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Sublet vs. Substitution Agreement: Which Option is Right for Your Boston Apartment?

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Boston Apartments Sublet

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When it comes to navigating residential leases, two terms that often come up are sublet agreements and substitution agreements (also referred to as lease assignments). While both involve a transfer of occupancy, they serve different purposes and come with distinct implications. Let’s break down the differences between these two types of agreements, keeping in mind a few key considerations.

Boston is a highly mobile and university oriented city that has tens of thousands of sublet and substitution agreements happen every single apartment leasing season. Many students and young professionals often go on internships and study around the globe which opens up a lot of short term occupancy opportunities that need to be addressed in a professional manner. It is our goal to help you understand all the options and responsibilities that can occur with lease modifications and/or changes.

Sublet Agreements

A sublet agreement occurs when the original tenant (the sublessor) temporarily rents out all or part of the property to another party (the subtenant) while still retaining responsibility for the original lease. In this arrangement, the original lease remains intact between the landlord and the original tenant, and the landlord’s written permission to sublet is typically required. Most landlords in the Greater Boston Area understand and accept subletting. However, it is super important that you read any addendum before singing any lease because there are a few landlords that simply refuse to allow subletting.

Key Features of a Sublet Agreement:

  1. Responsibility: The original tenant remains legally responsible for the lease terms, including paying rent to the landlord. If the subtenant fails to pay rent or damages the property, the original tenant remains liable.
  2. Payment Structure: The subtenant usually pays rent directly to the original tenant, who then pays the landlord.
  3. Temporary Nature: Sublet agreements are often used for a specific period, such as when the original tenant needs to temporarily relocate but intends to return.
  4. Approval Process: Sublet agreements usually require landlord approval, which usually involves the subtenant completing an application, undergoing a credit check, and meeting the landlord’s eligibility requirements.
  5. Deposits: Due to their temporary nature, sublet agreements typically don’t require additional deposits beyond first and/or last month’s rent. This makes sublets a relatively low-commitment option for subtenants.
  6. Fees: In some cases, landlords or their agents may charge a fee for processing a sublet agreement, though this is less common compared to substitution agreements.

Substitution Agreements

A substitution agreement, or lease assignment, involves the original tenant permanently transferring their lease obligations to a new tenant (the assignee). Once the substitution agreement is finalized, the original tenant is released from the lease, and the new tenant assumes all rights and responsibilities under the lease.

Key Features of a Substitution Agreement:

  1. Responsibility: The new tenant becomes solely responsible for fulfilling the lease terms, including rent payments and property upkeep.
  2. Payment Structure: The new tenant pays rent directly to the landlord, creating a direct legal relationship.
  3. Permanent Nature: Substitution agreements are designed for situations where the original tenant does not plan to return, such as relocating permanently or ending their lease early.
  4. Approval Process: Like sublet agreements, substitution agreements require landlord approval. The process often involves the new tenant completing an application, undergoing a credit check, and providing references. However, since substitution agreements create a permanent arrangement, landlords tend to scrutinize these applications more thoroughly.
  5. Deposits: Unlike sublets, substitution agreements usually require the new tenant to take over the original tenant’s security deposit. This ensures continuity for the landlord while protecting the new tenant’s interests.
  6. Fees: Fees are more likely in substitution agreements, especially when brokers are involved. For instance, if the property is listed by a broker, the new tenant may be required to pay a broker fee in addition to the security deposit.

Similarities Between Sublet and Substitution Agreements

While sublet and substitution agreements differ in their nature and implications, they share some common ground when done correctly. Both agreements require a formal application process. The prospective subtenant or new tenant must complete an application, undergo a credit check, and meet the landlord’s requirements for eligibility. Additionally, landlord approval is typically required for both arrangements to ensure that all parties are protected and the lease terms are upheld. A landlord may also charge a processing fee in either case, although such fees are more commonly associated with substitution agreements due to their permanent nature and the potential involvement of brokers.

Key Considerations

When deciding between a sublet agreement and a substitution agreement, it’s important to evaluate the specific circumstances and long-term implications. Sublet agreements are a better choice for temporary arrangements- for example, when a student is going away for the summer months. In contrast, substitution agreements are ideal for permanent transfers, such as when the original tenant is relocating for good. Financial commitments also differ: sublet agreements typically involve fewer upfront costs, making them more accessible for temporary occupants, whereas substitution agreements require the new tenant to take over the original tenant’s security deposit, among other costs. Finally, while both agreements require landlord consent, substitution agreements often involve a more rigorous approval process due to their long-term implications.

Conclusion

By understanding the distinctions and shared requirements of sublet and substitution agreements, tenants and landlords can ensure a smooth transition that meets everyone’s needs. Boston will always have tens of thousands of sublet and substitution agreements happening each apartment leasing season. It’s important that you work with professionally trained and licensed real estate agents that know how to perform these tasks to the highest standards. Whether you’re looking for a temporary arrangement or a permanent solution, clear communication and proper documentation are key to avoiding misunderstandings.

No matter what your needs are, we can help. We have helped thousands of Greater Boston property owners draft both types of agreements over the last two decades, and always have tenants looking for such arrangements. We would be delighted to help you with any sublet or substitution needs. We look forward to working with you.


Demetrios Salpoglou

Demetrios Salpoglou

Published February 5, 2025

Demetrios Salpoglou is the CEO of bostonpads.com which is an information and technology based services company that provides cutting edge resources to real estate companies. Demetrios has developed over 90 real estate related websites and owns hundreds of domain names. Demetrios also owns and operates six leading real estate offices with over 120 agents.


Demetrios has pulled together the largest apartment leasing team in the Greater Boston Area and is responsible for procuring more apartment rentals than anyone in New England – with over 130k people finding their housing through his services. Demetrios is an avid real estate developer, peak performance trainer, educator, guest lecturer and motivational speaker.