All About Subletting

What is Subletting?

A sublet, or sublease agreement, adds someone new to an existing lease. Usually the new person (subletter) replaces someone who is moving out (sublessor or sublessee) but it can also happen with any new person being added to a lease. A sublease is a binding contract, and all of the same lease rules and rental laws apply to everyone involved as with a regular lease. In Wisconsin, rental agreements can be verbal, but a sublease has to be in writing. Otherwise, the agreement is some other type of leasing situation and different rules might apply. Wis. Stat. 704.09(4)

First things first: A tenant might not need to sublet!

Subletting is risky. It comes with the same risks as taking on a roommate, except both people won't be there to deal with problems as they arise. If a tenant's subletter skips town or damages the apartment, the tenant is jointly and severally liable with them and could get stuck with the bill. If you are the new person moving in (subletter), it can feel just like a regular rental, except the person you might have the most contact with is both a tenant and (kind of) a landlord. For both the tenant and subletter, chances are good that this isn't someone you know very well, and sometimes there are better options available!

For all those reasons, a tenant wants to make sure they actually need to go this route before signing a sublet agreement. At Tenant Resource Center, we only suggest this as a last option, although many students end up having to chose it for the reasons here.

As a tenant, you only need to sublet if...

  • You are leaving a lease you share with roommates and at least one of them is staying behind. (This is by far the most common reason for subletting.)
  • You want to come back to the same apartment later on (like for the summer after a spring semester away).

If none of those apply, we strongly encourage tenants to look at other options for ending a lease early! The end result is the same (someone new moving in to the apartment, and taking over the rent) but the landlord has to do more work finding that new tenant, and the tenant has no more obligations even if that new person breaks the rules or owes money.

A Tenant's Steps for Subletting

  1. Landlord permission. Check your lease for rules about subletting or "assignment".
    • If you have a month-to-month lease or are a tenant-at-will, you are never allowed to sublease without your landlord's permission. But in that situation, it doesn't really matter! You can end your lease fairly quickly, with or without their permission, by giving a simple written notice. Wis. Stat. 704.09(1)
    • If you have a lease for a set term, like one year, you can sublet with or without your landlord's permission, unless they prohibit this in the written lease. Wis. Stat. 704.09(1). However, even if you're allowed to, it is never a good idea to move someone in without the landlord's knowledge, since they may not respect that person's rights if they don't know they are a tenant there. It's always best if you can get the landlord's permission too, but at the very least you should tell them who is living there.
  2. Roommate permission. (Don't have roommates? Consider other ways to end your lease!) You always need permission from the other tenants to add someone to the lease. You can only change essential terms of the contract if the other parties to the lease agree to it. This means your roommates have to approve of the person moving in, the amount of rent they will pay, etc. Work it out among yourselves as to who will be putting ads up and doing showings, when they will meet the roommates, what the criteria will be, etc.
    • Tips for the person moving out: You want to be as accommodating as possible so they will accept the new roommate. Think about it from their perspective and keep the communication open.
    • Tips for the person staying behind: You also want to be fair in accepting or rejecting a new potential roommate. If the current person leaves without being able to secure a replacement, you can try to get rent money from them down the line, but usually not before the landlord starts the eviction process. And if there's no clear roommate agreement about rent payments, then it can be extra hard to make a previous roommate pay for rent after they've left.  So, it's in your best interest to accept someone who will fulfill the obligations of the tenant who is leaving. Check out our helpful blog posts: Negotiation 101 and How to Ask for What You Want!
  3. Sublet agreements. Here is a sample sublease agreement you can fill out or use as a template. It's a very good idea to have everyone sign a roommate agreement as well, where applicable. Whatever you do, you will all need to agree on a few important things like:
    • Who will the subletter pay rent to?
      • It is safest if they pay directly to the landlord. Subletters are at risk for eviction if the sublessor takes their money and doesn't put it towards the rent on time.
    • How will you handle the security deposit?

