Can my tenant sub-let my property?
I am asked this question a lot and I understand the reluctance of landlords to allow it – after all, you have made an agreement with a specified person, yet someone else now wants to move into your property as well.
There is also the question of your tenant sometimes making more money than you do!
However, the simple answer is this – yes, your tenant can sub-let your property but they must firstly obtain your written consent.
Make sure you’re all on the same page so there are no surprises.
If they do not, then they may be breaching the terms and conditions of their lease and the tenancy could be terminated.
If your tenant does seek your approval for a sub-letting, you cannot unreasonably withhold your consent (i.e. you cannot say no without a good reason).
And you also have a good tenant – they could just move a person in without you knowing so to seek consent is a good thing. It allows you to know what is going on and not be surprised when you do a routine inspection and there is someone else living there.
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That being said, you are absolutely entitled to see applications from prospective sub-tenants and use the same due diligence that you or your property manager used with your tenant.
You just have to be fair and reasonable and be able to withstand a challenge from your tenant that you were unreasonable in saying no.
You cannot increase the rent – however much you may like to – because you have given approval for your tenant to sublet.
It’s important you or your property manager vet the person your tenant is looking to sub-let your property to.
However, under tenancies legislation, you are entitled to seek any reasonable expenses for giving consent or considering an application for consent.
All this may sound a little complicated and I also often get asked – well, why can’t I just bypass all of this by adding a term and condition into the lease that the tenant is not allowed to sub-let?
While this may seem a good fix, you are contracting out of the Act which is prohibited and you can face a fine of $50,000 if you do.
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The best advice I can give you is to work with your tenant to come up with a sub-tenant who is acceptable to all parties.
A good sub-tenant will help pay your tenant’s rent (which is always a good thing) and help to take care of the property.
Communication is the key and always keep in the back of your mind – if you aren’t constructive and you just refuse the consent without a good reason, your tenant will most likely just move them in anyway.
Real Estate Institute of South Australia’s Paul Edwards. Supplied.
Answer provided by Paul Edwards, REISA’s Legislation and Industry Adviser
English (US) · 