|
|
Many people have moved homes or locations during the COVID-19 pandemic. With the ability to work remotely, there is no need to pay sky-high rents.
But, what if you’re locked into a lease for another six months or twelve months? What if you already own a house or condo and don’t want to pay the mortgage while you’re traveling.
You could stay and see the lease through. Or, you could learn how to sublet your place and have those payments taken care of by another person.
Read this simple guide to subletting and learn the step-by-step process to sublet your condo safely.
1. The Difference Between a Sublet and Sublease
Is there a difference between a sublet and a sublease? While most people use these words interchangeably, there are subtle differences between the two words.
A sublease is when you have someone take over an existing lease. In that case, if you’re renting your condo from the owner or a property manager, you would need to sublease your space.
The sublessee (the person holding the sublease) would see out the remaining months of your lease, and if all goes well, they will usually have the option to sign a new lease with the landlord at the end of the term.
In contrast, a sublet is when you rent out the space for a chunk of time. Let’s say that you’re going on a 60-day retreat and plan to return. In this case, you would find someone to pay your rent (or mortgage if you own the property) and take over the space while you’re away.
This is admittedly a small difference, but when inking a legal agreement, you should make sure to use the correct language.
2. Is Subletting Possible?
Your next step is to find out if subletting or subleasing is possible at your location or address. Read through your lease carefully and see if there are any clauses that either authorize or ban it.
If you live in a condo, you’re likely to have a Homeowner’s Association (HOA) as well. HOAs usually have strict rules around subleasing and subletting.
This is especially true in tourist areas because they don’t want the condo building to turn into a hotspot for vacationers. They would much rather have stable homeowners that take care of the property.
You may need to get written approval from the HOA and/or the landlord. The HOA may have additional insurance requirements as well, which you can learn about here.
See what the possibilities are and if subletting is allowed, then proceed to the next steps.
3. Know the Terms of the Sublet
Before you start looking for someone to fill your sublet, you need to think about the terms of the agreement. When does the subletter move in? What are they responsible for? Who pays the utilities? What happens if they don’t pay?
These are all things that you need to think about so you can attract the right person. You don’t want to sign a sublet for your place to realize that you forgot something.
Changing the agreement after the fact is possible, but hard to do.
4. Find a Reliable Tenant
There are a few ways to find a high quality tenant. Start by reaching out to your personal network. There’s a good chance that if an acquaintance of yours recommends someone, that person will be trustworthy.
If that doesn’t work, then post your property online. Places like Craigslist, Zillow, and Facebook are all good options. Make it clear in your rental listing that you are are offering a sublet in the listing.
Next, you’ll want to interview prospective tenants, in person if possible. Invite them to see the space and have them fill out a rental application.
This may be required by your landlord or HOA. When they fill out the application, it is customary to ask for an application fee to cover the cost of the background check. People who fill out an application and pay a deposit are serious about renting the space.
5. Run Background and Credit Checks
For your protection, you should run a background check on potential rental candidates before entering into a legally binding sublet agreement with them. You can get these done for a small fee, usually around $25 to $50 per applicant.
Sites like TurboTenant.com and MyRental.com work fine for running background checks, as do many other sites. Make sure to run a background and credit check for every adult (18+) that will be living within the property during your absence.
You don’t want to rent to people with poor credit scores or bad history. Remember that you’re responsible for the payments if the subletter doesn’t come through.
To adhere to federal Fair Housing Law and regulations, make sure that you have clear (and fair) rental standards that you apply to all potential applicants.
6. Have a Legal Written Agreement
Your final step is to have a written agreement in place. This is a legal agreement that should be reviewed by an attorney. The landlord and HOA may want to see the document as well.
It will spell out the terms of the sublet. Make sure to include all necessary details, no matter how small, such as the allowance or disallowance of pets, timelines, payments, and more.
This document should be signed by you and the sublessee, with copies sent to the HOA and landlord.
7. Have a Backup Plan
Even if you do all of these steps above, there’s no guarantee that your sublessee will follow through with their responsibilities.
There may be issues that you can’t predict. The best you can do is to protect yourself as much as possible.
It’s smart to collect a security deposit up-front, and of course, work with the sublessee to resolve issues if they arise.
How to Sublet a Condo Safely
When preparing to move out of your condo, you’ll want to make sure that you have qualified and responsible renter to take your place.
The worst thing that can happen is that you sublet your space to someone who doesn’t pay the rent or mortgage, because you would be responsible for their non-payment.
Follow these steps on how to sublet your condo (or home), because they’ll save you from most of the common headaches and pitfalls.
Join nearly a million other readers who are learning Cade’s secrets, like how to budget, increase income, invest for cash flow, increase confidence, or lose 10 pounds, fast.