To sublet or not to sublet...

December 30, 2012 10:29 AM

SubletFilter: For personal reasons, I need to step away from my one-bedroom apartment in desirable NW Portland. I would really like to sublet the place, possibly with furniture, for around 6 months. How can I protect myself legally? What am I allowed to charge for rent?

So, my list of questions:

- My management has stated they are okay with me subletting the apartment. This is cool. The landlord suggested I get a contact signed between me and the sub-tenant. Landlord explained that the new tenant will have to be signed-in on the lease with me, but can't boot me off the lease without my consent. It sounds like the new tenant will be privy to seeing the amount I pay in rent each month... Landlord says the property management company doesn't need to know anything about the contract between me and the new tenant. Is this legal? Does a contract template for this arrangement exist? Any legal particulars for Oregon that I should be aware of?

- Can I charge my sub-tenant more than I pay in rent? I have a great rate from living in the unit for several years. The "market rate" has risen a good $200-300 over what I pay. Is this legal for me to do? Am I crazy? Again, this is an amazing apartment (top floor, front corner, big windows, wonderful neighbors) in an even more amazing neighborhood.

- Should I bother leaving it partially furnished? We're talking some mediocre-looking furniture, here. Lots of Ikea. I can, however, drop a new full-size mattress in. It will be a major inconvenience for me to figure out a new 'home' for the furniture I'd like to leave in the unit. I've already cleared the place of any valualbe possessions. My worry is that lower-end furniture will weaken, not strengthen, the sublet deal. The cast: one couch that needs cleanining, coffee table, old rug, kitchen table, big Ikea desk, Ikea bookshelves, end table, electric radiator, full-size bed, and two small misc tables.

- Clearly, I need to have the place cleaned. What's the best maid service for a deep-cleaning in Portland, OR? If I sublet with furniture, what's the best way for me to clean that couch out? It's a nice piece of furniture, but it needs some TLC, bad. Steam cleaning?

- Other misc: I plan to forward my mail, but keep my address. I can leave utilities in my name, should I do that? They include power and Comcast, everything else is included in the rent. I have a renters insurance policy. Do I cancel the policy, or is there some value for this kind of situation?

Finally, if this is crazy, tell me! I'd hate to lose this apartment, but if I'm getting set for a lot of trouble, I can deal with the sacrifice. I do plan to return after six months, and finding another place in the neiborhood sounds miserable. I'm sure I'm forgetting other important details. Guide me, Mefi! And thanks for the help!

posted by roygbv to Law & Government (12 answers total)

My management has stated they are okay with me subletting the apartment. This is cool. The landlord suggested I get a contact signed between me and the sub-tenant. Landlord explained that the new tenant will have to be signed-in on the lease with me. . . Is this legal?

Yep. Landlords are not actually required to permit subletting at all, and many restrict tenants' rights to do this by the terms of the lease document.

The question isn't "Is this legal?" as much as "Is this what the terms of the lease provide?" To answer that, read the lease, and if you must, consult with a local attorney.

Can I charge my sub-tenant more than I pay in rent?

There isn't any legal reason you can't. There might be a contractual one, i.e., you may have agreed to that when you signed your lease. But there isn't an obvious legal one. Again, consult with an attorney if you must.

But you may find that you can actually command a higher price for a sub-lease than you can for a full lease. Three things. First, if you furnish the place, that's obviously value-added. But second, a six-month lease requires less commitment from the sub-lessee, and for many people, that's something worth paying for. For example, someone going through a divorce, or on a temporary work gig, or bridging the gap between closing on their old house and moving into their new one. All of those sorts of people might find the possibility of a six-month lease attractive and be willing to pay a slight premium for it. Third, you're assuming some risk here. You have a property interest in this apartment. Granted, it's a leasehold not a freehold, but it's still an interest, and transferring it to someone else involves a certain amount of risk, such as them bailing out on you, them causing damage for which you'll be held responsible, etc.

Should I bother leaving it partially furnished?

Not really a legal question. It becomes a question of whether it's going to cost you more in time and hassle to pack, store, and unpack all your shit than it will to leave it there and possibly pay for repairs and/or replacements.

But if you're only talking about a six-month sublease, most people aren't going to care overly much about the quality of the furniture.

I can leave utilities in my name, should I do that?

Probably for the best. You can pass that cost on to your sub-tenant via the terms of the sub-lease, but paying your own bills is always a good idea.

I have a renters insurance policy. Do I cancel the policy, or is there some value for this kind of situation?

Do not cancel your policy. Your policy provides not only coverage for your property, possibly anywhere in the world (i.e., with you wherever it is you're going), but also valuable liability coverage that isn't tied to your residence at all. I'd make it a requirement in your sub-lease for your sub-tenant to have renters' insurance. You're also probably going to want to call your insurance company to let them know what's going on. You may find that there's no coverage for property damaged by your sub-tenant. That may be what his liability coverage is for. Just ask.
posted by valkyryn at 10:49 AM on December 30, 2012 [4 favorites]

Places with rent-control or -stabilization laws (Portland among them? Don't know) often prohibit controlled/stabilized tenants from subletting or room-rental at a markup to the underlying rent (pro-rata in the case of room rental).
posted by MattD at 11:03 AM on December 30, 2012

I would consider having a cleaning service every two weeks that you pay for (but the price is built into the rent you charge) to keep the house clean - you dont want to come back to a toilet that hasn't been cleaned in six months - and be something value-added you can mention in your ad.
posted by saucysault at 1:05 PM on December 30, 2012 [1 favorite]

Have you considered whether renting it out on a short-term basis to travellers via AirBnb or equivalent would better serve your purposes?
posted by carmicha at 1:18 PM on December 30, 2012

Naturally, you need to store or securely lock away anything valuable, or take it with you. A friend of my father's winters in Italy every year and sublets her condo in the US, and has had about a 19/20 success rate. The one bad apple broke some furniture and there was at least one small artwork that disappeared, and they overstayed their lease and she had to threaten eviction to boot. But with screening and other precautions this works for a lot of people.

