Understanding subleases in Chicago: an ultimate guide

What Is a Sublease Agreement?

Simply put, a Chicago sublease agreement is a contract that allows a tenant to lease out or rent a rental property to a subtenant, also known as a third party. If a tenant to a Chicago residential lease agreement wishes to move out of the unit before the lease term ends, and they do not wish to pay continued rent after their tenancy ends, then they may consider subleasing the property to a new person or persons.
Subleasing is slightly different than renting a property from a landlord in that the tenant who wishes to leave the property needs to legally sublease the property to a new tenant through an official sublease agreement. If the tenant wishes to leave , but does not wish to enter into a legal relationship with a new tenant, then they can simply pay rent for the remainder of the lease term. However, tenants often wish to sublease properties in Chicago as a way of legally transferring primary responsibilities and responsibilities for the unit to another party. The other party must reside in the property; otherwise, it is considered a breach of the agreement and may incur legal consequences.

Chicago Sublease Laws

Subleasing in Chicago is primarily governed by both Chicago Municipal Code § 5-12-010 and the Illinois Residential Landlord Tennant Act, 765 ILCS 705. It is important for you to be aware of how these two ruling bodies impact your prospects for subleasing your apartment.
The City of Chicago has strict requirements that owners must follow in order to legally sublease their apartments. For example, the City of Chicago requires owners to utilize a written form lease when a tenant intends on subleasing their apartment. Additionally, tenants are required to give advance notice to the owner prior to allowing individuals to move into the apartment.
The Illinois Residential Tenant Landlord act states that tenants can only sublease their apartment with permission from the lessor. Failure to obtain permission can result in the termination of the tenancy and an expedited court proceeding to seek possession of the unit. Tenants have no right to a monetary compensation for denying a sublease.

Tenant and Subtenant Rights and Obligations

Under a sublease agreement, a tenant retains all of her responsibilities for the lease agreement entered into with her landlord. These responsibilities include making payments to the landlord, abiding by any house rules, and complying with the regulations set out in the original lease agreement.
The subtenant who occupies the apartment by way of a sublease arrangement, however, is not in a direct relationship with the landlord. She does not have a direct duty to meet the terms and conditions of the lease agreement unless the agreement specifically contains a section making that point explicit. In most cases, a landlord will want the subtenant to be bound by the same rights and responsibilities that are contained in the original lease agreement so that the original tenant is not able to avoid those responsibility by moving the property and avoiding paying rent on the original lease agreement.
Generally, a tenant is required to give notice to her landlord if she wishes to sublet her apartment. This notice allows the landlord to purchase the tenant’s right to object to a sublet by paying a certain amount of the costs associated with the sublet. If the landlord has not indicated in writing that he refuses to consent to the sublet, then the tenant can proceed with the sublet, even if the apartment was initially rented pursuant to recent lease and sublet rules.

How to Create a Chicago Sublease Agreement

Drafting a Chicago sublease agreement requires careful consideration of the Lease. In simple terms, a tenant cannot sublet without first checking the written lease agreement to determine whether subleasing is allowed and, if so, any conditions that apply. Even if there are no special requirements in the Lease, Illinois law requires the principal tenant to obtain the written consent of the landlord in order to sublet.
Assuming the Lease allows or provides for a sublet and/or the landlord has given written consent, the principal tenant is ready to draft the sublease agreement. A Chicago residential or commercial sublease is like a regular Chicago lease agreement in that it contains terms setting forth the rights and obligations of each party. It is best to review sample forms for subleases before drafting your own agreement.
Typically, a sublease agreement will contain the following provisions: Once satisfied with the form of sublease agreement, the principal tenant and the subtenant will execute the document. If the sublease agreement was created without the landlord’s consent, the principal tenant should prepare a second document addressed to the landlord requesting its consent to the sublease. Once the landlord consents, the subtenancy is, effectively, on the same terms and conditions as the original tenancy. The principal tenant and subtenant will then be bound to follow the terms of the written agreement and sublease is, effectively, a lease agreement.

