What is a sublease agreement?

What is a sublease agreement?

A sublease agreement is a lease agreement for real estate such as houses, residences, rooms, condos, apartments, etc., between a sublessor and a sublessee.

The sublessor is the person who leases the property under a lease agreement from the original owner or who subleases the property from another party.

The sublessee is the person entitled to benefit from the lease of the property, whether it be residing in or using the property, for a specified period after the sublessor.

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What are the details of a sublease agreement?

Even though a sublease agreement is made with a lessor who is not the original owner of the property, it is still very important to carefully check the facts and conditions of the contract before signing.

This protects against the situation where the sublessee is paying rent as stipulated in the contract, but if the sublessor, who is a party to the contract, does not obtain consent from the original owner, the sublessee cannot claim compensation or sue under Section 545 of the Civil and Commercial Code.

There are also important points to know regarding the termination of a lease agreement. The details are as follows:

1. If a sublease agreement specifies a lease term, upon expiration of that term, the agreed-upon terms and conditions shall be deemed terminated.

2. If the property is completely lost due to earthquakes, storms, floods, structural damage exceeding its original form, or fire, etc., the sublease agreement is terminated immediately and takes effect.

3. A sublease agreement is terminated upon the death of the lessee.

4. Termination of a sublease agreement: In cases where no lease term is specified, both the lessor and the lessee have the right to terminate the agreement by giving at least 30 days' notice.

5. If the lessee defaults on rent payments, the lessor may terminate the sublease agreement by giving at least 15 days' notice and specifying a payment due date.

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Relevant Laws on Sublease Agreements

According to the Civil and Commercial Code concerning the lease of real estate or buildings, a lessee must obtain the lessor's consent before subleasing the property to another party who owns it. Otherwise, the lessee shall be considered in breach of the lease agreement. The landlord has the right to terminate such lease agreement.

Generally, the laws governing building leases or real estate leases, particularly regarding subleases, are enforced as follows:

1. The Civil and Commercial Code stipulates that there must be written evidence or a contract signed by both the sublessor and the subtenant.

If a registered building or real estate is subleased for a period exceeding 3 years, both parties must register the lease agreement with the Land Department using the format prescribed by law.

Information regarding registration with the Land Department can be found here. Registration can be done at the land office where the leased building is located.

2. In cases where the building or real estate is constructed for residential purposes, the sublessor, who is considered a business operator renting out buildings for residential use, must comply with the Announcement of the Committee on Contracts regarding "The Regulation of Contracts for Residential Building Leasing Businesses, B.E. 2562 (2019)".

This announcement specifies that if the sublessee is an individual, they must comply with the requirements of the announcement, such as using the prescribed contract format and wording, sending invoices, collecting advance rent, limiting the security deposit amount, and ensuring the leased building meets the specified requirements. These conditions must be strictly adhered to.

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Sublease Agreement Procedures

Signing a lease, whether it's a sublease or a lease with the property owner, is equally important.

Currently, housing rentals come in various forms, often depending on the environment and financial situation. Subleasing is a viable option that can effectively meet modern lifestyle needs, such as for students needing dormitory accommodation or for professionals in various fields. Here's how:

1. Thoroughly review and examine the contract before signing. The sublessor has the legal right to sublease the property. The sublessee can verify this through ownership documents or consent from the property owner.

2. Photograph the subleased property on the day the contract is signed or handover is received as evidence.

3. Both parties sign the sublease agreement in the presence of witnesses.

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(Thank you for the information from DD Property)