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How to Dance the Sublet Tango: A Primer for Prime Tenants

If you intend to sublet your apartment in New York City and you are the prime tenant, which means the rent is paid in your name, there's a multitude of important factors to consider. To ignore even one of them is to ask for trouble. The most critical point to keep in mind on any sublet transaction, whether your apartment is rent-regulated or a free market unit, is that you remain liable for most actions of the subtenants. This is the case even when you have the landlord's permission to sublet. That being said, two problems occur frequently:

  • The first issue involves timely payment of rent. If the subtenant fails to pay on time, you can be subject to eviction proceedings and lose your lease. Even if you're not evicted, you could be liable for the landlord's attorneys fees.
  • A second difficulty is more common for non-regulated units, but is also applicable to rent-regulated leases. If the lease expires and isn't renewed, you are required to deliver a clean, empty apartment at termination. Although the sublease may have a concurrent expiration date with yours, if the subtenant doesn't leave within the required time frame, you could be responsible for paying rent afterwards, plus the landlord's legal costs to evict. Be at least as careful in renting to others as the landlord was in renting to you.

You must also comply with certain rent regulations that are specific to subletting. If you have a rent-stabilized lease, current laws allow the landlord to charge a 'vacancy allowance' of up to 20%, over and above your monthly rent, for occupancy by a subtenant. You can charge 10% above the landlord's charges if you rent the unit furnished. But since you remain legally responsible to the landlord for the rent, if your subtenant falls into arrears, you'll have to make up the back rent, plus the vacancy allowance, to protect your tenancy.

If you live in an unregulated apartment, the lease may govern how much you can charge or how much you must share with the landlord.

Also, under Rent Stabilization, you can only sublet for a maximum of two out of any four years, without risking the end of your tenancy.

Taking all these potential liabilities into account, here's a valuable tip: If the subtenant pays the rent to you, and you then pay to the landlord, you will know that the rent is actually paid and when.

Most leases require the landlord's permission for subletting. State law governs when and how tenants must get that permission. By law, a landlord cannot refuse consent to a sublet unreasonably. However, if the subtenant's financial profile is not as strong as yours, or if there are other valid reasons to turn down your request, you can be denied. The landlord has 30 days to notify you of a decision, once complete information on the sublease transaction is provided.

As you can see, subletting is a precarious dance in New York City. Be aware that if you don't follow the steps precisely, you can jeopardize your lease.

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