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.
Got a burning legal question? Email email@example.com and we’ll be sure to assist you
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. The firm is the recipient of more than 45 international property law awards. Marlon is current author of PayProp’s rental documentation and preferred rental property attorney to the Institute of Estate Agents South Africa (IEASA), the Rental Housing Tribunal Western Cape and presenter of the Advanced Residential Property Law Seminar endorsed by the University of Cape Town. Marlon has featured on Cape Talk 567 and Property Matters on DStv, contributes as a guest expert to several property publications and was invited by Juta to write a book on rental property law, by LexisNexis Butterworths to edit its forms and precedents on rental property law and, on no less than three occasions, was invited by the Law Society of South Africa to lecture and train candidate attorneys and attorneys on rental property law. Marlon also created the unique Rental Retainer Club, RentDoc and LevyDoc which offers clients affordable legal fees for rental property and sectional title related matters. Marlon is contactable on firstname.lastname@example.org anytime for more information on these services.