Sublease Contract Defined
Sublease contracts, particularly in the State of Texas, are leasing agreements that allow a current tenant to transfer all or part of the leased property to a third party for the remaining duration of the lease term. The original tenant becomes a "sublessor" and the third party becomes a "sublessee". It is similar to a lease agreement but generally only covers a smaller area jof property, such as an individual room, specific office, or limited floor space. For example, if you rent an apartment that has two bedrooms (rooms A & B) and one bathroom, you could sublease room A to a third party since the bathroom is technically shared and room B is already a bedroom.
As a sublessor in Texas, you are still considered the "tenant" and you maintain the legal relationship with the landlord or property owner . The sublessee becomes a third party to the contract, and is generally not authorized to enter into a rental contract with the landlord directly unless explicitly spelled out in the original lease. However, if the landlord allows or knows that the contract exists it is generally valid.
Subleasing is a common solution when a tenant moves for a short period of time for work. For example, you may have a job that requires working in a different city for three months. Rather than pay for your apartment while you are gone, you could sublet your apartment in Texas to a third party to save money. Conversely, subleasing is also a solution for third parties who want to rent short-term (i.e. more than a few days, but not long-term) for a lower rate. This also explains why Airbnb rentals and websites like VRBO were able to succeed. Colloquially, AirBnB rental agreements can be considered a type of short-term sublease.
The Legal Requirements of Subleasing in Texas
In Texas, subleases are generally permissible unless a lease provision prohibits them. To enforce a lease provision that prohibits subleasing, a landlord must show that it had good reason to prohibit subleasing.
Subleases are contracts—sublessors and sublessees should be sure to include the necessary terms and conditions of their agreement. Several provisions should always be included in a sublease: the name of the sublessor and sublessee; the names of anyone who resides in the property that isn’t the sublessor or sublessee; the address of the property to be sublet; the rent payment amount, frequency, and due date; and the start and end dates of the sublease. It is also a good idea to state that parties must comply with the underlying lease or your landlords rules.
If a lease does not specifically prohibit subleases, sublessors (or tenants) can sublease without their landlord’s permission.
In Texas, sublessors are responsible for their subtenants’ rent. However, this responsibility does not extend to future unpaid rent. Because a sublessor is not liable for any missed payments once a sublease ends, it is generally best for all parties if the sublease period is as short as possible.
Key Elements of a Texas Lease for Sublease
When drafting a sublease agreement in Texas, there are several critical components that must be included. The sublease agreement would contain the actual address of the property or portion of the property to be occupied by the subtenant, the rental duration, starting and ending dates, security deposit required, amount of rent and the due date of rent, payment methods, the names of the parties involved, both the sublesser (existing tenant) and subtenant, rules and regulations of the property, and parking availability. For the apartment complex or rental unit, it is a good idea for the sublease to require the subtenant to comply with the terms of the original residential lease agreement between the sublessee and the landlord or landlord’s agent.
In addition to those provisions, it is often in the best interest of both the lessor and lessee to require the consideration of different events that may result in default and/or termination. One such consideration would be if the subtenant vacates the property early. Who remains responsible for the remaining rent and damages, if any? On the other hand, what if the original lessee at some point subleases out a portion of the rental unit to other potential subtenants?
A separate consideration should address the remaining balance of rent due once the subtenant moves out. The sublessee usually requires a non-refundable down payment or fee prior to moving in for damages on the apartment complex or rental unit. These fee and estimated costs should be discussed and defined prior to the subtenant moving into the property and should specify that the subtenant will be responsible for paying those costs and any remaining balance of rent or fees when the subtenant vacates the rental unit. Other items that should require approval prior to moving in may include whether or not the subtenant may be charged for utilities, smoking in the apartment complex/rental unit, pet "riding" fees, and any other miscellaneous fees not defined in the original lease agreement.
Sublessor and Sublessee Rights and Responsibilities
Responsibilities of Sublessor and Sublessee
Within the framework of a Texas sublease contract, the sublessor maintains generally the same rights and obligations as the original lessor. The sublessor must deliver property in good condition and repair to the sublessee for the duration of the sublease. If the sublessor intervenes in the maintenance of the property during the sublease, liability for any issues caused by the intervention may be assumed by the sublessor. While the sublessor is responsible for maintaining the property, the sublessee must also carry out its responsibilities. Maintenance of property that is subject to normal wear and tear is incumbent upon the sublessor while maintenance of property that is subject to damage beyond normal use is the responsibility of the sublessee. Other payments are generally required during the period of the sublease. If property taxes are not justly divided between the parties, the sublessee may be responsible for covering the property’s pro-rata share of the taxes during the length of the sublease. It can also be expected of the sublessee that it maintains insurance coverage for the property during the term of the lease.
Ways to Legally Sublease in Texas
Subleasing isn’t quite as straightforward as a regular renting agreement. As the tenant to the property, you can’t just find someone and move them in without first getting the permission of the landlord.
The first step is to read the tenant’s lease with the landlord carefully. The vast majority of leases require subleases or subletting to be approved by the landlord. Read the sublease section and follow those procedures carefully.
If the name of the landlord is not on the lease, you may need to contact a property management company, real estate agent, or other contact person dedicated to processing subleases. The key, however, is to get permission from the landlord before taking any further steps.
