Subleases in the Commonwealth of Massachusetts: A Complete and Comprehensive Guide

What is a Sublease?

A sublease agreement is a legally binding contract in which the original lessor or "sublessor" creates a lease with a person other than the original lessor or landlord. In simpler terms, the new tenant is now obliged to pay rent from the original tenant to the sublessor. This subtenant cannot take action against the original lessor unless it is part of the original lease agreement. This type of leasing arrangement replaces the initial lease between the landlord and the first tenant, but not the terms of the lease or the contract between the first tenant and the landlord.
The sublease is more common in business leases than residential leases, although residential leases certainly do accommodate for it as well. To use the sublease, the original tenant must have permission from the landlord, which is often granted through a clause in the primary lease agreement.
For example, let’s say you have signed a 10-year lease agreement for a prime office space at a great price. Two years later, you realize that your business is no longer capable of handling that space , and you are considering a sublease to bring in some money and move somewhere smaller. Your lease agreement is flexible enough to allow for sub-leasing to other tenants in the building. You post an advertisement for the space, and a business contacts you about the open space.
After a set period of time, you have found an interested subtenant for the space. In your original contract, it stated that any sublease needed to be approved by the landlord. You would contact the landlord and ask for them to approve the sublease, so you can move on. Your lease agreement states that the landlord can either approve or deny the second lease and cannot be held liable for any resulting issues.
The new tenant is moving into the sublease agreement, where they will pay you, the sub-lessor. Once the lease is signed, the relationship you developed with your landlord will continue. The new subtenant will be responsible for the obligations stated in the lease. All of the obligations you had as the first tenant will still exist and you are still responsible for them. You can’t force the new tenant to take action against the landlord, even if you both agree it should be done. You are still responsible for the primary lease agreement.

The Legal Requirements of Subleasing in Massachusetts

Before you begin the process of looking for a tenant for your apartment in Massachusetts, you must first make sure that you are in fact allowed to sublease your apartment. Again, here, Massachusetts law is that a lease must allow for subleasing in order for you to have the right to sublet your apartment. If you are unsure as to whether or not subleasing is allowed in your apartment, the best practice is to contact a legal professional who has experience in residential leasing in the Commonwealth – this way, you can avoid violating such a lease provision and face any potential penalties therein. Assuming that your subleasing is permissible, you now have the right to sublet your apartment in Massachusetts under the following conditions: (1) written notice to your landlord; (2) acceptance of the "demand" to your tenant if a demand is required by the lease; and (3) the same terms and conditions as the master lease. From here, the home rule authority for the municipality you live in is key in determining whether a sublease is permissible from a regulatory standpoint. While the majority of towns and cities do permit subleasing as long as the above terms are abided by, customary regulation such as zoning laws may limit the scope of this practice. The formal legal process for subleasing in Massachusetts is set forth in the governing statute, M.G.L. c. 186 s. 13: "Any person claiming under a lease of real estate for a term not less than 12 months shall be entitled after three years’ possession thereunder… to assign in writing his interest under such lease, and others claiming under him, so far as he or they could have done in the cases above described." Because your right in the property – title – is limited to the terms of such lease, you may only sublet for the remaining period of the lease. Lastly, you are responsible for any damages your tenant causes to the home or apartment, so keep a friendly line of communication with your tenant open and do not assume you will not be responsible for the damage your tenant does to the property.

Tenant and Subtenant Rights and Obligations

When a tenant in Massachusetts subleases or sublets all or a portion of a rental premises to another person, said person is called a subtenant or sublessee. Until 2010, under Massachusetts General Laws Chapter 139, Section 15A, a tenant had the same rights and responsibilities under a sublease agreement as he would as a landlord. In practice, however, tenants did not always follow the law. They told sublessees to pay their rent directly to them rather than to the landlord. They failed to turn over a security deposit to the sublessee. And worst of all, they evicted subtenants without paying them any compensation.
The law was changed in 2010, when the Massachusetts Legislature deleted Chapter 139, Section 15A. Now the rights and responsibilities of subtenants differ from those of typical tenants. The following is a summary of their new status:
By exempting subtenants from many of the laws that apply to landlords, Chapter 186, Section 15C leaves them vulnerable to hungry and angry landlords. It is highly recommended that subtenants enter into written agreements with the tenant clearly setting forth their rights and obligations.

