SUBLETTING IN NEW YORK - LIMITATIONS AND GUIDELINES
July 24, 2019 Posted in Landlord/Tenant Law Share
Navigating the subletting of rental apartments in New York can be a tricky business for Landlords and Tenants alike. This is especially true if the tenant is receiving subsidies or public housing assistance, and if the apartment is rent stabilized. Tenants and Landlords should be aware of the differences between subletting, assigning a lease, and having guests visit the apartment dwelling. This article is intended to provide some valuable information for Landlords and for Tenants who decide to sublease or to allow a sublease.
Who May Sublease Their Apartment?
- Public Housing residents and subsidized housing (i.e. HUD or Section 8), do not have the right to sublet.
- Tenants in non-profit buildings may be prohibited from subletting.
- Tenants in co-op’s and condo apartments do not have the right to sublet by law, and must look to the buildings’ by-laws and the terms of their proprietary lease.
- Tenants with rent subsidies, such as DRIE and SCRIE, Section 8, or FEPS, or who are in a program where rent is based on income may be in violation of the programs’ rules if they sublet.
- Rent stabilized tenants do have the right to sublet, subject to several conditions (see below).
- Rent control tenants do not have the right to sublet.
Subletting v. Assignment and Guests
There is an important difference between subletting an apartment, assigning a lease, and having guests.
A tenant may choose to assign a lease agreement, which means that the tenant of record is permanently leaving the apartment and assigning the remainder of the lease to another individual. The assignment conveys all of a tenant’s rights to occupy an apartment, unlike a sublet, which is made as a result of the tenant’s temporary absence from the apartment. The Landlord must be notified of the tenant’s desire to assign his/her lease, and must give consent before the assignment is made. The Landlord may withhold consent without cause; however, the Landlord should keep in mind that if consent is unreasonably withheld, the Landlord must release the tenant from the lease upon the tenant’s request with 30 days’ notice. If consent is reasonably withheld, then the lease may not be assigned and the tenant will remain liable for the remainder of the lease term. A tenant should give the landlord notice of the proposed assignment to a specific person with information about the potential assignee, so that the landlord can make an informed decision as to whether to assign the lease or not.
Tenants may want to invite guests to stay in their apartment. It is important to note that rent cannot be charged to individuals who stay in an apartment for less than thirty (30) days. This is an illegal practice that may be punishable by fines and sanctions by the City of New York to the Landlord, which may then be passed on to the tenant.
Subletting – The General Guidelines
If it is determined that the type of arrangement that a tenant would like to make is a sublease instead of an assignment or a guest invitation, the tenant and the landlord must abide by several procedures before a sublease is arranged. Landlords and Tenants must keep in mind that, except as indicated above, Tenants do have the right to sublet their apartments, if reasonable, even if the lease agreement is silent or prohibits such an arrangement. In order to be able to sublet, the following procedures must be met:
- The tenant is to sent a letter to the Landlord by certified mail, return receipt requested, requesting permission to sublease the apartment. The letter must contain several pieces of information in order for the Landlord to determine to whether to allow the sublease or not. This information includes:
- The term of the sublet – this term must not exceed two (2) years.
- The name of the potential subtenant.
- The business and permanent home address of the potential subtenant.
- The reason for subletting, which must reflect an intention to return to the apartment.
- The tenant’s address for the term of the sublet.
- The written consent of any co-tenants or guarantors on the lease agreement.
- A copy of the proposed sublease, which should also contain a copy of the lease agreement between the tenant and the landlord.
- A separate letter from the tenant and potential subtenant stating that the sublease is a true and accurate copy. This letter must be signed and notarized by both the tenant and potential subtenant.
- Within ten (10) days after mailing the initial request, the landlord is permitted to ask for additional information in order for the landlord to make decision as to whether rejecting the request would be unreasonable. This request from Landlords typically includes a list of questions regarding the potential sublessee’s resources and rental history.
- Within thirty (30) days after the mailing of the tenant’s initial request, or of the additional information asked for by the Landlord (whichever is later), the owner must send a reply to the tenant either consenting to the sublet or denying it and stating the reasons for the denial. The Landlord’s failure to submit a response within thirty (30) days will be considered a consent to the sublease. Also:
- If the Landlord consents, the tenant may sublease. The tenant will remain liable for future rents if the sublessee fails to pay.