Once you have permission from the landlord, begin the process of selecting a suitable subtenant. Check the prospective tenant’s references with previous landlords, employers, and character references . If your credit score is not high, you may consider having the subtenant co-sign the lease with you, although Texas law suggests that subletting is an option whether approved by the landlord or not.
Before moving forward with a sublease contract, both parties should carefully read the legal implications of a sublease. Texas law states that subtenants of a lease do not have the same rights as the original tenant, unless otherwise stated.
Once the sublease is agreed to, in writing, and signed, the primary tenant, landlord, and subtenant should all have copies. The primary tenant should also keep their copy in a safe place and do a thorough walk-through with the subtenant to avoid any disputes at the end of the lease period.
Finally, collect rent and ensure the rent is passed on to the landlord in a timely manner. Keeping clear, accurate, and detailed records of the transaction can help prevent future disputes.
Common Sublease Issues and How to Fix Them
It is the nature of the world as we know it that problems will arise. These issues are no different within the realm of subleasing a second party’s business. The best way to go about resolving issues with a sublease in Texas is through the actual contractual language that binds the parties. If you signed a contract that provides two weeks’ notice to terminate, the only way to beat the system is to pay rent for two weeks and leave. The second party to the contract will not be able to hold you to a higher notice period if none was included in the original contract. Typically, any time there is a dispute over a sublease contract, one party will argue that the other party has not broken a contract, and the second party will argue that the first party has broken a contract. The best advice to follow for avoiding litigation in such scenarios is to follow everything that is laid out in your lease.
One issue that comes up with subleasing in Texas is non-payment. Non-payment is obviously an issue in any landlord-tenant agreement. If you sign a sublease agreement with a second party for their business, you must be sure to follow the terms of the lease. If the lease states that rent must be paid on the first of every month, you have to pay rent on the first of every month. If you sign a contract that says you have to deliver notice on a certain day every month, you have to deliver notice each month to your notice address on that day. If you do neither of these things, the owner of the property is likely to kick you out. So, sign a lease that will keep you around.
Damage to the real property is another issue that comes up in subleasing situations. If damage occurs because of your business, you need to pay for that damage. If no damage occurred, you should not have to pay anything to repair the property. Remember to read your lease all the way through before signing it so that you are aware of any scenarios that might land you in trouble.
Sublease vs Lease Break Texas
Subleasing and Breaking a Lease: Exploring the Differences and Similarities
While there are some similarities, subleasing and breaking a lease are two different things in Texas. Here’s how:
Subleasing
Subleasing means that the tenant transfers all of their interest in the apartment, without any liability for the rent or damages that occur after the lease is signed. Essentially, the sublease allows the prior tenant to get out of the lease even if the landlord refuses to release them.
The sublease is for a specific part of the lease only, even if it is only a few days. The prior tenant (sublessor) pays the rent to the landlord for the period. Then the sublease only terminates at the end of that time (unless the landlord lets it extend longer).
The sublessor successfully discharged his/her liability for the rent and was able to get out of the lease.
Breaking the Lease
If a tenant who has not paid rent breaks the lease, they still remain responsible for paying rent that is due under the lease, unless the landlord agrees to let the tenant go. It does not matter what the tenant calls the notice. It can be called a sublease, or a request to terminate, or just a notice. The bottom line is that the tenant no longer wants to be bound by the lease and formally notifies the landlord. (This is an attempt to discharge the liability.)
Since the lease still exists, the tenant is responsible for paying rent until it is paid in full, unless the landlord agrees otherwise.
Breaking a lease is not a good idea.
A Better Option
Under 92.016 of the Texas Residential Tenant Law, if a tenant asks for a sublease or termination, the landlord has 7 days to respond in writing with an agreement to do so (or its reasons for refusing).
The tenant can deliver the request for a sublease or a termination to the landlord, and if the landlord fails to respond by mail within 7 days, the tenant is discharged and it’s as if the tenant departed on the date of the notice.
Most landlords are reasonable and allow their tenants to leave. If they don’t in 7 days, the tenant is free of all obligations for the time after the notice was sent or delivered.
How to Successfully Sublease in Texas
Opting to sublease can be a great decision provided that you go into it armed with the necessary knowledge and a good understanding of the process. The following are some tips to ensure that the subletting process goes smoothly: If there is a sublease agreement in place, take the time to review its terms carefully prior to signing the agreement. Make sure that the sublease contract has the sign-off of the landlord, and if your landlord will not sign off on the sublease, that you have written documentation of that fact. If you are the tenant seeking to sublet your apartment, don’t just let your subtenant move in without the proper documentation; you want a legal record of the arrangement that you can refer back to in the future, and that your landlord can consult as well. Don’t hand over the keys to your apartment until you are certain that the sublease contract has been signed by your landlord and subtenant . Make sure that you get the security deposit that you are owed from your landlord before handing over the keys of your apartment to your subtenant; your landlord will not return the security deposit unless you first send them a notice stating that you have sublet your apartment. It’s always a good idea to take photos of the apartment right before moving and after moving out. You may be able to gain access to the physical unit prior to the move and take photos of all the rooms including closets, nooks and crannies. Take pictures of the interior of all cabinets and drawers, bathroom vanities, and appliances, including the refrigerator, dishwasher, washer, dryer, oven, stovetop and microwave if any. Backup all photos and store them on your phone, email and on a jump drive. If there are any photos missing of an area, it is always advisable to send an email to your subtenant requesting additional photos of the area in question.