Free Sublease Agreement

You are certainly not required to rent the property to the first person who expresses an interest in the rental unit. However, your reason for refusing to rent must be based on a permissible factor. (The purpose of the rental application process is to determine, through permissible factors, whether a prospective tenant is acceptable.)

You must not discriminate against an applicant on the basis of an illegal criteria: race, color, religion, sex, national origin, age or disability. Such discrimination, IF IT IS THE SOLE BASIS FOR YOUR REFUSAL TO RENT, is illegal throughout the United States. You may call the U.S. Department of Housing and Urban Development (HUD) at 1-800-669-9777 or www.hud.gov/complaints/housediscrim.cfm to ask questions about discrimination.

Additional Classes of Protection from Discrimination
State laws and/or local ordinances may establish additional characteristics which are protected from discrimination, such as marital status, sexual orientation, source of income, family responsibilities, or student status. Call your state's consumer protection office or the local department of housing to determine if any of these characteristics are protected in your locale.

Establish your Standards
You MAY discriminate based on a tenant's ability to pay, whether the Tenant has pets or waterbeds, the number of occupants, or the Tenant's honesty and permanence, as long as these criteria are applied uniformly to all applicants. Establish your standards for a particular rental unit in advance. For example, you may decide that the Tenant must meet all of the following criteria:

Gross income: At least four times rental amount

Employment: At least six months in current position

Credit: No negative reports

Rent: No late payments to prior landlord

Pets: None

Smoking: No

Waterbed: One queen size or less

Vehicles: Two or less

References: Two good personal references

Occupants: Three or less

Permanency: At least one year in each of the last two rental units

Appearance: Clean; average apparel

This program allows a Tenant to sublet rental property to a "Subtenant" under the same terms as the underlying lease (the "Prime Lease"). The Sublease will provide that the Subtenant will be bound to all of the terms and conditions of the Prime Lease as if the Subtenant had signed the Prime Lease as the original tenant. Therefore, it is very important that the Subtenant read the Prime Lease carefully. If the Subtenant objects to any term or condition of the Prime Lease, this document should not be used. Instead, if the Tenant is able and willing to vary the terms for the Subtenant, consult an attorney who can prepare a more flexible document.

Landlords are naturally reluctant to permit the tenant to sublet the property to an unknown subtenant who might fail to make sublease payments or who might cause damage to the property. Most landlords therefore prohibit the tenant from subletting the property to another person unless the landlord consents. This allows the landlord to evaluate the desirability of the proposed subtenant before allowing the subtenant to take possession of the property.

The Prime Lease (the original lease between the Landlord and the Tenant) should be carefully reviewed to determine if (i) the lease allows subletting or assignments, and/or (ii) the Landlord's written consent is required.

If the Landlord has already signed, or will sign, a separate instrument providing the consent, that instrument should be attached to the Sublease. Otherwise, the Landlord should sign the consent provision in the Sublease.

Including the legal description in the Lease identifies the exact real estate that is the subject of the Lease. For residential property it may be adequate to use a street address and/or apartment number to identify the property. For Commercial Leases, however, it may be more important to include an accurate legal description.

The legal description can be found in the legal documents (perhaps a deed or mortgage) signed when the property was purchased. The legal description may also be available from the local taxing authority responsible for real estate tax assessment and collection. Some legal descriptions are too lengthy for the space provided by this program. If that is the case, a copy of the legal description can be attached to the Sublease agreement as an exhibit. The legal description should be entered EXACTLY as it appears on the deed or other legal document.

The current mailing address of each party should be entered, and each party should provide notice to the other parties whenever there is a change in the address. If one party will send notice regarding a default by another party, the third party should also receive a copy. For example, if the Subtenant fails to move out when the lease terminates, the Landlord should send the appropriate notice to both the Tenant and the Subtenant.

As a Tenant, there are a number of ways you can protect your security deposit:

1. Get a receipt for the deposit when it is delivered to the Landlord. The receipt should specify that it is for a rental deposit, and it should state the amount and the date that it was received.

