Long Summer uni holidays often means ending a lease early or subletting while you head home for the break. We caught up with Tom Finlay, Principal of Quinovic Kent Terrace, Johnsonville and Hutt Valley to find out more about the reality of subletting.
In short, subletting allows someone to move out of their property and rent it out to someone else. It is a popular short-term rental solution that allows individuals to return to their home after the sublease has ended. Subletting is different from ‘Assignment’ which is a more permanent way for tenants to replace themselves in a tenancy agreement.
In recent years, the rental landscape in New Zealand has faced a lot of reforms. Residential Tenancies Act 1986, amended in August 2020, sought to update the rental laws in New Zealand, aligning them with the modern-day rental market. The Residential Tenancies Amendment Act 2020 gave tenants the right to sublet their tenancy agreement unless the rental agreement states otherwise. However, there are some essential rules and responsibilities around subletting that should be followed by both landlords and tenants.
Landlords can still include a clause in rental agreements which prohibits the sublease of their property. There can be valid reasons behind doing this; for example, If a property owner’s insurance policy does not allow for sub-letting. In this case, they should include a clause in the rental agreement to clarify this from the offset. If a landlord does receive a request to sublet, they cannot unreasonably withhold permission and should respond to the request in writing.
If there is no clause in the rental agreement, an individual must still seek permission from the landlord. Renters should always be upfront and seek consent from their property manager or landlord. If they believe that their request was denied unreasonably, they can then appeal the decision to the Tenancy Tribunal.
Subletting can be a convenient way to save some money when going on holiday. It’s particularly popular among students that want to move home for a few months over summer break. This financially viable option ensures you can move out temporarily and still return to the property after the sublease has ended. However, there are some key factors to consider first:
If you’re looking to sublet, the first thing you should do is review your tenancy agreement. If subletting is prohibited, it will be clearly stated in your contract. If nothing is noted, simply reach out to the landlord to discuss your situation.
Pro tip: We recommend submitting sublet requests in writing with some information around your plans for filling the vacancy.
Subletting an apartment doesn’t come without risks. There is a loss of control when letting out a property to a third party. This means there is a chance of missed rent payments and property damage. Although this is rare in Tom’s experience, it’s still important to select a trustworthy person.
The most significant risk is for those who go ahead with a sublet without their landlord’s permission. With potential fines up to $1500, this is something that should be avoided at all costs.
When subletting, you will remain on the tenancy agreement as the original tenant. However, you will also simultaneously become the ‘landlord’ to the subtenant. This means that it is your responsibility to ensure that rent payments are made on time and that the property is kept to a reasonable standard of cleanliness. Therefore, finding the right candidate is essential. Finding a responsible and reliable person to take over the lease will give both you and your landlord peace of mind.
When subletting a property, potential candidates can be found through websites like TradeMe. Although, it would be ideal to select someone you know personally and trust. We always recommend that tenants reach out to their personal networks when looking to sublet.
Once the proposed candidate has been selected, a good property manager should complete the necessary tenant checks to ensure the property is in safe hands. These include:
If a landlord has not explicitly stipulated otherwise, they cannot decline a request to sublet. However, they can put forward conditions if they are reasonable. Tom explains that landlords can face insurance penalties if their property is sublet. This is due to the additional risks associated with subletting. The penalties imposed can be increased insurance premiums. In this instance, it would be reasonable for the landlord to set out a condition for these costs to be recoverable from the tenant through an itemised invoice.
It is also reasonable for the property owner to ask to see the sublet agreement before agreeing to the sublet.
If you have any questions about subletting, ending a lease or finding new tenants, get in touch with your local Quinovic office. We’re a nationwide team of property management experts and have managed over 125,000 tenancies since 1988. When it comes to legislative matters, we have a professional understanding of all new and existing rental property laws. No matter how big or small your question is, we’ll be happy to help. Ask Quinovic today.
Reach Tom Finlay’s team at Kent Terrace, Johnsonville and Hutt Valley offices.
