During the busy season, it’s a good idea to review your lease agreements. One clause that has become more important in recent years is a clause about subletting. With the growing popularity of crowd sourced vacation rentals through websites like AirBnb, FlipKey, and VBRO, property managers need to make sure they are protected.

 

What Is Subletting?

 

Subletting is when a resident finds someone else to cover their lease requirements. The other person moves into their space for a temporary period and pays the renter a fee. Often times this is done when a renter cannot complete the terms of their lease. They may move, lose their income, or require a larger space. With vacation rentals, your residents could make a profit on your rental.

 

Why You Need To Address Subletting

 

Subletting directly impacts your business. There are both pros and cons to allowing subletting. Pros include keeping your residents when they have to leave temporarily, reducing unexpected vacancies, and ensuring rent is paid on time. The cons include losing control over who lives on your rental as you will not be screening these individuals. Whether you choose to allow subletting or not, since it impacts your and your rental, it is important to include in your lease.

 

How To Address Subletting In A Lease

 

There are many things you’ll want to address when drafting your subletting clause including:

 

—    Stating clearly whether or not subletting is allows

—    If allowed, outlining the subletting screening process and any associated fees

—    The amount of notice before allowing a sublet

—    Conditions on subletting including duration of sublet

—    How to deal with any damages during the sublet

—    Detailing restrictions on home sharing platforms like AirBnb

 

How you decide to structure your subletting depends on your particular business model. However, you are not required to allow subleasing. It is up to your own discretion.

 

Developing a comprehensive lease for your residents can be challenging. Making sure that you cover everything so that you and your residents are fully protected requires a high level of expertise. The experts at Occupancy Solutions can help. We can review your current lease and make sure that you aren’t missing any important clauses like subletting. Contact us today to learn more.