A sublease is an arrangement where the original tenant (as sub-landlord) rents the unit to a sub-tenant. The original tenant remains on the lease; most leases prohibit subleasing without landlord consent.
Subleases create a three-party relationship: original landlord, original tenant (now sub-landlord), and sub-tenant. The original tenant remains liable for rent and lease compliance to the original landlord. Unauthorized subleasing is a common lease violation.
LA multifamily landlords frequently encounter unauthorized subleasing, particularly in tight rental markets. For sellers, knowing whether units have undisclosed sub-tenants matters for rent roll accuracy and buyer diligence. Investigate during pre-listing; disclose in marketing.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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