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Sub - letting the rental property

Discussion in 'Property Management' started by teetotal, 19th Feb, 2016.

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  1. teetotal

    teetotal Well-Known Member

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    If the owner agrees to sub-let a rental property by a tenant, how would the process work??
    What is required from documentation perspective ??
    Any legal issues?
     
  2. thatbum

    thatbum Well-Known Member

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    Such a general question - not even sure if you're talking from the owner's prospective, or from the head tenant...?

    About a million legal issues so you probably need to be a bit more specific. The documentation would probably just be the normal documents, but again its hard to tell what you mean.
     
  3. brettc

    brettc Well-Known Member Business Plus Member

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    There are also implications regarding insurance, most landlord policies are likely to have issues with sublet properties.
     
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  4. teetotal

    teetotal Well-Known Member

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    Was talking from an owners perspective.
     
  5. dabbler

    dabbler Well-Known Member

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    Hi Brett, Does EBM have a problem with this ?

    Teetotal, if allowing sub let, you need to have proper agreement and who is responsible for certain things, who will pay and for what and when, you also have to be happy that someone else controls who will get use of the place most likely, the insurance for building and landlord can be a problem.
     
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  6. D.T.

    D.T. Adelaide Property Manager Business Member

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    Yep - when doing quotes on their website, this is one of the first things it asks about.

    Instead of subletting, you could agree to add the person to the lease. How they split the rent each week is between them.

    Advantages-
    - Keeps property insured
    - Tenant still gets another person in helping them pay
    - Gives another person to after if things turn sour

    Still need to do background checks on the new person though.
     
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  7. brettc

    brettc Well-Known Member Business Plus Member

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    Sorry I forgot to watch this thread and have been snowed under.

    Are you referring to sub-letting where the tenant allows someone else to live there as well as themselves (such as "sublet" a room), or referring to someone leasing the property but then sub-letting it to someone else completely. Such as Fred Bloggs (or more likely Fred Bloggs Pty Ltd) rents the property and is on the lease, but he then sub-lets it to another party, so the person living in the property is not the tenant on the original lease with the landlord).

    The first one is not really an issue as the tenant responsible for the rent is still in the property. The second one though, where party A leases the property but then sublets to party B is where there is a problem. There are a whole range of potential issues raised by this and the reason for the question mentioned by DT which are:
    • Will the property be sublet?

      and

    • There is one lease in place that meets legislative requirements and the persons named on the lease are the same people residing in the property?
     
  8. dabbler

    dabbler Well-Known Member

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    Yes, I was talking about the later, basically that seems only practical if there are also written agreements to be 100% responsible for anything the sub tenant does, then no insurance besides building would be required by an insurer that is ok with this situation.
     
  9. brettc

    brettc Well-Known Member Business Plus Member

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    It's okay for them to be responsible for it but it doesn't mean they will pay it. That's where your issue will be.
     
  10. dabbler

    dabbler Well-Known Member

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    Understand, like you said though, someone with the money to make good, no good with Joe Bloggs.....