When tenants need to leave their rental property before the end of their lease, they often explore two options: subleasing or reletting. While both involve a third party occupying the property, the legal and financial responsibilities differ significantly. Understanding the difference between subleasing and reletting can help tenants make informed decisions that best suit their needs. In this article, we’ll delve into these two concepts, explaining how they work, their advantages and disadvantages, and what tenants should consider before choosing between them.
What Is Subleasing?
Subleasing, also called subletting, is an arrangement where the original tenant allows another person, known as a subtenant, to occupy the property. However, the original lease agreement between the landlord and the initial tenant remains in place. This means the original tenant retains responsibility for the lease, including rent payments and property maintenance.
How Subleasing Works
- The original tenant remains bound by the terms of the lease.
- The subtenant pays rent to the original tenant, who is responsible for forwarding it to the landlord.
- The subtenant agrees to follow the lease terms, but their primary obligation is to the original tenant, not the landlord.
For instance, if a tenant temporarily moves out for a few months—for reasons such as studying abroad—they might sublet the apartment to someone else during that period. Subleasing allows the tenant to offset their rent obligations without breaking the lease agreement.
Benefits of Subleasing
- Short-Term Solution: Subleasing is ideal for temporary situations, like a brief job relocation or traveling for a semester.
- Retain Lease Control: The original tenant can return to the property when the sublease ends.
- Flexibility in Tenant Choice: The original tenant can choose their subtenant, ensuring compatibility and trust.
Drawbacks of Subleasing
- Legal Responsibility: The original tenant remains liable for unpaid rent or damages caused by the subtenant. If the subtenant defaults on rent, the landlord can pursue the original tenant for the outstanding balance.
- Restricted by Lease Terms: Many lease agreements explicitly prohibit subleasing or require landlord approval. Subleasing without permission can result in legal and financial consequences, including eviction.
- Potential Risks With Subtenants: If the subtenant violates lease terms or causes damage, the landlord may hold the original tenant accountable.
What Is Reletting?
Reletting occurs when the landlord finds a new tenant to take over the lease, releasing the original tenant from all responsibilities. This is also known as lease reassignment. Unlike subleasing, reletting creates a new contract between the landlord and the new tenant, severing any connection to the original leaseholder.
How Reletting Works
- The landlord terminates the original lease agreement.
- A new lease is signed directly between the landlord and the new tenant.
- The original tenant is no longer responsible for rent payments, property maintenance, or any damages after the new lease takes effect.
For example, if a tenant accepts a permanent job transfer to another state and can no longer occupy the apartment, they may request the landlord to relet the property to a new tenant. This allows them to move without the ongoing burden of lease obligations.
Benefits of Reletting
- No Ongoing Responsibility: Once a new lease is signed, the original tenant is free from financial and legal obligations.
- Clean Break: Reletting is ideal for permanent moves where the original tenant does not plan to return.
- Landlord’s Responsibility: The landlord takes charge of finding a new tenant, often saving the original tenant the hassle.
Drawbacks of Reletting
- Rent Obligation Until Relet: The original tenant must continue paying rent until the landlord finds a new tenant, which can sometimes take weeks or months.
- Landlord Control: The original tenant has no say in who the new tenant will be, as the landlord selects the replacement.
- Fees May Apply: Some landlords charge a reletting fee to cover administrative costs.
Subleasing vs. Reletting: Key Differences
While subleasing and reletting may seem similar, they differ in fundamental ways:
| Aspect | Subleasing | Reletting |
| Lease Agreement | The original lease remains in effect, with a sublease agreement added. | A new lease is created between the landlord and the new tenant. |
| Responsibility | The original tenant remains liable for rent and damages. | The original tenant is released from all obligations once the lease is reassigned. |
| Payment Flow | The subtenant pays rent to the original tenant, who then pays the landlord. | The new tenant pays rent directly to the landlord. |
| Landlord Involvement | May require landlord approval; landlord deals primarily with the original tenant. | Fully managed by the landlord; landlord deals directly with the new tenant. |
| Best For | Short-term absences where the tenant intends to return. | Permanent moves where the tenant no longer plans to occupy the property. |
Relet vs Sublet: Legal Considerations
When considering a relet vs sublet option, it is critical to review the terms of your lease agreement. Most leases specify whether subleasing or reletting is allowed and outline any requirements for landlord approval. Some leases may prohibit subleasing entirely, while others impose fees or conditions for reletting.
Landlord Approval for Subleasing
- Many landlords require written consent before tenants can sublet their property.
- Unauthorized subleasing may result in eviction or legal disputes.
Reletting Obligations
- Even if the landlord agrees to relet the property, the original tenant is responsible for paying rent until a new lease is signed.
- Some jurisdictions require landlords to make reasonable efforts to relet the property to minimize the financial burden on the original tenant.
When to Choose Subleasing
Subleasing is a suitable option if:
- You plan to return to the property after a temporary absence.
- Your lease agreement permits subleasing, and you can find a trustworthy subtenant.
- You are willing to accept responsibility for the subtenant’s actions.
When to Choose Reletting
Reletting is the better choice if:
- You are moving permanently and do not intend to return.
- You want to sever all ties with the lease agreement.
- You are willing to pay rent until a new tenant is found.
Relet vs Sublet: Understanding Risks
Both subletting and reletting come with risks. In a sublet vs relet scenario, the key is to evaluate your level of comfort with ongoing responsibility. Subleasing can leave you financially exposed if the subtenant defaults on payments or damages the property. On the other hand, reletting may result in prolonged rent payments while waiting for the landlord to find a new tenant.
Practical Tips for Tenants
- Check Your Lease Agreement: Review the terms and conditions regarding subleasing and reletting. Ensure you understand the approval process and any associated fees.
- Communicate With Your Landlord: Notify your landlord as early as possible if you plan to sublet or relet. Clear communication can prevent misunderstandings.
- Choose Subtenants Carefully: If subleasing, vet your subtenant thoroughly to minimize the risk of financial or legal issues.
- Document Agreements: Create a written sublease agreement outlining the responsibilities of the subtenant.
- Understand Local Laws: State and local regulations may affect your rights and obligations when subletting or reletting.
Conclusion
Subleasing and reletting are viable options for tenants needing to exit their lease early, but they differ significantly in terms of responsibility, risk, and duration. Subleasing is ideal for temporary situations, while reletting offers a clean break for permanent moves. When deciding between sublet vs relet options, carefully consider your lease agreement, landlord’s policies, and personal circumstances.