Pros and Cons of College Subletting

If you aren't careful with subletting, your rental could end up looking like this college building, the MIT Stata Center. (It was purposefully designed to look slapdash.) Photograph by Pablo Valerio license CC-BY.

What is a Sublet?

A sublease or a sublet is a tenant who rents from your tenant. This can be created by a verbal or a written agreement between the two parties. The agreement can be provided by you or by your tenant. The sublessee can be screened by you or by your tenant. You can have a policy of full disclosure or “don’t ask, don’t tell.” There are many varieties of sublease. Keep this in mind as we review each pro and con below.

Pros of Allowing Subletting

Continuing Maintenance Requests

It’s easy to wince when someone reports a problem in their unit, but we all should be thankful when this happens. Small problems inevitable become big ones with neglect. If you permit subletting, your property won’t be vacant all summer when the students head home on vacation. This leaves less chance for mushrooming maintenance issues. If there’s leak from the roof or another unit, it will be detected promptly. Toilet traps won’t dry out. And there won’t be other odors from forgotten food. Having someone in the unit may also deter vandalism or break-in’s.

Higher Rent/Lower Vacancy Cost

Rental agreements that explicitly allow subletting are more attractive to tenants, and can command higher rents. They can also be filled faster when they come vacant. The primary tenants will have a long-term home, but they won’t have to pay rent when they’re not using it in the summer. If you’re advertising as sublet-friendly, you can take charge of the situation by also requiring tenants to use your own sublet agreements. This brings us to the next point.

Indemnity is Possible

You can construct a rental agreement to allow subletting but to have the tenant (or better yet, their parent cosigners) specifically indemnify you against damage to the unit, unpaid rent, or legal costs if there’s an issue with their sublessee. And you can require them to use a sublease agreement that has the same indemnity for your tenants and that prohibits sub-subleases. This puts the burden where it belongs, on the subletter. You can also screen the sublessees the way you want it done.

Cons of College Subletting

Strangers in the Building

You have a new set of renters coming in who will increase the transient feel of your building. This matters most if you have year-round renters in other units. Transient residents can also impact efforts you may have underway with other units to enforce no-trespass orders or other guest policies. The strangers will be not just the new sublessees, but also their guests and possible sub-sublessees.

Potential for Uncompensated Loss

If you have a good rental agreement, the original tenant will still be responsible for damages or problems even if caused by the sublessee. But any sublessee might not care as much for the place, or might not appreciate your attention to lease restrictions. Certainly the sublessee will have less investment than a long-term tenant in their short-term home.

If a problem became so bad that an eviction of the sublessee became necessary, this would fall on your shoulders as the landlord. Also, depending on the situation, you might need to evict both the original tenant and the subletter. This is problematic if you had been “hands off” about subletting, because at this point you might not even know the subletter’s name.

Once you’re through court, you still have to enforce the indemnity clause against your original tenant or their parent cosigners. In practice this may be too difficult to accomplish, and you might eat the costs of whatever happened.

Best practice

If you intend to sublet, be hands-on. Long before the semester ends, remind your students that all sublets must pass your rental screen. Give them a copy of your scoring system so they can see how it works. This will let your tenants pre-screen candidates before you spend your time on them. It will also help them to set expectations, because maybe you won’t find a sublet. You can screen the subletters yourself and give your own subleases for the tenant and subletter to sign.

On the other hand, if you don’t intend to sublet, remind your tenants that subletting is prohibited under the rental agreement and wish them a great summer.

Do you have experience subletting? We’d love to hear what you think! Email info@masslandlords.net, subject “Subletting article.”