How Subletting Works

Subletting has 2 forms:

  1. The original renter becomes (legally) a co-tenant to the subletter. In this situation, the original renter is joint and severally liable with the subletter. They become legal co-tenants because it is the landlord who offered the lease to the subletter.
  2. The original tenant becomes the landlord to the subletter. In this situation, the original renter is still a tenant to the unit's landlord, and must comply with the terms of their original lease. But that original renter is also the landlord to the subletter, because the original tenant was the one who offered a lease to that subletter. The original renter must follow all laws as the landlord (for example, notice for landlord entry in the places where the subletter has exclusive possession), but must also follow their own lease as a tenant. The original tenant is liable for all the actions of their "guests or invitees," and so would be on the hook for any unpaid rent or damage done. FYI: If, in this kind of scenario, the original tenant loses their right to rental housing (through nonrenewal, or eviction, for example), then the sub-tenant also loses their rights to housing. 

When a Landlord Must Consent to Sublets:

Wisconsin law doesn't say much about subletting. The one place where there is a specific reference to a "sublease" is in Wis. Stat. 704.09(1), but only to say that original tenant(s) need to seek the consent of the landlord in order to offer a sub-tenancy when:

  • The lease of the original tenant says that they must seek authorization from the landlord in order to sublet
  • The original tenant is a month-to-month or periodic tenant (figure out what kind of lease you have here)

Security Deposits

It is safest for the landlord to do a check-out with the old tenant to return their portion, and then do a check-in with the new tenant and collect a new deposit from them. However, this takes time and energy, and the landlord is not required to do this. If the landlord won't, the tenants have two options:

  • One is for the old tenant to sign their deposit over to the new tenant, and in the meantime collect that amount of money from them. The risk with this option is that the new tenant might not like the amount they get back, and they would be able to sue the landlord or the old tenant for anything they felt was unfairly deducted. ATCP 134.02(5) & (12).
  • The other is for the tenant moving out to simply wait until the end of the lease term for the landlord to return their deposit. The risk here is that the old tenant might get charged for things the new tenant damaged.

Either way, it will be very important for everyone to follow all of the security deposit laws and best practices about checking in! For more information, see our page About Security Deposits.

Many People on the Lease:

In a situation where there are many people on a lease, and they are all joint and severally liable as co-tenants and roommates, it can get messy when one person wants to move out before the lease is done. We most frequently see this scenario with students living in the big houses around Madison, and this is one of the few scenarios where subletting might actually be the only choice. 

Here's why: Breaking a lease or otherwise voiding a lease (more here if you don't know about these options) will only work if ALL of the tenants choose to take that course of action. So, in a situation where any of the tenants are staying in the unit under a lease that is still valid, there needs to be some other kind of solution to deal with the person who is leaving. Here are the options:

Option 1: Mutual Agreement to Terminate

People always have the right to change the terms of a contract, as long as everyone who is named on the contract agrees to those changes. We have a sample form for a situation where all the parties on the lease (ALL of the tenants - not just the ones who are staying; the landlord, all cosigners) can choose to end or amend the lease, if they all agree to that - it's here. Coming to an agreement, even where it's not fully comfortable, can alleviate some of the pressure, since there's a clear plan for everyone to follow. We highly recommend going this route if at all possible. If you do come to some kind of agreement, be sure to write it down.

An example: there are 5 original tenants on the lease, and 1 of those tenants wants to leave. The 4 remaining tenants are not thrilled about this, but agree to let the 5th tenant off the lease, as long as that tenant pays an extra month of rent for the time that their room will remain vacant. The 4 remaining tenants will look for a new 5th tenant during that month, and the landlord agrees to let that new person onto the lease, as long as the new prospective tenant meets the landlord's application criteria.  

If you're making an agreement, you might want to answer these questions:

  • For how much time will the unit be vacant until it can be filled by someone else?
  • What will happen to the security deposit once it is fully or partially returned?
  • Will the vacant unit be filled? If so, who will live in the unit? If the unit needs to be filled, but no one has yet been identified, who will search for a subletter (more on this below)?
  • Do you have a roommate agreement that identifies what course of action must be taken in this situation?

