Q. A family of four is renting our two-bedroom apartment (the husband and wife, who are on the lease, and their two children). We found out that they have a friend staying in the unit long-term. Are they allowed to collect rent from a fifth tenant who is not on the lease? Our contract states that guests can stay for a maximum of 15 days in a calendar year.
A. Generally, in the absence of a clause in the lease or rental agreement prohibiting subletting or assigning a tenant’s unit, a tenant may sublet or assign that unit. However, where there is a prohibition or limitation on subletting or assigning a rental unit, the tenant must first seek the landlord’s permission before assigning or subletting.
First, it is important to distinguish between a sublease and assignment, both of which involve a tenant’s transfer of their interest in a lease. A tenant’s transfer of their entire interest in a lease is an assignment. In an assignment, the person being assigned the tenant’s interest steps into the shoes of the assigning tenant, thereby taking the tenant’s place. At this point, the lease becomes a direct lease between the new tenant, assignee, and landlord.
A sublease, on the other hand, occurs where a tenant transfers less than their entire interest. The original tenant, or master tenant, remains liable to the landlord but also acts as a landlord by leasing space to the subtenant. In that case, the subtenant has no relationship or obligation to the landlord, but is obligated to pay rent to the master tenant.
Here, it appears that the “fifth tenant” who is not a party to the lease agreement is paying rent to the master tenants. The master tenants remain obligated to comply with the lease agreement as they lease space to the “fifth tenant.” Whether the contract can be enforced depends on the language in the lease agreement. If the lease agreement has a clause prohibiting assigning or subletting of the unit, the contract should be enforceable against the “fifth tenant.” However, if there is only a clause limiting a guest’s stay at the unit, the contract is not enforceable against the tenant since the person occupying the space is considered a subtenant and not a guest.
Copyright © 2018 by Fried & Williams LLP. All Rights Reserved. The information in this article is general in nature and should not be considered legal advice. For any specific matter, please consult with an attorney.