Setbacks That May Arise, and Some Solutions

While some of the sublease relationship dynamics may be fully addressed in the sublease agreement, many issues can and will arise. A variety of issues can occur, including disagreements between the original tenant and the subtenant and disagreements between the subtenant and landlord.
Disagreements Between Original Tenant and Subtenant
Conflicts between the original tenant and the subtenant can run the gamut from large-scale issues such as whether the subtenant damaged the premises to small issues like who will take care of minor repairs. If the original tenant is unhappy with the subtenant’s performance in living up to the terms of the sublease, the original tenant can terminate the sublease with proper notice and justification.
The original tenant has the right to recover property that was attached to the agreement. One issue that commonly arises has to do with security deposits. The original tenant may have the right to be repaid the security deposit. The subtenant may have to leave behind sufficient funds to cover any damages. If the original tenant sues , he may be able to recover attorneys’ fees.
Disagreements Between Subtenant and Landlord
While you would hope that issues between the landlord and subtenant would not exist, Chicago law does not afford protections between these two parties. The subtenant is paying rent to the original tenant and the original tenant is paying rent to the landlord. This third-party scenario leaves the subtenant very few protections and puts him or her at risk for eviction.
When the original tenant has violated the primary tenancy agreement and is facing eviction, Chicago’s laws regarding protection against retaliation do not protect the subtenant from actions by the landlord.

Advantages and Disadvantages of Subleasing

The most significant benefit of entering into a sublease agreement for both tenants and subtenants is the financial savings involved. Tenants frequently enter a sublease arrangement to escape an economic burden. They no longer have to pay rent, while hopefully still benefitting from a subtenant that pays a reasonable cost. Subtenants have a tremendous savings compared to either entering their own lease or searching for a place in the area. Often, subtenants can find an apartment identical to what they were looking for at half the price in rent.
However, problems can arise with a sublease that can be quite different for tenants and subtenants. For example, the subtenant is further removed from the landlord, and is often unaware of the rules that governed the original tenant’s relationship with the landlord. This can cause conflict between tenants and subtenants, as the original tenant must enforce the rules of the lease without the backing of the landlord, who may be uninterested, if not unaware of the subtenant’s presence.

Finding and Screening Subtenants in Chicago

When it comes time to find a subtenant for your Chicago apartment or home, it’s important to have a solid plan of action for both finding your future subtenants, and properly vetting them to ensure they are compatible with your situation and financial reliable.
Classified Real Estate Boards – You can always start by taking out ads in local real estate classifieds that cater to sublets or subleases. While you will pay for the advertising space, the ads will generally be seen by residents familiar with your area and need housing. The targeted approach of a real estate classified ad makes it the preferred method of finding subtenants, but it might take several days for you to receive responses — and submitting a single ad may not yield results.
Traditional Marketing – If you have the resources, and you want to appeal to a wider market, consider advertising in local newspapers or on online classified services. Again, this can be costly, and many people that would respond to a newspaper advertisement aren’t interested in entering into a sublease agreement within the immediate future. However, if you find a suitable subtenant through one of these routes, you have the benefit of knowing that they were persistent to the point of taking action after seeing your ad — this could be a good sign that they are a responsible person.
Social Media – Within recent years, social media has become an extremely effective means of targeting subtenants . If you rely solely on social media services to find a subtenant, you will be limited to the number of people you know on those specific networks. If you cast a wider net by asking your friends to share your message, and your friends’ friends, the collective effort can produce a pool of prospective subtenants fast.
Roommate Finder Services – These services will operate in a manner similar to traditional real estate services, recommending properties that fit the subtenant’s needs and placing advertisements in front of potential subtenants.
Just like any other tenant, you have a variety of methods to vet prospective subtenants to make sure they are a good fit for your home. While traditional methods like credit checks, reference checks, and employment verification are expected, and the obvious choice when choosing a new tenant, there are other factors to consider — selling points that can assist in finding the right tenant for your Chicago sublease.
Change of Scenery – When looking for subtenants, remember that they are likely just as invested in the process as you — they are interested in finding their dream home as much as you are interested in finding the perfect subtenant. Highlight different things about your property that separate it from the others: maybe you’re overlooking a park, near a beach, or have renovated a portion of your home to create a beautiful seating area in a corner. Each tenant will have their personal preference, and you will be able to find a good mix of tenants that enjoy different aspects your home most.