I think valkyryn's advice is spot on, especially as regards renter's insurance. You should definitely review your policy and find out if you need any additional coverage in this situation.

Still, the #1 hurdle is landlord approval, and you've got that. That said, I don't think you should use your landlord for legal advice. Make sure you have a sublease that conforms to Oregon law and protects you.
posted by dhartung at 1:51 PM on December 30, 2012

*Make sure the lease your tenant signs states clearly that this will be for 6 months maximum, and state the lease end date/move-out date.
*Insist on a security deposit.
*The monthly rental you charge should cover the rent, the utilities and some over --- maybe not $200-300 a month, but enough for expenses. (Average out the monthly utilities total and add that to the rent, but keep the utilities in your name.)
*Do NOT drop your rental insurance! This is the kind of thing where you'lll be glad you have it, but also check with your insurance agent that your policy does cover a sub-tenant and any damage they might cause.
*Don't just forward your mail, transfer the address for everything to a post office box --- you do NOT want to risk your tenant getting their hands on your credit card or other financial info.
*Take extensive photos of everything (walls, furniture, appliances, etc.) before you let them move in, so you have proof of condition.
*Remove all of your financial records, portable valuables and anything else you absolutely don't want to lose.

A lot of holiday rentals at beaches and resorts have an "owner's closet": a securely locked area for property the owner wants to leave in their home. Just make sure that if you do this, that your "owner's closet" or wherever IS secure, because your tenant will have lots and lots of time for lock-picking if they're evilly inclined.
posted by easily confused at 4:58 PM on December 30, 2012 [1 favorite]

I too was going to recommend letting your place for Airbnb. If you will still be in the area to take care of greeting your renters and handing over keys, or have a trusted friend around, you can probably make double your rent. I would move everything of value out. Think 'beach house': leave basic furniture (bed, dresser, couch, table), basic kitchenwares (plates, utensils, pots, pans, coffee maker, blender), and basic bath stuff (towels, bathmat, plunger) and a few cleaning products (windex, toilet cleaner, broom, mop, rags) Think about how much decent hotel rooms are--you can charge less than that and still make a lot of money. Then just make sure to have a cleaning service come between subletters.
posted by greta simone at 5:25 PM on December 30, 2012 [1 favorite]

greta and carmicha, I'm having a hard time seeing how AirBnB would work with the landlord's requirement to put the subletter on the lease (and perhaps the general spirit of the landlord's intentions as well.) How would you work that?
posted by spbmp at 10:21 PM on December 30, 2012

Response by poster: Awesome responses! Thanks all!

I'm very interested in this Airbnb setup - would I need to run this by the property management company? Seems that good renters insurance plus standard upkeep (maids every week or so) is all I'd need to protect myself and the apartment. I'm living about 10 minutes away for a few months, and could keep a close eye on the place without issue.
posted by roygbv at 8:39 AM on December 31, 2012

If you decide to go Airbnb (and I agree, it does sound like a good idea for your situation): first, run the idea past your landlord. They're agreeable to subletting, so I'd guess they'll probably be okay with this, too. (And it would certainly remove any worries about evicting a subletter after their 6-month lease was up!) Again, remove anything you'd remove in a subletting situation. As for cleaning and upkeep, it'd be best to have a maid company clean and change the sheets between each and every rental, even if that's just a day or two.

As for Airbnb costs: don't just divide your total monthly costs (rent, utilities, cleaning, etc.) by 30 to get a daily rate --- remember, even in the best of situations you won't be able to have 100% occupancy. Perhaps divide your monthly costs by 15 for the per-day rate, or even divide your monthly cost by 10.
posted by easily confused at 9:54 AM on December 31, 2012

I lease a 2 BR furnished cottage through AirBnB while holding down a job that requires near constant travel. It's not hard to manage and I do most of it using my phone. You'll need good photos and some stock information paragraphs (e.g., directions, house rules, etc.). Last year I made about $15K about $115/night at a time. You need to track expenses for tax purposes and figure out what your local laws require.

However, the key to my success is having a reliable cleaner who will do laundry, change the bed(s), clean, and restock the fridge (I provide simple food for breakfast, but many don't) using provisions I leave at my main house next door or, on occasion, that she buys on my behalf. And you must change the sheets and clean the place between guests.

Regarding setting your price, I must also disagree with easily confused's recommendations; your costs have nothing to do with what the AirBnB market will bear. Instead, look at the competition--what they offer vis-a-vis space and location and at what price--and indicators regarding their success. Incidentally, AirBnB isn't the only option out there. The company makes it easy to direct Craig's List readers to your place, but there's also VRBO (tends to be nicer properties) and others too. MeMail me if you want to know more.

Regarding your landlord, these guests would be your responsibility, unlike a subletting tenant. Your landlord might be interested to know that AirBnB provides $1 million in liability insurance to protect property owners against damage caused by guests. For small things, there's a security deposit you, as the host, can draw against. I have never experienced any problems (beyond minor things, like a broken glass or two) and all guests I've met (many I never see) have been terrific people.
posted by carmicha at 9:39 AM on January 1, 2013

BTW, I clean it myself when I'm home, which increases my yield considerably. If you're only 10 minutes away, AirBnB would be great for you! I also have a minimum two night stay to amortize the cleaning hassle/expenses across more days, but some listings include a separate cleaning charge as a different approach.
posted by carmicha at 9:48 AM on January 1, 2013