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Subletting: A Risky Game of Trust and Insecurity

21/03/2023 by
The Marketing Team
If you are after some extra income, you may considering subletting a room within your house or apartment. But, what does it actually mean to 'sublet' a room to someone? Keep reading this Business Kitz blog to find out more! What does subletting mean? Subletting is a rental agreement in which a rental tenant chooses […]

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If you are after some extra income, you may considering subletting a room within your house or apartment. But, what does it actually mean to 'sublet' a room to someone? Keep reading this Business Kitz blog to find out more!

What does subletting mean?

Subletting is a rental agreement in which a rental tenant chooses to lease some or all of the property they are renting, to someone else. This kind of arrangement commonly exists in shared living spaces, condos, and apartment buildings. Subletting enables tenants to earn passive income by subleasing their rental space, while still retaining the primary lease agreement with the landlord. However, subletting may be prohibited or restricted under certain tenancy agreements. Potential sub-letters are usually screened by the original tenant to ensure that they're trustworthy and can meet the rental obligations.

Is it legal to sublet in Australia?

In Australia, it is generally legal to sublet a property, with some exceptions. The landlord's permission is required before subletting, and the original lease agreement should be reviewed. Tenants who sublet may have certain responsibilities. The legislation governing subletting varies by state and territory. Tenants and landlords should review the specific legislation in their jurisdiction before engaging in subletting arrangements.

Legislation for each state and territory in Australia regarding subletting:

What is a sublease?

Sublease refers to a type of agreement where one tenant of a property rents the property to another person, known as the sublessee. In other words, the sublease is a secondary lease that occurs between the original tenant and the sublessee. The original tenant becomes the sublessor in this scenario.

What is a sublessee?

The sublessee is the person who occupies the leased property under the sublease agreement made between the original tenant and themselves. The sublessee pays rent directly to the sublessor, who is responsible for paying the rent to the landlord of the property.

The key difference between sublease and sublessee is that 'sublease' refers to the agreement itself. Subletting is generally subject to the landlord's consent, and the terms of the lease, which would usually be addressed by the original tenant before agreeing to enter into the sublease.

In conclusion, sublease and sublessee are two distinct terms used in the process of renting or leasing properties. Understanding their differences is crucial for anyone looking to sublease a property or become a sublessee.

What is the difference between sublet and rent?

Subletting and renting are two common ways of acquiring a living space. Renting is occupying a property for a specified period by paying rent to the landlord or owner. Whereas subletting is when you rent a place you have leased; to another person. In other words, a tenant rents the property to someone else, who will essentially become that person's subtenant.

A lease agreement binds both the tenant and the landlord to specific obligations, rights, and responsibilities. Subletting means that the original tenant leases the rental property to another person.

In the sublet arrangement, the landlord retains ultimate control over the property, and the tenant remains responsible for the property's condition. Alternatively, a rental agreement gives the tenant exclusive possession of the property for the leasing period.

What are the cons of subletting?

Subleasing is a common practice in which a tenant leases their rented property to another person, the sublessee. While subleasing might seem like a great option to cut down on costs, there are several cons associated with it. It may be important to understand whether you have a net rent agreement or a gross rent agreement, as this may determine the agreement provided for subletting. One of the significant risks of subletting is that the original tenant bears all the responsibility for property damage or violation of lease terms by the sublessee. Additionally, subleasing may void the original lease agreement. Furthermore, landlords often disapprove subleasing arrangements. Going against the landlords wishes may lead to eviction and/or legal trouble.

Legal Advice

If you have any questions regarding subletting, please do not hesitate to contact our sister company, Legal Kitz to assist you. You can request to book a free 30-minute consultation with their experienced and highly qualified team via our website now.

Additionally, you can also check out our Business Kitz Subscription to access our full range of legal, commercial and employment document templates.

About
The Marketing Team
Business Kitz Marketing team are experts in their field. You can expect the best business guides and updates on employment law here.

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