Ask An Expert with Barry McGuire

I have a house rented in Edmonton, and when I went to do an inspection I found out that they had rented the basement to someone else. We gave them the opportunity to submit an application and have decided that they can stay. When I spoke to the landlord and tenant board, they suggested I not put them on the lease but leave them the responsibility of my tenant. They suggested I draft a letter stating that I would allow them to stay. What else should I include and is this the best way for me to protect myself. Yes, I know I can evict them but I have chosen to let them stay.

Before answering your question it is probably best to look at the rules surrounding subleasing in Alberta.

The best place to start looking for answers to this situation is in the legislation that governs landlord and tenant matters – that is the Residential Tenancies Act (Act). NOTE: Clause (3) deals with leases in Banff National Park which is not relevant to this discussion and therefore omitted.  S.22 of the Act states:

 (1) Subject to subsection (4), no assignment or sublease of a residential tenancy agreement by a tenant is valid without the written consent of the landlord.

(2) A landlord shall not refuse consent to an assignment or sublease unless there are reasonable grounds for the refusal.

 (4) If a landlord does not respond to a request for a consent within 14 days after receiving the request, the landlord is deemed to have given consent.

(5) A landlord who refuses to give consent shall provide the tenant who requested consent with written reasons for the refusal.

(6) A landlord shall not charge a fee or other consideration for giving consent to an assignment or sublease.

The following excerpt is from the Landlord and Tenant subsection of the Service Alberta (Provincial Govt.) website and basically repeats what the legislation says:

Sublease or Assignment:

A tenant cannot sublease or assign the residential rental premises to someone else without the landlord’s written consent. A landlord may not refuse permission without reasonable grounds and must give the tenant their reasons in writing within 14 days after receiving the request. If the landlord does not answer the request within 14 days, the tenant may assume that the landlord agrees to the sublease or assignment. A landlord may not charge a fee for giving consent to a sublease.

The first thing to note is that a landlord cannot refuse an assignment or sublease without reasonable grounds. Therefore, it is not correct to say, “Yes, I know I can evict them…” because you agreed to accept the sublease and, presumably you had no reasonable grounds for refusing.

Next, I agree with the Landlord and Tenant Advisory Board when they said not to, “put them on the lease”.  If you did that there would be an argument that you had agreed to release the original tenant from any further responsibility and to accept the sublease tenant in the place of the original tenant. You are better off to have your original lease still in place which is enforceable and ensure a proper sublease document is put in place with the sublease tenant. That way if things go badly, the nature of a sublease is that you can firstly look to the sublease tenant.  If you cannot collect or solve your problem with the sublease tenant, you still have the original tenant to fall back on. Note that in a sublease situation the original tenant plans to come back to the property and continue with their original lease. In an assignment situation the original tenant is not coming back to the property and the assignee tenant takes over full responsibility with the original tenant having no further responsibility.

You mentioned sending a letter to your sublease tenant indicating you would allow them to stay.  I’m not sure that does any good legally speaking.  However, on a practical basis it might be a great idea because in the letter you would perhaps introduce yourself, set out your expectations for your new sublease tenant and make sure everyone understands the terms of the sublease and your expectations for the sublease tenant.  Remember the sublease is between the original tenant and the sublease tenant so I would seriously consider making sure your original tenant uses your form of lease or that the sublease adds your lease as a schedule and has some connecting words with the original lease.  Make sure that the sublease tenant has to live up to the same leasing conditions and rules and regulations as did your original tenant.  If your original tenant and sublease tenant do not want to do that I believe that would be grounds for refusing consent to the sublease. Why should you have to accept a sublease tenant unless it is on at least the same terms as your original tenant?  NOTE TO ALL READERS:  Landlord and Tenant Legislation is provincially regulated so these comments are for Alberta only. You must check your own provincial rules regarding subleasing.

Barry McGuire is a veteran real estate lawyer, investor and best-selling author, based in Edmonton, Alberta. His Focus Series Workshops are well received by his students and his strategies and money saving advice put dollars into the pockets of the investors that use them.  You can reach Barry at B.McGuire@rmlo.com.

{{cta(‘a2f69965-cbaf-4089-8592-d93ceeef8740’)}}