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What is a sublease, definition
A sublet is the conclusion of a lease agreement between the tenant and the subtenant, i.e. the tenant assigns the use of the leased property to a subtenant in return for payment of a rent. Subletting of the entire leased property is only permitted if the tenant has the concrete intention to return to the subleased property in the near future. The landlord may ask the tenant when he is likely to return to the leased premises. If the lessee refuses this information, the lessor has the right to terminate the lease ordinarily or early. Partial subletting, for example, subletting a room, is not limited in time. A main lease may be concluded for the purpose of subletting, e.g. an retirement home rents a villa and sublets rooms to its residents. Subletting may be allowed in a general way.
Art. 262 of the Swiss Code of Obligations
"A tenant may sub-let all or part of the property with the landlord’s consent."
Subletting cannot be prohibited by the lessor.
The application for a sublease
The tenant must ask the landlord for permission to sublet his premises. If it is a family dwelling, both partners must apply together. According to the framework agreement in French-speaking Switzerland, the lessor must decide within 30 days whether he accept the sublease of a dwelling.
Content of the sublease application
The tenant must communicate to the landlord all sublet conditions, i.e.:
- The contact details of the sub-lessee
- The rents, charges and accessorial costs agreed in the sublease agreement
- The purpose of the sublease
- The use of the room or apartment
- The sublease term
In case of partial subletting of an apartment:
- Designation of the sublet rooms
- Number of persons occupying the sublet rooms
Ideally, the tenant submits a draft sublease agreement to the lessor.
Reasons for refusal
Art. 262 of Swiss Code of Obligations: "The landlord may refuse his consent only if:
- the tenant refuses to inform him of the terms of the sub-lease
- the terms and conditions of the sub-lease are unfair in comparison with those of the principal lease
- the sub-letting gives rise to major disadvantages for the landlord"
The lessee warrants to the lessor that the sub-lessee will use the thing only for the use authorized by the main lease. The lessor may apply directly to the sub-tenants to oblige him to do so.
Examples of refusals accepted by the lessor
- The tenant makes an unreasonable profit from the sublet
- The sub-tenant is a competitor of the lessor or other tenants of the building.
If the lessor refuses the sublease and the lessee does not agree, he may apply to the conciliation authority. If he rents the premises without the consent of the lessor, he risks the termination of the lease.
Sub-letting without requiring the consent of the lessor
If the lessee subleases his object without seeking the consent of the lessor and without informing him of the conditions of the sublease, an ordinary or early termination according to Art. 257 f of the Code of Obligations may be made by the lessor. Furthermore, if the lessor has suffered damage, he may claim damages and the lessee must return to him the unlawful profits of the sublease.
The relationship between the lessor and the tenant (sub-lessor)
The tenant shall be liable to the lessor for any damage caused by the sub-tenant, including the payment of compensation for unlawful occupation if the sub-tenant does not vacate the premises after the end of the main lease.
Relationship between the tenant (sub-lessor) and the sub-tenant (sub-lessee)
The sub-lessor has the same obligations to the sub-lessee as a lessor has to a lessee. Formal legal requirements apply, e.g. the requirement for a notice of rent setting when entering into a new lease, notice of change in rent, notice of termination, etc.
The problems
The tenant becomes a sub-lessor, which I think is problematic. I have never met a tenant who had the skills and expertise of a real estate manager. On the contrary, the sub-landlords I have met have had nothing but problems and have been trapped by the sub-tenants who are not creditworthy.
The most common problems and errors are as follows:
- The tenant sublets his premises without the consent of the lessor
- The sublease lease is not properly entered into and contains void clauses
- The term of the sublease exceeds the term of the head lease
- The mandatory official forms have not been used and consequently the setting of the rent, the modification of the rent and the cancellation have been void
- The tenant subleases his premises because he cannot find a solvent successor tenant. The insolvent sub-tenant promises to pay the rent in advance for the term of the lease and at the end of the lease does not leave the premises and continues to occupy them unlawfully without paying rent or compensation for unlawful occupation
- The choice of sub-tenant is not made with due care. Insolvent persons are well aware of this and are only looking for premises to sublet
- The sub-tenant no longer pays the rent, the tenant does not know how to proceed and must continue to pay the rent to the main landlord
- Insolvent sub-lessee damages premises
- The sub-tenant does not vacate the premises at the end of the main lease. In such a case, the lessor cannot be compelled to agree to enter into a lease with the sub-tenant.The tenant must initiate evacuation proceedings against the sub-tenant and continue to pay compensation to the lessor for unlawful occupancy
- The main lease is terminated, the tenant does not claim the notice of termination in time and can no longer give notice of termination for the same date, the sub-tenant can claim damages,
etc...
The tenant has to solve problems with the sub-tenant himself. He cannot delegate them to the landlord or the real estate manager. This is when his professional incompetence becomes a problem.
Also the sub-tenant may have problems, for example:
- The tenant no longer pays the rent, the main lease is terminated...
- No extension of the sublease is possible beyond the expiration of the head lease
Conclusion
A landlord must have the skills and expertise of a property manager. A tenant who sublets his or her premises becomes a sub-lessor. The responsibilities that a sub-lessor takes on to the lessor and the risks of subletting are enormous and cannot be insured. This is why I generally advise tenants against subletting their entire leased property.
© Written and translated by Esther Lauber, Real Estate Trustee with Advanced Federal Diploma of Professional Education and Training, real estate manager
Legal terms taken from the portal of the Swiss goverment (Swiss laws), partly translated from French to English with DeepL, in case of doubt, the French or Germain version should apply