Option 2: Subletting

So, let's say that there are multiple people on the lease, and one (or more) of them is leaving, while one (or more) of them is staying. Let's say it's kind of contentious (maybe a breakup where one person stays and one person goes). Then, if someone who is named on the lease leaves, what happens to their liability? And how does their liability transfer to a subletter? It's not totally clear. 

Before we begin, anyone considering these options needs to get really clear on joint and several liability. A quick example: If $1000 is due in rent, and there are 5 tenants named on the lease as joint and severally liable, then the landlord has a right to the full $1000, and it doesn't really matter if it's evenly divided among the tenants. If the rent is not paid, the landlord can choose to evict whomever they choose (most likely the person/people remaining in the unit).)

Therefore, if someone leaves, it is not totally clear who is landed with the responsibility of paying the rent and other non-rent costs. If there is a roommate agreement, GREAT. That allows the roommates to hold one another responsible for what is owed, although the landlord doesn't have to follow that agreement when deciding who to evict. 

Because of all this, if one person leaves, and there are tenants who remain in the unit as part of a valid lease, then the only option may be to sublet. Here is what subletting might look like in this scenario:

  • The tenant(s) who stay in the unit search for a subletter.
    • Pros: The tenants who live in the unit will have to live with the subletter, so they should choose the person they want to live with.
    • Cons: It's not their fault that a subletter was needed.
  • The leaving tenant searches for the subletter.
    • Pros: The leaving tenant knows that they have a higher chance of not being liable for rent if they find a replacement for themselves.
    • Cons: They might choose someone who is difficult to live with for the tenants who remain.
  • The landlord will not allow any subletter: In term leases, landlords must consent in order for tenants to be able to have a subletter. If the landlord does not consent, you wouldn't be able to (legally) have a subletter.
  • No subletter is found: It may be that, due to a variety of circumstances, a subletter is not found. The tenant(s) who remains in the unit could be forced to pay the entire rent (possibly with the option to sue the person/people who left, if there was some kind of agreement about how financial responsibilities are allocated), or could be evicted for not being able to pay it. The person who leaves is not legally off the hook, in terms of their legal and financial responsibility, but often has less of a reason to continue to pay if that person is not physically living in the unit.

So, what steps can be taken by tenants?

  • Try to make an agreement about how this will be handled. Really. It's the best option. If you need help coming up with something, try and find a mediator in your area who can help (for residents of Dane County, we have a mediation program that may be able to help).
  • If you are the one leaving, you can:
    • Choose to try and replace yourself (and likely lower your financial liability for rent, but it's also possible for it to increase if the replacement does damage or fails to pay rent),
    • Choose to do nothing (which would push the problems down the road - any evictions or suits would happen later, and your name could legally be on all of those)
  • If you are the one staying, you can:
    • Choose to pay the whole rent, and sue the former original tenant for their portion (this usually works best when there's some kind of agreement showing how the rent was divided)
    • Choose to try and replace the tenant (the leaving tenant will still be on the lease, and will still have liability under that lease, but you'll be able to pick who you are living with)
    • Pay part of the rent and hope the landlord doesn't evict you (this is not likely to work)

When Subletting Is the Only Option That the Landlord Gives:

Subletting is not the only option (except for the situation above, with many people on the lease). There are a number of ways to end a lease, and the law says that breaking a lease is always an option. Specifically, Wis. Stat. 704.29(1) says that landlords have to find a new tenant if a tenant breaks their lease, and Wis. Stat. 704.44(3m) is very clear that if the lease says that the landlord doesn't have this obligation, then the lease is void.

