When is it a good idea to sign a sublease agreement? And how does it differ from a lease?

Quick Overview

You enter into a sublease agreement when you rent an apartment or part of an apartment not directly from the owner, but from a tenant. This typically involves shared living arrangements, renting a room, or living in a cooperative apartment. The advantage is a faster and more flexible arrangement; the disadvantage is weaker legal protection than with a standard lease. The most important thing is to verify whether the tenant is authorized to sublet, whether the landlord’s or the housing cooperative’s consent is required, and when the sublease ends.

Be sure to check, in particular:

• whether the tenant lives in the apartment themselves or is letting you have the entire apartment,
• whether the main lease agreement allows subletting,
• whether the amount of rent, the security deposit, utilities, and the notice period are specified in writing,
• whether the sublease ends automatically with the main lease,
• whether this is just a ploy to circumvent tenant protections.

Not sure whether a lease or a sublease agreement is safer for you? Have a lawyer review the agreement before you sign it—with a sublease, a single missing sentence could determine whether you’ll still have a place to live in a few months.

Specifics of a Sublease Agreement

We enter into a sublease agreement when we arrange to live in an apartment or room not with the apartment owner, but with the owner’s tenant, who is most often already living there. A common example of this is shared housing, such as among college students, where the lease agreement is drawn up only between one of the students and the apartment owner. The student can then enter into a sublease agreement for the room directly with the tenant.

Another variation of this arrangement can be found in housing cooperatives, where members own only a cooperative share rather than the apartment unit itself. They then live in the apartment as tenants, and if they do not live there, they usually rent it out to a third party, or “sublet” it.

What should a sublease agreement for an apartment include?

Unlike a lease agreement, a sublease agreement is not subject to any specific rules, as the law does not specify what its essential elements should be. If you’re looking for a universal sublease agreement template, you don’t need one. It always depends on the specific agreement between the landlord and the subtenant.

In general, however, we recommend that both parties specify their rights and obligations in as much detail as possible to prevent future misunderstandings. Therefore, always make sure that the sublease agreement includes a precise description of the subleased apartment or part thereof—for example, if you’ll be occupying only a room—as well as the amount of rent and the services provided, including their due dates. While a written form isn’t mandatory, it’s highly recommended.

In practice, we most often deal with sublease agreements that specify the monthly payment amount but fail to clarify what exactly constitutes rent, what constitutes advance payments for utilities, when utility bills are settled, and under what conditions the subtenant may terminate the sublease. It is precisely these “details” that determine whether the subtenant will get their security deposit back or whether they will have to move out within a few weeks.

If you already have a draft lease agreement, send it to us for review. We’ll verify that the agreement properly addresses sublease rent, utilities, the security deposit, termination, the landlord’s consent, and its relationship to the main lease agreement.

Advantages and Disadvantages of Subletting

Tenants have significantly more rights than subletters. However, this does not mean that a sublease agreement is without merit or that we should dismiss it outright. Nevertheless, caution is advised. You usually enter into a sublease agreement with the tenant of the apartment, who also lives there and has their own lease agreement with the apartment owner. In such a case, the Civil Code does not require the consent of the apartment owner. This can be an advantage if, for example, you are dealing with a sudden and temporary housing emergency and cannot afford to wait for the owner’s response, especially if they are on the other side of the globe.

However, if the tenant does not live in the apartment and does not use it, the landlord’s consent is required.

On the other hand, one disadvantage is that the sublease agreement is tied to the lease —if the lease expires, the sublease agreement automatically terminates as well. Furthermore, a sublease (unlike a lease) can be terminated without cause. And if you wish to register your permanent residence at the local office, you must have the owner’s consent. However, experience shows that even residents with a standard lease agreement, out of courtesy and to maintain good relations with the landlord, will obtain the landlord’s consent for permanent residence—or at the very least, inform the landlord of their intention.

Sublease Agreement for Non-Residential Premises

A sublease agreement for non-residential premises is often used when a tenant of premises intended for business purposes wishes to allow another person to use part or all of the premises. You can also sublease non-residential premises through a lease agreement. However, under the new Civil Code, we no longer use the term “non-residential premises” per se; instead, we refer to the lease or sublease of premises used for business purposes. This refers to a space or room intended for the conduct of business activities; such a space is used at least predominantly for business purposes, regardless of how the purpose of the lease or sublease is stated in the contract.

