Subletting can be a big headache for Nashville rental property owners.
Or, it can be a great opportunity for both owners and tenants.
It’s all in perspective and while our property management expertise makes us a bit wary of subletting in general, we know that it can work under very specific circumstances and with a lot of oversight. What you absolutely want to avoid is a tenant subletting your property without your knowledge and permission.
Nashville has high demand for rental properties, particularly among students, remote professional workers, and retirees who tend to travel a lot. With a market that moves with so much fluidity, there are arguments to be made for and against subletting a rental.
While subletting may seem like a convenient option for tenants and a potentially hands-off solution for landlords, there are some risks involved, and we want to talk about them so you’re aware.
We’re here to explore the various pros and cons of subletting and to provide some insight into the legal and practical considerations involved. We’ll also explain why, ultimately, it may be best to prohibit subletting altogether. If you choose to allow it, we’ll also offer some guidance to protect your investment.
Understanding the Point of Subletting
If you’re new to renting out properties or if you’ve never temporarily sublet a home yourself, you might wonder what we’re even talking about. Subletting, or subleasing, occurs when a tenant rents out their leased space, or a portion of it, to another individual, who is generally known as a subtenant. The original tenant retains their lease agreement with the landlord and remains responsible for paying rent and complying with the lease terms, but the subtenant lives in the property.
In cities with high mobility like Nashville, where students attend seasonal programs, artists tour frequently, and professionals may be on short-term contracts, subletting can be especially ideal. But what works for a tenant may not always align with your best interests as a landlord.
The Risks of Allowing Subletting in Your Nashville Rental
From a landlord’s perspective, and especially from our perspective as Nashville property management experts, subletting often introduces more problems than benefits. Here’s why:
- Loss of Control Over Tenants
When a tenant sublets, they may choose someone you wouldn’t approve of. That could be someone with poor credit, a criminal history, or a lack of steady income. If you don’t screen this person yourself, you’re left in the dark about who’s living in your property.
- Property Damage Liability
The original tenant is technically responsible for any damages, but enforcing that responsibility can be a logistical nightmare, especially if the tenant moves out and the subtenant disappears. Your property may be left in disrepair without a clear path to compensation.
- Lease Violations
Subtenants may not be aware of, or may choose to ignore, your lease terms. Issues like unauthorized pets, noise violations, or illegal activities become harder to manage when the resident doesn’t have a direct agreement with you.
- Legal Complications
Evicting a subtenant can be more complex than evicting an original tenant. If you need to remove a subtenant, the process might involve more legal steps, especially if your lease agreement didn’t clearly prohibit subletting in the first place.
- Strained Tenant Relationships
Even if subletting is permitted under certain conditions, disagreements between the tenant and subtenant can create tension. You may be drawn into disputes that don’t involve you, taking up your time and resources.
Why It’s Often Best to Say “No” to Subletting
Considering the risks, the safest policy is to prohibit subletting in your Nashville rental property entirely. This allows you to:
- Maintain full control over who occupies your property.
- Ensure every resident is fully vetted and meets your leasing standards.
- Reduce the likelihood of lease violations and legal issues.
- Simplify your management responsibilities.
Your rental property is a valuable investment in a competitive market. Allowing subletting puts your investment at unnecessary risk.
Let Your Lease Agreement Address Subletting
If you don’t want subletting to be an option during any lease term, your lease should clearly state that subletting is not allowed. Be specific and include language that prohibits both full-unit and partial-unit subleasing (such as renting out a room). This will strengthen your position if enforcement or legal action becomes necessary.
But What If You Decide to Allow It?
Some landlords are open to subletting, especially in markets with high seasonal turnover or where long-term vacancy is a concern. If you fall into this category, it’s essential to implement safeguards.
Here’s how to do it responsibly:
- Require Written Approval
Tenants on your existing lease agreement must obtain your written consent before subletting. This keeps you in the loop and ensures you’re not blindsided by an unauthorized occupant.
- Screen the Subtenant Yourself
Do not skip this step. Treat the subtenant like any new applicant. Require a rental application, perform a background and credit check, verify employment or income, and check references. Don’t rely on your tenant to do this. Their idea of a “good roommate” may not align with your standards.
- Use a Sublease Agreement
The original tenant is still bound by your lease agreement, but you also want to have some kind of authority over the person they’re subletting your home to. A legally binding sublease agreement should be signed by both the tenant and the subtenant. This document should outline:
- The duration of the sublet
- Rent amount and due dates
- Security deposit handling
- Responsibilities for utilities and maintenance
- Any applicable house rules
Make sure this agreement doesn’t contradict your original lease, and consult a Nashville property manager or a local real estate attorney to ensure it complies with Tennessee law.
- Clarify Responsibility
Make it clear that the original tenant remains responsible for rent payments, property care, and lease compliance. If the subtenant causes damage or breaks rules, the original tenant bears the consequences.
- Set Time Limits and Conditions
Allowing short-term subletting for a few months is very different from a revolving door of renters. If you do permit subletting, set strict limitations, such as a minimum sublet duration or only under specific life circumstances (such as internships, travel, and temporary relocation).
Nashville’s Laws and Regulations on Subletting
In Tennessee, including Nashville, state law does not require landlords to allow subletting. This means you have full discretion to decide whether or not to permit it in your lease agreement. However, if the lease agreement does not address subletting at all, a court could take the position that your tenants had the right to move out and allow another party to take possession as a tenant.
This is not a risk we’re fond of taking. As Nashville property managers, we strongly recommend you make your lease explicit. Either prohibit subletting altogether or clearly outline your process and requirements for approving a subtenant.
Alternatives to Subletting
If your tenant wants to leave early, there are better options than subletting:
- Early Termination Clause
Include an early termination clause in your lease. This allows tenants to break the lease under certain conditions (usually with a fee or sufficient notice), and you regain full control to find a new, qualified tenant.
- Tenant Replacement Option
In this situation, you can let the tenant find a qualified replacement, but then you will conduct the screening and sign a new lease directly with the new person. This avoids the complexities of a sublease while still giving the tenant flexibility.
- Short-Term Lease Offers
In high-turnover markets like Nashville, consider offering shorter leases (maybe for 6 or 9 months) to tenants who are unsure of long-term plans. This can prevent the need for subletting at all.
While subletting might sound like a flexible solution for tenants, it rarely benefits landlords in the long run. The risks, including legal headaches, property damage, and loss of control, tend to outweigh any convenience or short-term gain. Nashville’s competitive rental market already gives you an amazing opportunity when it comes to finding reliable tenants, so there’s little need to take on the added risk.
That said, we know that every situation is unique. So, if you do choose to allow subletting, approach it as seriously as any new lease. Require written consent, thoroughly screen subtenants, and implement strong legal agreements to protect your property.
If you’re a landlord in Nashville and want to avoid the stress and the uncertainty that often comes with subletting and tenant management, consider partnering with a professional property management company. A good property manager will handle tenant screening, lease compliance, maintenance, and more, so you can enjoy the benefits of rental income without the day-to-day stress.
This is something we have worked around for a number of tenants and landlords. Whether you want to sublet or you’re looking for ways to protect your property from tenants who might try and sublet, contact us at Apex Ventures, Inc. with all of your questions. We’d love to serve as your Nashville property management resource.
