With the cost of just about everything on the rise, Americans increasingly are choosing to stay put.
Along with dramatic declines in new home sales, $4-a-gallon gasoline has prompted many to cancel their vacation plans or change them in favor of more local environs. According to a recent survey by Chicago consultancy firm Challenger Gray & Christmas, 11.4 percent of job seekers relocated for a new position in the first quarter of this year, compared to 25 percent 10 years ago.
For apartment renters, traditionally the nation's most mobile demographic, the economic downturn has translated into a general reluctance to hand the keys back to the landlord in order to pursue uncertain opportunities elsewhere. What if that new job doesn't pan out? What if that cheaper apartment across town turns out to have an insomniac accordion player living next door?.
Instead, renters may choose to sublet their apartments to third parties as a way to hang on to the unit in case things don't work out. Reports of a significant increase in subletting are largely anecdotal, since such transactions are often done discreetly. But housing authorities at such institutions such as the University of California system have noted the increase to the point of issuing advisories to students that subletting can be a hazardous endeavor.
So what can renters looking to sublet their apartments do to reduce the risk of not only opening their doors to strangers, but also inviting them to move in? According to the experts, the first step should be to check with the landlord to make sure subletting is even allowed.
"Whether you have a lease or don't makes a big difference," says Stephen Roulac, author of "255 Real Estate Investing Mistakes and How You Can Avoid Them" (Property Press, 2004) and CEO of Roulac Global Places, San Francisco. "If you have a lease, one of three conditions will apply: There's a strict prohibition in the lease against subletting, the lease may permit subletting with no conditions or circumstances, or subletting is permitted with the landlord's approval.
"If subletting isn't permitted, the tenant can still negotiate with the landlord about it," he says, adding that his comments are general suggestions, not legal advice.
"There's no reason why a tenant can't go back to the landlord and ask for permission, and, from the landlord's perspective, it might be better to get another tenant in there if he knows the tenant is moving. The tenant may leave anyway without paying rent, and the landlord is stuck with having to track the tenant down. If the landlord agrees to the subletting with certain conditions, such as putting the sublessee's name on the lease, and that way the original tenant continues paying rent and the landlord gets a new tenant with no marketing costs."
Regardless of whether the landlord asks that the sublessee's name be put on the lease, just about every expert on the subject agrees that the original tenant would be well advised to have the sublessee sign and date a contract anyway. The contract should clearly state exactly what expenses the new tenant is responsible for: rent, utilities, and, most important, any damages he or she might afflict upon the apartment. The original tenant should also put together an inventory checklist noting the condition of all items in the apartment, and have the sublessee sign and date that, too.
"Typically, most landlords will keep the original tenant on the hook just in case the sublessee defaults on rent," says Brian Kroker, vice president of asset management for NWJ Companies in Philadelphia. "Damages can go against either party, either the lessee or the sublessee."
In other words: Should a sublessee skip out on the rent after reducing the apartment to rubble, the original tenant - liable for all of it - needs to be prepared to take the sublessee to court.
That brings up the third and trickiest step experts suggest tenants take before subletting: They need to make sure they sublet to a responsible person. Background checks are one suggestion, but experts are quick to point out that such checks are often meaningless: A prospective sublessee with lousy credit records could turn out to be the best tenant, and one with excellent records can turn out to be nightmares. Subletting to friends or friends of friends can be just as beguiling: Who really knows a person until they've lived with them?