Usually, tenants find that subletting is the only option (which isn't true) because they attempt to break their lease, and are informed that the landlord will not allow the lease to be broken. There are 3 possible ways that a landlord might communicate to the tenant that subletting is the only option (which isn't true):

  • The lease says that subletting is the only option.
    • A lease that doesn't allow a tenant to break a lease, and only allows the tenant to sublet is a probable violation of Wis. Stat. 704.44(3m). A lease that only allows subletting, and doesn't allow lease breaking means that the landlord is waiving their duty to mitigate damages, and means that the tenant(s) can choose to void their lease. To take this course of action, all tenants would write a letter to the landlord citing the lease, the law, and request to void the lease. Here is a sample letter for this situation.
  • The landlord says that subletting is the only option.
    • If a landlord says that a tenant is not allowed to break a lease, but instead must sublet, then that's not allowed under the law, but it's hard for the tenant to prove, since it was a verbal conversation. Therefore, the tenant would write a letter confirming that the landlord is prohibiting the tenant from breaking a lease (it'll help later on proving the landlord's lack of mitigation - sample letter here for putting conversations in writing), and then proceed to break the lease (steps on this blog post, along with a sample breaking lease letter).
  • The landlord just doesn't mention that breaking a lease is one of the possibilities.
    • Lying by omission is something that isn't covered by tenant-landlord law. So, just because a landlord doesn't offer breaking a lease doesn't mean that a tenant can't do it. In this situation, follow the steps here to break a lease, and if at any point the landlord verbally says that subletting is the *only* choice, follow option #2, above. 

Please remember: when we say "landlord" here, we mean anyone who is acting as a landlord. So, this applies to rental agents, as well as the person who holds the title to the property.

Breaking Leases vs. Subletting 

When people have the urge to sublet, many times breaking a lease is a better choice. Breaking a lease tends to be a better choice when:

  • All the people who are listed as tenants wish to break their lease (breaking a lease doesn't work if some of the tenants will stay in the home).
  • The original tenants don't know/trust the subletter. With subletting, the original tenants remain financially on the hook for all rent that might be unpaid and all damage that the subletter might do.
  • A tenant has a term lease. Tenants who have month-to-month or other periodic tenancies will probably do better just sending in a non-renewal notice. (Are these terms confusing for you? Check out our page on leases)

In the past, we've dealt with the steps to break a lease a number of times, so look at these pages for more information on breaking a lease:

The Sublet Fee

Sometimes, when a landlord learns that a tenant wishes to sublet, the landlord will inform the tenant that they need to pay a fee in order to have the option to sublet. This fee is often not fully legal. 

To be clear, sometimes a landlord does have costs associated with screening a new tenant (background checks, criminal history checks), and the landlord can pass these costs onto the tenant. However, a landlord cannot:

  • Charge a fee beyond the actual damages (this is due to liquidated damages - click to read more and for a sample letter to dispute those charges).
  • Charge for their time. There are specific circumstances in which a landlord can charge for their time, but this is not one of them. Because screening new tenants or otherwise making the unit available to subletters has some overlap with mitigation and lease breaking, we see that the laws on a landlord's time spent mitigating apply to this situation. See the second note at the bottom of Wis. Stat. 704.29.

Best Practices in Subletting

Here are some best practices we recommend:

  • Rent Payments Should Go to The Landlord: Subletters should almost always pay rent directly to the landlord. If they pay the original tenant, that person may not pass the payment along to the landlord and it could result in an eviction action where the subletter, not the original tenant, loses their housing.
  • Security Deposits: The safest way to deal with the security deposit is for the original tenant(s), the new tenant(s), and the landlord to meet in the apartment for a “check-in/check-out” and to refund the original deposit owed to the sublessor, while collecting the new security deposit owed from the subletter.
    • PRO: The original tenant cannot be held responsible if the subletter does not get their entire deposit back.
    • CON: It can be a challenge to find a time when everyone is willing to meet at the apartment. If they miss or forget to record some damage, the subletter will become responsible for those items. Many landlords are not willing to be this involved in the sublet process. Original tenants who accept a security deposit must follow security deposit laws and regulations that apply to landlords (click here for info on those laws).
  • Check-in and Check-out Procedures: Original tenants should complete a check-out form and subletters should complete a check-in form. Renters should make copies of the completed forms and send originals to the landlord. This will prevent future disputes regarding damages to the apartment. If any furniture, appliances or electronic items are left in the unit to be used by the subletter, both the original tenant and subletter should carefully document the condition of the items.
  • Sublet Agreement: All sublets should have a written agreement. Here's a sample agreement. Feel free to add on - this is just a suggestion to the beginning of a longer conversation.