Is this legal?

9 Replies

Lets say I find a house for rent, I agree that I want the house for rent. But, I don't use the house instead I rent out the house to someone else and charge them extra so I make a profit. Just wondering is this legal

Is it legal to sublease? Yes. But....

If you sign a lease on that rental most likely it's going to have a no sublease clause keeping you from doing that. As a landlord I don't permit subleasing my investment properties. If one of my tenants does that it voids the lease they signed.

And if it were , I the landlord sign the lease with you , then you rent it to a bunch of dirt bags that tear up the house . Sure you made a hundred or so a month . But YOU are responsible for all the damages . In the end you will most likely lose a couple grand . Or when they dont pay you , you still have to pay the landlord the rent or your credit gets hit .

Subleasing may be legal if your lease allows it.  One creative way to buy a multi-unit property is a "master lease/option".  With a master lease you lease the entire building from the owner, then sublease the individual units.  The option gives you the right to buy.

OTOH, most residential leases prohibit subleasing.  If you have a lease like that, sublease the property and the landlord finds out, they can evict you and your tenant.  If this is your plan, get the subleasing restriction removed when you sign the lease. If the landlord refuses, move on to the next deal.

Even if you do sublease a property with a lease that prohibits it, you're not doing anything illegal.  Illegal means the police with get involved, you'll go to court as "the state (city, county, or whatever) vs. you".  And you have the risk of jail or fines.  Rather, you're violating the terms of your contract.  That's a civil matter between you and the other party on the contract.  Just like due on sale clauses, you're not breaking the law by violating your contract.

Yep like others may have mentioned above, if there is no language in the contract prohibiting assignment/sublease then you can but you will be held fully liable for 'your' tenants as if they were you!

I don't believe illegal activity is limited to Criminal activity; Civil disobedience can also be illegal.

Civil disobedience would be a criminal action.  Civil actions are disputes between two parties.  Illegal actions are ones that violate laws.

Yes it is legal as long as the lease does not say subleasing is illegal. Here's the thing most leases say subleases is not allowed so that's the catch!

;) 

Others have done a good job of explaining the legality of it as well as no subleasing clauses in most leases.

All of that aside as a business model it's just not very good.

You have all of the liability and risk of being a landlord without any of the benefits. The owner benefits from Depreciation, mortgage pay down, increase in value etc. While you would only get the spread and you would still need to pay for any damages causes by the sub-tenant.

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