Want to sublet your rental property but don’t know where to begin?
Many tenants find themselves unsure about how to create a subletting agreement that is legally binding and thorough. Whether you’re choosing to sublet out of necessity or to maximise your income, this Rental Sublease Agreement Template can help.
It walks you through each of the details you need to include and automatically generates a Word/PDF sublease template for immediate use.
If you’d like to understand what to include, when to use a subleasing agreement and what it involves – keep on reading. Our handy guide explains everything you need to know.
What is a residential sublease agreement?
A sublease agreement is formed between a residential tenant and a subtenant. This happens when the tenant is permitted to do so under their tenancy agreement with their landlord and in view of their permission.
While the landlord and main property lease are always kept in view, the agreement to sublet is formed specifically between the tenant and subtenant only. This agreement works exactly like a normal tenancy agreement. Essentially, it outlines the rights, responsibilities, liabilities and terms between the two parties.
That way, if a disagreement arises, it can be formally resolved according to the terms of the sub-lease contract, protecting all the parties involved under the law.
Rules for subletting rental property
Tenants can’t just sublet property without their landlord’s permission. There are two circumstances where residential subletting is allowed.
First, there may be a subletting clause in the contract that allows the tenant to create a sublease. Second, it might not be mentioned explicitly (or banned), but the tenant can ask the landlord for permission to sublet the property anyway.
You will need to bear this in mind before creating a subleasing agreement. Some landlords have buy-to-let mortgage arrangements which explicitly ban subletting, so it may not be in their power to allow it.
Secondly, the sublease must overlap with the original lease term (and not overshoot it). The agreement can’t allow for the subtenant to stay on after the lease with the main tenant has ended.
Why create an agreement to sublet?
There are several reasons. The main reason is to formalise the relationship between tenant and subtenant under contract.
Subletting agreements arise under several circumstances. For example, the tenant might have been subletting without the landlord’s agreement, and upon finding out, the landlord has insisted that a subletting agreement be created.
Here are some common reasons:
- Financial benefit or relief – As a tenant, you might struggle to pay the rent, or simple want to make some extra profit on the side. If the landlord allows this practice, it is a good opportunity to capitalise on.
- Temporary absence – If you’re leaving the country for a while – either on holiday or a business trip – you may want to sublet the property to recoup the cost of rent while you are away. It also saves you from breaking the lease.
- Spare space – If you’re renting too much space (e.g. extra bedroom), you might as well make use of it. This can offset the cost of a larger property and be occupied by a subtenant.
- To avoid breaking the lease – If a tenant wants to break their lease early and leave (but doesn’t want the penalty), then they might want to sublet their spot to a subtenant to take their place.
- Emergencies & change of circumstance – Job relocation, a new relationship, or a family emergency might require the tenant to live elsewhere. Subletting can fill the gap in the meantime.
What must a residential subletting agreement include?
While agreements will always differ in the details, there are some key pieces of information that every subletting tenancy agreement should include. We outline the most important details below, which you need to consider as you craft your agreement.
- Basic contact information – for example, full names and contact details of the sublandlord and subtenant. The full address of the property also needs to be included.
- Tenancy details – the term of the agreement to sublet must be set out clearly, along with start and end dates. Additionally, the contract should outline the monthly rent payable, and when it should be paid to the tenant (along with the method).
- Security deposit – if the tenant wants to propose a security deposit, they must put it in the contract and outline how it will be protected (in a government approved TDS scheme), and how it will be returned to the subtenant.
- Rights & responsibilities – for example, there should be a clause stating that the tenant and subtenant agree to follow the terms of the original tenancy agreement (which they should be given access to). It should also include what the subtenant is responsible for while they inhabit the property.
- Property use & prohibitions – the contract should specify how the property can be used and any restrictions placed upon the subtenant, such as not subletting further, smoking, or keeping pets.
- Maintenance & repairs – the subletting agreement needs to outline who is responsible for repairs to the property as well as its upkeep.
- Termination clause – as with a full tenancy agreement, the sublease must outline the required notice to end the sublet by either party, as well as consequences for violating terms.
- Legal compliance – there must be written consent that the landlord has consented to the sublet (if required by the original tenancy agreement).
- Additional & optional sublease terms – Who is responsible for paying for gas, electricity, water, internet, etc. There might also be a list of furniture or appliances provided and their condition, and any rules about hosting guests.
Problems & challenges with subletting
Forming a subletting agreement is not without risks for the landlord, tenant and subtenant. While the arrangement can be convenient and profitable for all involved, it also comes with particular challenges.
For the tenant…The tenant takes on the role of ‘sublandlord’, which includes many of the responsibilities but fewer of the benefits of being a landlord. They are responsible for the conduct of their subtenant, and need to ensure that they themselves are adhering both the sublease, and the agreement they have with their landlord.
And like with any rental scenario, it is possible the subtenant fails to pay rent or misses the due date, creating a complicated situation for everyone involved.
For the subtenant…While subletting may be highly convenient for the subtenant, and possibly come with a discount, it also has downsides.
They have to go through two people to address issues in the property (potentially), they also have fewer rights, a more insecure tenancy – and there is always the possibility that the overall landlord will choose to end the main tenancy lease.
Frequently asked questions – Sublease residential agreements
You may have questions about agreements to sublet a residential property. We aim to answer some of the key questions that arise for tenants.
- 1. Is subletting legal?
Yes. This will depend upon the rental agreement and the landlord’s consent, but it is allowed by law in principle. Many people across the UK choose to sublet and do so legally under a subleasing agreement.
- 2. What’s the difference between taking on a lodger and subtenant?
The key difference is the fact that a lodger occupies the property alongside the landlord, who is the owner of the property. They do this under different terms, often as an ‘excluded occupier’.
Subleases are an agreement formed between the tenant and subtenant, who occupy a property owned by the landlord – who does not live there.
- 3. What terms from my original lease agreement must the subtenant follow?
The subtenant generally needs to follow all terms from the original agreement. These include things like pet prohibitions, the use of the property and smoking restrictions (for example)
Subtenants need to allow access for inspections and, of course, follow any prohibitions on subletting or illegal activity. Essentially, the subtenant is bound by the same rules as the tenant to ensure the property is used correctly.
Feel confident about making a residential sublease agreement (UK)?
Hopefully, we’ve given you a clearer picture of a sublet agreement and how it works, and now you’re ready to create one. And don’t worry—even if you’re shaky on the details, this FREE Residential Sublease Agreement Template will guide you through every step of the process.