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Before signing a lease, most landlords take the time to vet potential tenants by running a background check, credit check and following up on personal references. The purpose of going through this process is to ensure that the tenant can afford the apartment and will take care to maintain its condition throughout the lease. After careful consideration, a qualified applicant is chosen, the lease is signed and a relationship is formed. The tenant now has the right to possession while the landlord retains a reversionary right to possession at the end of the term.

But what happens if the tenant decides to move, and instead of vacating, chooses to go off on their own and rent the premises to someone of their choosing? This is called a sublease. A sublease is when the tenant grants a lease to another tenant for part of the term or the remainder while retaining their rights and interest under the original lease.

Under a sublease, problems for the landlord can arise if the new tenant causes damage, engages in illegal activity on the premises, does not pay the rent, or fails to meet any of the obligations under the original lease. Despite having a reversionary right to the property, the landlord lacks a direct relationship with the new tenant. Furthermore, the new tenant has no obligations to the landlord. This means that no liability can exist between the landlord and the new tenant because each is only in privity with the first tenant. The landlord is thus limited to recoup any damages that may occur, from the first tenant.

Word of advice: Restrictions on sublets should be in the lease with clear language that includes its prohibition.

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