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    Subleasing and Lease Assignment: The Ins and Outs

    For those landlords that wish to rent to students but are tentative about offering shorter leases (check out the benefits of short term leases here), allowing the tenant to sublease or lease reassign is a great compromise.

    By placing the option for the tenant to sublease or lease reassign in the original lease agreement allows the tenant to find an alternate sub-tenant to fill the property if they are planning to vacate for an extended time period during the agreed lease dates. This would be perfect for those students that wish to stay at the same property throughout their entire program but do wish to spend time else where during their summer or winter breaks.

    The biggest benefit of allowing a tenant to sublet or lease assignment is that it is still the tenant responsible to cover the rent, either by providing a sub-tenant to enjoy the space or making the rent payments themselves. This means that the student gets some flexibility within the lease, but the landlord need not fret over missing out on a rent payment.

    However, as the term sublease is not defined officially by the Residential Tenancy act, it is often grouped together with lease assignment and additional occupant/roommate when it comes to leasing terms. Also confusion can occur as to what situations qualify as a sublease verse when it is a lease assignment.  To best understand when a situation qualifies for a sublease, take this short quiz below.

    Answer yes or no to the following questions.  A rental unit is sublet when the tenant:

    1.  Moves another person into the rental unit to live with the tenant
    2. Rents a bedroom to another person for their exclusive use.
    3. Temporarily rents the rental unit to someone else while Tenant is in Mexico.
    4. Permanently rents the rental unit to another person as the tenant was transferred to (another city
    5. Rent of the room through Airbnb
    6. A sublet can only happen in a fixed term tenancy (lease). [1]

    How many yeses did you have? Did you spot the lease assignment?

    In reality only 1, maybe 2, of the above situations actually do qualify as a sublease.  Since “A sublease happen when (a) a tenant moved someone else into the rental unit, AND (b) the tenant is absent while that person lives there.”[1] These two conditions must be true for the situation to a true sub-lease.  Also, all sublets must end before the original end date of the tenancy agreement and sublets agreements are made between the tenant and the sub-tenant.  The landlord has not direct contact with the sub-tenant in a sublet agreement.

    Where as a lease assignment is when the current tenant transfers their lease agreement to a new tenant and the original tenant will never be returning to occupy the property again.  Also, in lease assignment, the new tenant does deal with the landlord directly as the old tenant is no longer responsible for the lease or the rent payments.

    Lease assignment is another great option for landlords who wishes to have a bit more control over the replacement tenant and wants to be involved with the re-assignment of the lease agreement. As lease assignments are between the landlord and the new-tenant, the landlord can be involved with the screen process and the final approval of the new tenant.

    By including the option for a sublet or lease assignment in the original lease, it’s an easy way to increase the appeal of your listing. Also, it’s a way to show the tenant you are willing to willing to work with them and will attracted more student renters to your property. Lastly, including the option to sublets and/or lease assignment will decrease the chances that a tenant vacates the property before the lease ends, leaving the landlord in a dispute for the missed rent payments.

    Oh, and for those who need to know how well they did on the quiz, below are the answers.

    1. No; this is an roommate/additional occupant situation.
    2. No; this is an roommate/additional occupant situation.
    3. Yes; the arrangement is temporary and the tenant is not living there. This is a sublet whether or not the tenant is collecting rent from the sub-tenant.
    4. No; this is an assignment of tenancy agreement.
    5. Maybe; this is a roommate/additional occupant situation if the tenant remains in the rental unit. If the tenant leaves while the Airbnb person occupies the unit, it is a sublet, even if for only a few days.
    6. No; while unusual, a month to month tenancy could be sublet. [1]

    For more helpful information specific to landlord check out www.help4landlords.ca, as this website is a great source for landlords’ commonly asked questions about the different intricacies of landlordship.

    [1]Kemp, A. G., & Associates INC. “Issue #35.” Al’s Almanac Issue #35 (01 July 2016): 1-2.  www.help4landlord.ca. Web

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    • Juliedow says:

      Good post! I read your blog often and you always post excellent content. I posted this article on Facebook and my followers like it. Thanks for writing this!

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