2. Prepare an inspection checklist describing any damage or deterioration that exists before you move into the premises. If possible, the Landlord should help you make the checklist so that both parties can agree to the content of the list. It is also advisable to have another person present as a witness. It is best if the checklist is signed by both the Tenant and the Landlord (or the Landlord's agent, if the Landlord is not available). Both the Landlord and Tenant should keep a copy of the checklist for their records. When you move out, you can compare the condition of the premises to its condition when you moved in. Photographs of the premises, taken before you move in, are also helpful to document conditions.

3. Inform the Landlord immediately of damages which occur while you are renting the premises. If possible, do this in writing. Explain fully the cause of the damages.

4. Give the proper advance written notice of your intent to move out, as specified in your rental agreement or by law. Also, when you do move out, leave your forwarding address with your Landlord and in this written communication, ask for an accounting/return of your security deposit.

5. Leave the premises in the same or better condition as it was when you moved in. Normal wear and tear is expected and need not be restored. No charges should be made against your security deposit for normal wear and tear.

6. Arrange a meeting with the Landlord at the time you move out. Go through the inspection checklist that you made when you moved into the premises. Ask the Landlord whether you are going to be charged for any damages or cleaning so that you can take appropriate action before you leave. If the Landlord can offer no valid reason for keeping part or all of the deposit, ask to get the deposit back at this meeting.

There are two possibilities regarding the Tenant's continuing obligations under the Prime Lease during the subletting period. Most often, even if the Landlord consents to the sublease, the Landlord will continue to hold the Tenant ultimately responsible to the Landlord for any defaults by the Subtenant. For example, if the Subtenant fails to make a rental payment, the Tenant would still owe the payment (due under the Prime Lease) to the Landlord. The Tenant, not the Landlord, will have to collect the rent from the Subtenant.

In contrast, some Landlords are willing to completely release the Tenant from any further obligations, allowing the Subtenant to take the place of the Tenant as if the Subtenant were the original tenant. In these circumstances (legally referred to as an "assignment"), the Landlord can pursue only the Subtenant (for example, if the Subtenant fails to make a payment). Obviously, most landlords prefer to have two separate parties responsible, and therefore are usually reluctant to release the Tenant. But if the Landlord is willing to do so, the Landlord must sign the release clause of this Sublease.

If the Landlord will not release the Tenant, it is generally preferable to have the Subtenant send the sublease payments to the Tenant who will in turn pay the Landlord. This allows the Tenant to monitor the performance of the Subtenant. However, if the Tenant will be released from the Prime Lease (and the Sublease payment terms are identical to those of the Prime Lease), the Subtenant can be instructed to send payments directly to the Landlord.

After the Tenant moves out, the Landlord is usually allowed to charge the expense of any necessary cleaning or repair of damages against the Tenant's security deposit. Depending on individual state law, the Landlord must, within a specified number of days ranging from 14 to 30, either return the entire deposit, or provide a partial return along with a written accounting of the amount withheld. However, in order for the Tenant to benefit from these Landlord requirements, the Tenant should provide the Landlord with written notice of the Tenant's forwarding address. If the Tenant fails to do so, the Landlord should nevertheless mail the deposit or the accounting to the Tenant's "last known address" (the rental property). Either the post office will forward the parcel to the Tenant, or else return it to the Landlord, which postmarked envelope is the Landlord's proof of making the attempt.

In addition, five states -- Florida, Georgia, Kentucky, Michigan and Tennessee -- require the Landlord to notify the Tenant of any proposed deductions within a specified number of days -- ranging from 3 to 30 -- after the lease terminates. The Tenant then has the right to inspect the property to verify the legitimacy of the proposed deductions.

A security deposit is an amount of money given to the Landlord by the Tenant that can be used by the Landlord to offset unpaid rental payments due to a default or premature vacation by the Tenant, as well as for necessary repairs and cleaning. Most states limit the amount that can be collected to one or two months' rent. This cap may differ depending on the type of lease (more can be collected for a long-term lease, where the property is furnished, or where the Tenant will have a pet or waterbed, etc.).

