[ecis2016.org] While sub-letting can be a source of income for many in the city, understanding its legal intricacies is equally important to avoid any trouble
When Arpita Gupta, a clinical psychologist, came to New Delhi for her research work, she was unable to find a rental accommodation in and around Delhi, where she could stay for just a few months to complete her field work. The few home owners who were willing to rent out their apartments to her for a few months, either demanded a high security deposit or exorbitant rent. In vain, she contacted her family friends in the city, who helped her by sub-letting their own apartment to her. With a nominal rental value, Gupta now shares a room with the family in the 1,600-sq ft, three-bedroom apartment, along with all support including food, washing of clothes and other necessities.
You are reading: Dos and don’ts for tenants sub-letting their apartments
Property sub-letting means leasing of a portion of the property occupied by the tenant during his/her duration of stay. Tenants now prefer sub-letting a section of their apartments, to people who are looking for short stays. “The concept of paying guests is not new but sub-letting reflects the changing social patterns of society. Earlier, cases of paying guests and sub-letting were few. Now, there is an increasing demand from people, who come to the cities for short stays. Tenants living in upmarket areas, do not mind sub-letting their homes,” says property consultant Manish Gupta, who operates in south Delhi.
Regions in India, where sub-letting is becoming popular
As per rough estimates, there is an increasing trend, among tenants living in the National Capital Region, who are alone or have nuclear families, to keep a guest on rent to utilise the extra space and earn income. This trend is more visible in areas that have bigger apartments (large two-bedroom to four-bedroom properties) and independent houses. The rental rate for sub-letting, depends on the location, the tenant and the duration of the stay.
Looking at the opportunity, a number of brokers have also started offering such services, through their existing clients. “The market, however, is still emerging. A number of factors drive the decision to sub-let the property – in some cases, the owners live outside India or they may simply not be aware,” says another Delhi-based real estate broker, Praveen Sharma.
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Benefits of sub-letting your apartment
The direct benefit, is the rental income. For those who do not live with families, sub-letting helps them to earn and also provides them with company. Take for example, Amit Gupta, who sub-let his rental accommodation to two other working professionals in Noida. “I had some good company of people and was also able to reduce the burden of the rent,” he explains. Gupta had an arrangement, where he paid Rs 12,000 per month to the owner and he charged Rs 7,500 each from his flatmates, thereby, earning an extra Rs 3,000 every month.
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Risks associated with sub-letting
The biggest risk in sub-letting, is that you may get into a legal tussle with the sub-let tenant. The maintenance expenses of the house and other finances, such as water bill, electricity bill, etc., are divided between the tenants. “In the absence of necessary documentation to cover these expenses, there can be disputes,” cautions Delhi-based lawyer, Ekank Mehra. In case of any dispute, all the tenants may have to vacate the property.
The legal view on sub-letting
According to the law, a tenant cannot sub-let the apartment, without a consent from the owner. “It is always safer to bind the tenancy, even if it is for sub-letting, into an agreement. In such cases, the owner of the property needs to be duly informed and there needs to be an agreement between them too,” Mehra adds.
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