The Indiana sublease agreement is a legal contract that allows a tenant to rent out all or a portion of the property to a subtenant in exchange for regular payments.
Does a Tenant Need the Landlord’s Permission to Sublet in Indiana?
In Indiana, a tenant does have to get the landlord’s explicit written permission to sublet. Even after consent is given, a landlord still has the right to reject a subtenant if they are unqualified, such as for having a high debt-to-income ratio or poor work history.
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Standardized Indiana Sublease Agreements
A standard form can be used in Indiana to create a sublease. Here’s what is generally included in an Indiana Sublease Agreement:
- The Names of the Parties – The original tenant under the lease is named in the sublease and is called the “Sublessor.” The third-party that is subleasing the rental unit is named in the sublease and is called the “Sublessee.”
- Rental Unit Location – The address for the rental unit as described in the original lease.
- Term – State the exact date of the sublease beginning and ending date.
- Rent – How much the rent is, when it needs to be paid, and how to pay it.
- Master Lease Inclusion – A copy of the Master Lease is attached to the sublease. If any exceptions in the Master Lease are not included they should be clearly stated in this section.
- Security Deposit – There is no limit on how much a landlord can collect for a security deposit in Indiana. This security deposit is held by the Sublessor (not the landlord).
- Return of Security Deposit – Indiana landlords have 45 days after the tenant moves out to return any unused portion of the security deposit.
- Inventory of Included Items – The list of items in the rental unit that are part of the sublease (furniture or appliances).
- Lead-Based Paint Notice – Under Federal law, if the rental unit’s premises were built before 1978, the Sublessee must be given a written warning notice, called a Lead-Based Paint Disclosure.
- Authorized Occupants – This identifies the new tenant(s) and those authorized to live in the rental unit including any policy about short-term guests.
- Disputes – A description of how disputes between the Sublessor and Sublessee are to be settled, which may include mediation and binding arbitration to avoid more expensive legal proceedings.
- General Conditions – A statement that the written sublease agreement contains all of the agreements between the parties and can only be modified by written consent of the parties to the agreement.
- Liability – The sublessee will be liable for any damages to the Sublessor. The Sublessor continues to have the ultimate responsibility to pay for any damages that impact the landlord as stated in the original lease agreement.
- Utilities – The utilities that are to be paid by the Sublessee and those to be paid by the Sublessor.
- Smoking Policy – State law permits the designation of a property as a non-smoking area. If smoking is restricted in the rental unit, any designated smoking areas are identified in the sublease.
- Landlord’s Consent – This section describes how the landlord is asked to give consent (if consent is not already included in the Master Lease). Tenants may create a signed sublease that is conditional on being accepted by the landlord before the sublease becomes effective.
- Signature: The signature and date for the Sublessor, the Sublessee, any Co-Sublessors, and Co-Sublessees (if they exist).
Tax Implications of a Sublease
In Indiana, a sublessor may be subject to a 7% state sales tax and an innkeeper’s tax for subleases less than 30 days. The County Innkeeper’s Tax ranges from 2% – 10% based on the location.
