Marie Frost’s subletting nightmare started about five months after she and her two sublessees all moved into the same spacious, three-bedroom home in Orange, Calif.
“They were drunks and one was so stoned all the time his method of communication was near that of a penguin,” said Frost of her roommates, whom she met in high school. “The only time they paid their rent on time was when they first signed the lease back in September of last year.”
The roommates regularly partied until 12:30 a.m. on work nights, invited guests to stay three to five nights a week and more than once forgot to pay the utility bills, which cut off the house’s water and cable, said Frost.
She pulled out the notarized sublease she had them sign, which even included specific protocol regarding guests, but they continued to pay their rent late.
In the end, Frost found herself $1,570 short. The pair skipped out on the last month’s rent–and Frost was nervous about how much of the $2,550 security deposit and $800 pet deposit she would get back from the landlord.
The sublessees left carpet stains, holes in the wall, refrigerator trash in the kitchen and a beat-up pool table in the garage. Frost will not know for the next few weeks whether she will have to take Mackson and Wrong to small claims court.
Unfortunately, the story of a troublesome sublet proves too familiar. Subletting can be a great opportunity to make up for lost rent or even add a little extra income on the side, but most renters don’t realise the kind of liability they’re taking on.
“You always remain 100 per cent responsible for the rent when you bring somebody in,” said Steve Harrison, a long-time real estate manager in the Orange County, Calif. area. Here are his tips to stay safe—and what Frost should have known before she signed that lease.
Always check a sublessees’s credit history, says Harrison. Have the person fill out an application that includes his/her personal references and the contact information of previous landlords. You must know their credit history.
One of Frost’s biggest mistakes was accepting two guys with either no credit or bad credit. The landlord rejected the group in the first place and Frost had to take on their liability.
Harrison also recommends collecting a security deposit. If you’re not having a real estate agent help you, download a standard sublease off the Internet or buy one from Office Max or Staples, and make the sublessee sign it. Try to make the sublessee liable for all that you’re liable for under your lease.
As for utilities, make the sublessee put them all under his or her name. Although you risk coming home to no running water or electricity periodically as Frost did, doing this is far better than trying to collect rent and money for the utility bills simultaneously.
If you can avoid it, don’t live with the people you decide to allow sublet. It will make everything more complicated if things go sour.
Of course, the steps Harrison outlines assumes you have the right to sublease. If the lease has a provision against subleasing, and you decide to sublet anyway, it could be grounds for the landlord to terminate the contract altogether. So watch out.
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