Offer Tenant Who Illegally Sublets Option to Give Up Apartment

If you’re like most owners who discover that an illegal subtenant is living in a rent-regulated apartment, your first reaction may be to contact your attorney and sue in housing court to evict the tenant. But this course of action doesn’t always make sense. Housing court cases based on illegal sublets take time and can cost a lot. And even if you win, the tenant will usually get the chance to avoid eviction by getting rid of the illegal subtenant.

Instead of immediately seeking the tenant’s eviction, you might choose to offer a surrender arrangement to the tenant after having gathered evidence that the tenant has moved out for good by speaking with the subtenant or hiring a private investigator. Tenants who’ve moved out for good may be more willing to voluntarily give up the apartment. You can then re-rent the apartment to the subtenant as a tenant in his own right. Or you can take steps to get the subtenant out—either voluntarily or by suing to evict the subtenant.

If the tenant voluntarily decides to give up the apartment, it’s important to have the tenant sign a written statement (legally known as a “surrender agreement”) to confirm that he’s giving up the apartment. With the help of New York attorney Niles Welikson of Horing Welikson & Rosen, P.C., we’ve prepared a Model Agreement: Confirm Tenant Voluntarily Gave Up Apartment with Written Agreement.

Why Surrender Agreement Is Important

Without a written surrender agreement from the tenant, you can’t just go ahead and rent the apartment to the subtenant or someone else, even though you’re convinced that the tenant has moved out for good. If you do, the tenant can later sue you, claiming that you illegally evicted him from the apartment. In addition, you might have to pay the tenant damages for this illegal eviction.

By getting a written surrender agreement, you’ll have evidence that the tenant voluntarily gave up the apartment. However, when offering a surrender agreement be sure to not say anything that could be construed as threatening or coercive. The recent amendments to the Rent Stabilization Code provide that an owner may not engage in any course of conduct intended to cause the tenant to waive any right to continued occupancy, points out Welikson [see 9 NYCRR §2525.5]. Therefore, there’s a question of whether soliciting a tenant to sign a surrender would violate that amendment. There will undoubtedly be litigation over that question, but until there are further guidelines it appears that such an agreement can be entered into between the parties as long as the owner merely inquired as to whether the tenant would be interested in this type of arrangement, says Welikson.

What Surrender Agreement Should Say

Like our Model Agreement, your agreement should cover the following points:

State that each party is released from all lease obligations. To be legally enforceable, the agreement should state that both parties are released from their lease obligations. This means that you’re no longer obligated to rent the apartment to the tenant and that the tenant is no longer responsible for paying the rent due under the lease. It also gives you the right to change the locks and rent the apartment to someone else.

State that the tenant has vacated the apartment and has returned the keys to you. This is further proof that the tenant has given up the apartment.

State that the tenant considers any possessions left in the apartment as abandoned. This way, if the tenant has left furniture or other personal items in the apartment, he can’t sue you for their value.

What Happens to Subtenant?

Once the tenant moves out, you have three choices on what to do with the subtenant:

1. Rent apartment to subtenant. Although you don’t have to, you could rent the apartment to the subtenant, making him a tenant in his own right. If the subtenant has a good credit history and can afford the rent on the apartment, this may be a good option as it is less costly than going to court to try to evict the subtenant.

2. Get subtenant to voluntarily give up apartment. If you don’t want to rent the apartment to the subtenant, you can try to get him to voluntarily move out. You can explain to the subtenant that because the tenant has given up the apartment, the subtenant no longer has the right to live there.

3. Sue to evict subtenant. If the subtenant won’t voluntarily give up the apartment, you’ll have to sue to evict him. The law is in your favor. That’s because the subtenant’s right to the apartment depends on the tenant’s. Once a tenant gives up his right to the apartment, the subtenant no longer has the right to stay there.

But be warned that not all cases will be this simple. If you’ve accepted rent directly from the subtenant, he could claim that you gave up your right to evict him. Or the subtenant could claim that he’s a relative or “nontraditional” family member of the tenant’s and so has pass-on rights.