Ask a lawyer – Who is the landlord in a sub-let lease?
I have a tenant who has permission from the landlord to sub-let her apartment. If we do a sub-let lease, who is the landlord in this case? Do we take an additional deposit? It is an unmanaged lease, so can we charge another finder’s fee to place the subletting tenant?
The agreement of sub-lease constitutes a separate agreement between the tenant and whomever she contracts with as sub-tenant. The lease is therefore to be drawn up in the tenant’s name (as she assumes the role of landlord, vis-à-vis the sub-tenant). I pause to mention that there will be no contractual nexus whatsoever between the landlord (owner of the property) and the sub-tenant.
It should therefore be borne in mind that the sub-lease cannot confer greater rights to the sub-tenant than those that have been accorded to the tenant herself. For example, if the tenant’s lease is for 12 months, the sub-lease cannot be concluded for a period of 18 months.
Insofar as commission and/or a finder’s fee is concerned, your entitlement to receive such payment will depend on whether the tenant has mandated you to procure a sub-tenant and/or manage the sub-lease on her behalf. If this is the case, then you are entitled to receive payment of commission/a finder’s fee. If, however, the tenant wishes to procure a sub-tenant and manage the sub-lease on her own, you cannot impose upon her election to do so.
Insofar as deposit is concerned, the terms thereof will have to be negotiated and agreed upon between the current tenant and her prospective sub-tenant. The tenant may elect to request a deposit, but ultimately is not required to. My view is that a deposit equivalent to two months’ rental (due under the prospective sub-lease) should be requested.
Furthermore, and in the event of the tenant requiring a deposit to be paid by the prospective sub-tenant, the deposit is to be dealt with and managed in accordance with the provisions of the Rental Housing Act.
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Who is Marlon Shevelew?
Marlon Shevelew is the director of Marlon Shevelew and Associates Inc. a law firm specialising in rental property, contractual, consumer and company law.