- If the Landlord reasonably withholds consent, the tenant cannot sublet, and the tenant may not be released from the lease and may be held liable for future rents. Valid reasons for denying a request to sublet include:
- Tenant’s failure to follow proper procedures in requesting permission, including failing to provide the minimum information indicated above.
- Tenant failing to demonstrate a valid reason for being away during the sublease period (valid reasons include going away for a temporary job assignment, going to school, caring for a sick relative, or serving in the military).
- Tenant did not show that s/he intends to return to the apartment (examples include purchasing a house, or taking a permanent job elsewhere in the country).
- The potential subtenant does not qualify because s/he:
- Does not have stable income that is sufficient to afford the rent;
- Has a poor credit history, or an insufficient credit history;
- Has a criminal record;
- Has a history of being sued for eviction by previous landlords.
- If the Landlord fails to send a response within thirty (30) days, then the sublet request shall be deemed approved.
- If the Landlord unreasonably withholds consent, the tenant may sublet in accordance with the request. It is important to note that if the landlord then tries to evict the tenant for subletting when the Landlord unreasonably withheld consent, the Tenant may recover the costs of any eviction proceedings, together with attorneys’ fees, if it is found that the Landlord acted in bad faith by refusing to consent to the sublet.
Rent Stabilized Tenants
In addition to the guidelines outlined above, rent stabilized tenants and landlords have additional guidelines to follow with respect to subletting apartments. These limitations include:
- Tenants cannot charge subtenants more than their current rent unless the apartment is furnished during the sublet. If the apartment is furnished, the rent may be increased up to 10%. The Landlord may also collect a surcharge equal to the sublet allowance, if there is one, for the length of the sublet. This surcharge is set by the Rent Guideline Board every June and applies to renewal leases. This surcharge may be passed on to the subtenant.
- Tenants must maintain the apartments as their primary residence at all times, including the time of the sublet, and will reoccupy it at the end of the sublease. To prove primary residence status, tenants must pay New York City resident income tax, listing the apartment as the primary residence, and make sure that all records indicating residence, including driver’s license, car registration, and voting records, reflect the apartment as the tenant’s home. If the Tenant fails to maintain the apartment as the primary residence during the sublease, it may open the tenant up to an eviction action by the Landlord. Tenancies in which the tenant does not maintain the apartment as a primary residence are called “illusory sublets,” and the subtenant may file a complaint with the Division of Housing and Community Renewal (“DHCR”). If the DHCR finds that the complaint is justified, it will deny the tenant the right to a renewal lease and require the landlord to recognize the subtenant as the actual tenant who is entitled to a renewal at the stabilized rent. The tenant and possibly the Landlord will also be required to refund any overages collected during the sublet.
- Tenants have the right to a renewal lease, as well as the rights and status of a “tenant in occupancy” with respect to conversion of the apartment building to a condominium or cooperative ownership.
- Subleases are limited to two (2) years, including the term of the proposed sublease, out of the four-year period preceding the termination date of the proposed sublease. (example: if the tenant seeks to sublet an apartment for 2 years, but already sublet the apartment for any period of time during the preceding 2 years, the tenant would exceed the maximum 2-year rule and could be subject to an eviction proceeding). The Landlord may agree to waive this limit, but has the right to refuse if the Tenant makes a request to extend the limit. If the request is granted by the landlord, the agreement should be made in writing and retained by both parties.
- If the term of the sublease goes beyond the tenant’s current lease, the subtenant is subject to the tenant’s renewal lease. The Landlord is required to offer and accept a renewal lease from the tenant during the sublet period. Any rent increase as a result of a renewal can also be passed on to the subtenant.
- If a tenant overcharges the subtenant, the subtenant will be entitled to damages of three (3) times the overcharge and may also be awarded attorneys fees, and interest on the overcharge.
Rent Controlled Apartments
Please keep in mind that rent controlled apartments differ from rent stabilized apartments. In general, a tenant in a rent controlled apartment who is not occupying the apartment pursuant to an existing lease cannot sublet the apartment without the owner’s written consent.
The requirements for obtaining consent to sublet does not apply to tenants of rent controlled apartments. Additionally, there is no specific time limitation for subletting, but the tenant must obtain written consent to the length of the sublease, and must continue to keep the apartment as the primary residence.
Additionally, and unlike rent stabilized apartments, no sublet allowance may be charged by the Landlord or by the tenant for rent controlled apartments unless approved by the Division of Housing and Community Renewal (“DHCR”).
Tenants and Landlords seeking to gain more knowledge and assistance pertaining to subletting in New York should seek the advice of experienced counsel.