Read further to learn more about the rules & regulations surrounding subletting in Texas, whether for residential or commercial tenancy.
What is a Sublease Agreement?
A sublease agreement is used when a tenant who holds a lease with a landlord wants to rent the property to a third party. When crafting an original lease, Texas landlords should include a clause pertaining to subletting. Subletting occurs whenever a tenant leases all or part of a property to another.
In simple terms, a sublease agreement allows a current tenant to find another person to pay the weekly or monthly rent. Generally, a sublease outlines similar rights and responsibilities as the original lease agreement. When discussing a sublease agreement or creating a legal sublease form, the original tenant is referred to as the sublessor, while the third party is referred to as the sublessee.
Since you want to maintain control of your property, your tenant should agree to do this only with your permission, using a sublease agreement that you provide. In fact, tenants are required in Section 91.005 of the Texas Property Code to obtain permission from their landlords before subletting.
Purpose of a Sublease Agreement
A sublease establishes the responsibilities of each party involved. It also serves as a written agreement, and can be entered as court evidence if there is ever a dispute. Most importantly, it protects your interests as a landlord by:
- Ensuring that only those you approve of are permitted to live in the home.
- Providing continuity. Rather than allowing the original tenant to break the lease, you are continuing to hold him or her accountable.
- Establishing clear guidance to everyone concerning the rules and rent payment.
- Keeping you in the loop as to what is happening with your property.
- Providing you with a paper trail that can be used as an exhibit during court proceedings.
When to Use a Sublease Agreement
A sublease agreement is used whenever a tenant wishes to have someone else rent all or part of a property. This could be due to a transfer or whenever that person wishes to get a roommate.
Avoid using subleases so that drifters can move in with your tenant. Although you may care about your tenant personally, you nonetheless have a business to operate. Jobless relatives or friends who cannot get along well with others will only be more trouble than they are worth.
You should also prohibit subleasing that allows your property to be used as a vacation rental or standalone business. The last thing you want is for people to be coming and going and for you to be responsible for their injuries.
Benefits of a Texas Sublease Agreement
Under the right circumstances, a sublease agreement is beneficial to all parties concerned. A sublease agreement guarantees occupancy, and makes it easier for tenants to meet their obligations. Accordingly, you may not have to worry about renters keeping up with maintenance or making late payments.
Subleases do not alleviate original tenants from their responsibilities. You will still hold that person responsible for paying rent and complying with any other terms of the lease. This means that if a third party damages property or fails to pay, the original lessee must pony up.
Although sublease agreements are beneficial, they can sometimes cause problems if the wrong person signs them. As such, you should ensure that anyone signing a sublease agreement meets the same qualifications as your original tenant.
How to Complete a Texas Sublease Agreement
The Texas Property Code does not spell out any specific requirement for subleases aside from requiring tenants to obtain permission first. However, to protect your best interests and ensure compliance with other areas of the Texas Property Code, you should include the following information.
Names of Involved Parties
The first section will name the individual parties involved. This includes you as the landlord, your original tenant as the sublessor, and the new person as the sublessee. Be sure each person is clearly identified in the opening paragraph.
Include the legal as well as a physical description of your property, along with its street address. Specify what type of dwelling it is, and give a unit number if applicable. If the sublessee will occupy only a portion of the property, clearly spell out those areas in writing.
Security Deposit Amount
Will you be charging your sublessee a security deposit? You may feel this is unnecessary because you have already collected a security deposit when you leased the property. Even so, the more people you have living in a home, the greater the odds are for damage. Accordingly, you may wish to protect yourself by requiring another security deposit.
Failing to charge one person a security deposit but making someone else pay can open you up to discrimination lawsuits. This is why many Texas landlords ask for a second security deposit from a new tenant who is subleasing.
When it comes to a security deposit, you have several options. First, you could charge the new renter half of the original security deposit and then provide a refund in the same amount to your sublessor. You could also charge everyone a full security deposit and make the refund contingent upon each one’s ability to maintain the terms of the lease.
The terms regarding your security deposit must be listed very carefully. Remember that Section 92.103 also requires you to refund a security deposit within 30 days after a tenant vacates. So that you are not accused of withholding a deposit, you may want to provide instructions on how to receive it back.
Some landlords like to spell out who is responsible for paying what portion of the rent. This really isn’t required as your original tenant is still responsible for full payment regardless. The sublease agreement is a great place to emphasize this fact. Include a sentence to that effect and ask your sublessor to sign and initial.
Just because your sublessor is fully responsible for the rent does not mean the sublessee cannot be held accountable. Let that person know that he or she could face legal action if any or all of the rent is not paid on time. Write a few lines that talk about the possibility of eviction for non-payment of rent as well.
Other Rules or Laws
The same laws that applied to your original tenant should be followed by your sublessee. Ensure that person knows what those rules are by including them in your sublease. Some topics you may want to cover include:
- Overnight guests
- Use of common areas
- Non-payment of utilities
- Enforcing no renovations or improvements without prior consent
- Drug and criminal activity
By including the rules in your sublease, you guarantee that everyone is being treated equally. Accordingly, other tenants cannot complain because certain rules apply only to them and not to others. When you put the rules in writing, your sublessee also cannot claim he or she did not know about them.
Smoke Alarm Addendum
Section 92.255 of the Texas Property Code requires landlords to install a smoke alarm in every bedroom of a dwelling. According to Section 92.254, the smoke alarm you install should be properly tested, and listed for use by certain organizations such as the Underwriters Laboratory (UL).
Within the sublease (or in a separate addendum), include information about the smoke alarm. Provide the make, model, location, and date tested. Include a couple of sentences that explain the consequences of disabling a smoke alarm. State that the sublessee will be held liable for civil penalties, damages, and legal fees if he or she intentionally disables a smoke alarm. Let that person know that replacing the batteries is a tenant responsibility. Provide this information in bold or underlined font.
This will apply if you have limited parking space such as in a multi-family dwelling. If you wish to enforce parking laws (for example, have vehicles towed or fined), then you will need to include a parking addendum in your sublease. It should begin with the words “Parking Rules” or “Parking”. The heading must be in all caps, bold, or underlined.
Within this addendum, include a complete list of parking rules. Ensure the sublessee receives a copy, and have that person annotate that fact on the sublease agreement by initialing.
Lead-Based Paint Addendum
If your dwelling was built prior to 1978, federal law requires you to provide a lead-based paint disclosure. The form you will use is provided by the Environmental Protection Agency (EPA), and is available on their official website. Do not create your own version of this form or alter the official EPA document in any way.
Your original tenant should have signed this form upon commencement of the lease. Now you must also have your sublessee sign another blank form and attach it to the back of the sublease.
If your property was built prior to 1981, you may wish to include an asbestos addendum. In the addendum, list the location of any known asbestos as well as the dates of any testing. If you are not sure whether your property contains asbestos, simply let your sublessee know there is a possibility the dwelling has asbestos. Advise your new tenant not to make renovations or make holes in the walls as this might disturb any asbestos that is present. Have the sublessee acknowledge that there is or is not asbestos by initialing the appropriate line and then signing at the bottom.
Date & Signatures
The sublease agreement ends with the signatures of all parties concerned. Include a line for your own signature in addition to that of the sublessor and sublessee. If you desire a witness, leave space for that individual’s signature as well.