In addition, some states require that the security deposit be retained in a separate account, and sometimes, in an interest-bearing account. A few states require that the Landlord inform the Tenant of the name of the banking institution where the funds will be held.

It is recommended that you not accept a personal check for the security deposit or the first month's rent. Instead, you should require cash, money order or cashier's check. The reason is because once the Tenant moves in (even a "few things"), you must go through the expensive and time-consuming eviction procedure to have the Tenant involuntarily removed. If the Tenant's initial check bounces, you have nothing with which to offset these costs.

1. The Residential Real Estate Sublease must be signed by both the Tenant and the Subtenant.

2. If the property was built prior to 1978, the Tenant and the Subtenants must also sign the Disclosure of Lead-Based Paint. If an Agent is involved in the Sublease, the Agent is also required to sign the Disclosure. Tenants must also give the Subtenants the Environmental Protection Agency's pamphlet entitled "Protect Your Family From Lead In Your Home."

3. Some states require that if the Sublease exceeds a specified number of years, it must be recorded in the public records, which, in turn, usually requires that the document be notarized. If the original term of the Sublease will extend beyond one year, review the specific requirements of your state in order to determine the need to notarize and/or record the Sublease.

4. All parties should retain a copy of the signed Sublease and place them in a secure location. The Tenant is required by federal law to keep the signed Lead-Based Paint Disclosure statement for a minimum of three years. All parties should also keep a copy of the inspection checklist, at least until the Subtenant moves out, so that the condition of the premises at check-out can be compared to the condition at check-in.

5. If the Landlord has already consented to the Sublease in writing, a copy of the consent should be attached to the Sublease as an exhibit. If the Landlord has not yet consented and such consent is required by the terms of the Prime Lease, the Landlord must sign the Sublease in order for it to be effective.

6. If the Landlord is willing to release the Tenant from further obligations under the Prime Lease, the Landlord MUST also sign the Release clause.

A real estate Sublease is a document that specifies the rights and obligations of an existing Tenant and another person ("Subtenant") who desires to sublet certain property. The underlying lease between the Tenant and the Landlord is referred to as the "Prime Lease." The original Landlord will continue to be referred to as the "Landlord" in the sublease. After signing the sublease and obtaining any necessary Landlord consent, the Subtenant is entitled to possession of the property for the duration of the sublease, which is often the full remaining term of the Prime Lease. The Subtenant "steps into the shoes of" the Tenant.

This program provides a simple sublease that should be used only when the Subtenant agrees to be bound by nearly all of the original terms of the Prime Lease. A copy of the Prime Lease must be attached to the sublease. Some flexibility is allowed with regard to the sublease payments and/or the term of the sublease. However if the parties expect to modify other provisions from the Prime Lease, this document should not be used. In that event, you should consult an attorney who can prepare a more flexible document.

A WRITTEN sublease should be used whenever property is sublet, in order to reduce misunderstandings between the Tenant, the Subtenant and the Landlord.

The amount of the Sublease rental payments may, but need not match those under the Prime Lease. For example, if the Tenant had negotiated an advantageous rent, he or she may be able to sublet the property for a higher rent. In contrast, in a depressed market, the Tenant may have to accept a lesser rent just to be able to get the property sublet. In that event, of course, the remaining difference will have to be contributed by the Tenant.

Furthermore, the terms of payment may vary between those in the Prime Lease and those agreed to in the Sublease. For example, the Landlord may require the Tenant to pay the rent every other month, while the Subtenant prefers to pay every month. This Sublease can be drafted to allow for these differences, in order to accommodate the Subtenant, but the payments due to the Landlord under the Prime Lease remain unchanged and must be paid in accordance with those terms.

The "term" of the Sublease refers to its duration, which is the time period during which the Subtenant can occupy the property. Often the term of the Sublease will be for the full remaining term of the Prime Lease. However, if the Tenant intends to return to the property prior to the end of the Prime Lease term (for example, a college student who will be gone for the summer), the Sublease can be drafted to terminate on an earlier date.