How to Draft a Sublease

Creating a valid sublease is a five-step process:

• Review your rights and obligations under your lease. Most leases (unless it’s a sublease itself) will have a provision that discusses subleasing and may have requirements as to how you must request the right to sublease. Some leases prohibit subleasing entirely or allow the landlord to collect an additional fee if you do so.
• Draft a sublease agreement. Sublease agreements should include similar provisions to those of a standard lease. In addition to the name and address of the parties, the subtenant and sublessor, the address of the premises, the duration of the sublease, the rent, and the purpose for which the premises are being leased, the sublease should also address with clarity:
• Notify your landlord. Again, most leases have a provision concerning your legal obligation to notify your landlord in advance of the sublease – so make sure to provide whatever notice you’re required to provide. In addition, your landlord may be legally required to approve or disapprove the proposed sublease.
• Execute the sublease agreement . Like any other contract, a sublease agreement is not binding on the parties until it is executed (signed).
• Provide a signed copy of the sublease to your landlord. Again, this may be required under the lease.

If you’ve completed steps 1-5, the sublease is now ready to be executed. Once executed, the sublease cannot be severed from the original lease; leasing the premises will always be a complete package. A new covenant to pay rent arises from the sublease, however, and the subtenant’s covenant is independent from that of the original lessee. To put it another way, if the subtenant fails to pay the rent owed under the sublease, the subtenant alone can be required to pay; the original lessee or sublessor cannot be forced to pay. Additionally, the sublease may include covenants that the original lease does not — for example, a covenant to pay for utilities or repairs — and those covenants may be enforced against the tenant without regard to those in the original lease.
If you have questions regarding sublease agreements, your obligations as a tenant under your lease agreement, or drafting a lease or sublease agreement in Massachusetts, please contact us.

Common Issues and How to Handle Them

Subleasing arrangements can be complicated by several practical issues. The following is a list of some of these issues, followed by possible solutions. First, the tenant may find himself or herself without a sublease agreement if the subtenant becomes a proposed tenant under a lease. This problem occurs most often when a tenant allows the subtenant to move into the leased premises without preparing a sublease agreement "just to cover things until the tenant decides on the final terms of the sublease." Such month-to-month arrangements can lead to serious problems, as the question of whether or not the landlord approved of the agreement is highly contested. If the subtenant is a tenant under a lease, the original tenant is not a tenant, but rather becomes a licensee with a month-to-month license from the subtenant, who may terminate that license at any time. Without a sublease in place that the landlord has approved, the subtenant may elect to terminate the sublease and evict the tenant, leaving the original tenant without a lease, and possibly without a place to live. To avoid this problem, landlords should insist on always having a lease in place, even for short-term leases.
Second, the tenant who subleases to another tenant must always be aware of the terms of the underlying lease. This is especially important if the tenant is authorized to sublease under the lease agreement itself. The terms of the lease may require that the subtenant also be a resident of Massachusetts, if the tenant is an individual and not a corporation. As discussed previously, subleasing to a person other than a resident of Massachusetts is prohibited and could result in the lease being voidable by the landlord because a condition precedent (namely, being a resident) was not satisfied. The terms of the lease may specifically prohibit the tenant from subleasing to another tenant, or it may require the tenant to obtain the permission of the landlord before subleasing. If the lease is a standard one, it probably contains a paragraph allowing the tenant to assign the lease, but only upon the receipt of written permission from the landlord, without which assignment could constitute a breach of the lease. Further, the underlying lease may contain a clause prohibiting the lease from being assigned, thus requiring the subtenant to vacate the premises.
Subleasing to a subtenant who is a person other than a resident of Massachusetts may also have tax implications. Under G.L. c. 62C, §:2, Massachusetts requires all nonresident owners of real property to appoint an agent to collect rental payments on the property; the failure to do so creates a withholding requirement equal to 100% of the rental funds. This withholding requirement also generally applies to tenants who own Massachusetts real property. If the tenant who subleases to a nonresident is an individual, that individual may not wish to serve as the agent for the nonresident subtenant, and to avoid being the agent, the tenant must provide the Massachusetts Department of Revenue with written notice of the failure to appoint an agent within 30 days of the first rental payment. This notice must be signed and accompanied by a $50 filing fee.

Helpful Resources for Subleasing

There are a number of resources for both residential and commercial subleasees in Massachusetts. Legal Services and Bar Associations work hard to keep the public informed about the subleasing process through informational brochures and websites. Additionally, there are a number of free legal information presentations and advice clinics offered throughout the state by local Bar Associations. There are also a number of templated forms that can be easily found online and adopted by tenants and landlords in a subleasing situation.
In some cases , participants in a Massachusetts sublease agreement may qualify for assistance from local non-profit organizations or pro bono legal organizations. A great source for finding legal-aid resources is found at MassLegalHelp.org, a collaboration of legal-aid organizations and the Massachusetts Court System. There you will find a resource for legal aid for tenants in Boston and the rest of Massachusetts through the Boston Bar Association. There is also a subleasing advice clinic in Boston for tenants which can be accessed at the Massachusetts Bar Association site through massbar.org.