A sublease agreement for non-residential premises is therefore particularly suitable if you are conducting business in a leased space and are not making full use of part of it. In such a case, you can offer part of the space to another business owner through a sublease—but always in accordance with the main lease agreement and, if necessary, with the property owner’s consent.

Imagine that you have a 100-square-meter office, but you only use half of it. You can enter into a sublease agreement for non-residential space with another business owner who will use the other half as a studio—provided the landlord agrees.

Take an interest in both the owner and the tenant of the apartment

Trust, but verify. Even if you’re friends with the tenant—or even relatives moving in together as roommates—ask to see the lease agreement.

While neither the tenant nor the apartment owner is legally required to show you the lease agreement, we recommend at least asking for confirmation of its existence, including information about its term.

After all, this is an important factor in deciding whether to sign a sublease agreement. As we mentioned above, the sublease ends at the same time as the main lease, so you’ll probably want to know how long you can theoretically stay in the apartment. It also wouldn’t hurt to check the real estate registry to make sure the apartment actually belongs to the person who was introduced to you as the owner.

From our experience: A client signed a sublease agreement for a room in an apartment but failed to verify that the main lease was set to expire in just three months. When the tenant and the owner failed to agree on an extension, her sublease automatically ended as well. A subtenant must therefore always verify not only their own document but also the stability of the main lease.

Sublease Agreement for a Cooperative Apartment

As we indicated in the introduction, a tenant cannot sublet an apartment or part of it to someone else without the owner’s consent under any circumstances. A prerequisite is always that the tenant must permanently reside in the apartment themselves. Only then are they entitled to sublet the apartment without having to seek the owner’s consent. This is particularly important to keep in mind in the case of cooperative apartments. If you are a member of a housing cooperative but do not live in the apartment and are considering renting it out, first check what your cooperative’s bylaws say. You may be surprised to find that the right to sublet the apartment is explicitly granted in the bylaws; otherwise, you’ll need to request approval from the cooperative’s governing bodies.

Beware of Landlords’ Tricks

Sometimes landlords use a tactic where they formally rent the apartment to a relative, who then sublets it to a third party. The purpose is precisely to limit the subtenant’s rights on the part of the landlord, who may have had bad experiences with tenants in the past. The landlord may have had a tenant who failed to pay rent, but had no choice but to respect that tenant’s legal rights. Consequently, if the landlord had a mortgage on the apartment, they had to make the payments without being able to offset them with rental income.

Nevertheless, if a landlord offers you a sublease agreement, be cautious. This solution generally cannot be recommended, as it essentially amounts to circumventing the law, even though it may seem understandable from the landlord’s perspective. There are other ways to resolve the situation so that the landlord can be certain they are indeed moving a reliable and responsible tenant into the apartment.

It is always possible to agree on a sufficiently high security deposit, adequate apartment insurance, or a notarial deed with an enforcement clause to cover any future debts. After all, this is standard practice for cities and municipalities that rent out apartments they own to citizens. They often sign this notarial deed at the same time as the lease agreement.

Is someone offering you a sublease instead of a lease agreement and claiming that “it’s just a formality”? In such a situation, we recommend reviewing the agreement before signing it. We’ll help you determine whether this is an attempt to circumvent the tenant’s legal protections.

Summary

A sublease agreement is particularly useful when you’re renting a room, part of an apartment, a cooperative apartment, or a space from someone who isn’t the owner but is a tenant. Compared to a lease agreement, it offers weaker legal protection because the sublease is tied to the main lease and can end at the same time as it does. Before signing, always verify the owner of the apartment, the existence and duration of the main lease agreement, any consent from the landlord or housing cooperative, the amount of rent, the security deposit, utilities, and the terms of termination. Be especially cautious if someone offers you a sublease instead of a lease for an apartment that they actually own and are renting out in its entirety—this may be an attempt to circumvent the tenant’s legal protections. If you’re running a business, also make sure the main lease allows for subletting of the space used for business purposes and that the owner consents to it.