rental property aligns with residential purposes.

What happens when the original tenancy ends?

Should the landlord provide notice to terminate the primary tenancy, they can simultaneously issue the same notice to terminate the sub-tenancy.

In the absence of notice to the sub-tenant from the landlord, the sub-tenancy will continue even after the conclusion of the main tenancy. When the primary tenancy concludes, the tenant ceases to be the sub-landlord, and the landlord (either the property owner or manager) assumes the role of the sub-tenancy’s landlord.

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About the author of this page

This report was written by Canstar Content Producer, Caitlin Bingham. Caitlin is an experienced writer whose passion for creativity led her to study communication and journalism. She began her career freelancing as a content writer, before joining the Canstar team.

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