In my country, me moving out and saying I won't continue to pay, while the contract end date is still far in the future would of course be a breach of the contract. But that doesn't mean the landlord then can let the house sit empty for the rest of the contract time and force me to cover their loss. Landlord would instead have to try and minimize their losses by finding a new tenant, and what I would owe the landlord would be their costs to do so and the time the apartment stood empty.
Edit: "mitigation of damage" might be the US term for it. From Cornell: The mitigation of damages doctrine, also known as the doctrine of avoidable consequences, prevents an injured party from recovering damages that could have been avoided through reasonable efforts. The duty to mitigate damages is most traditionally employed in the areas of tort and contract law. To me that reads like if you want to void the contract, and the landlord doesn't accept a reasonable tenant to take over, the landlord might have to carry their losses themselves. My guess (given laws about renting being very in favor of tenants) is that there most places even might be explicit laws allowing the tenant to do this.
It does sound unfair, but see here for supporting sources https://www.nolo.com/legal-encyclopedia/tenants-right-break-...
Going into court you have no/low knowledge of what your landlord has actually done. If they pull out their ads they posted on the internet or on some zero readership newspaper. The judge will see they have made an effort and you probably are grasping at straws because you have nothing in the way of proof. If you’re lucky, judge would hear some expert testimony (realtor) that says the apartment/market/etc should have been filled within 1-2 months and they feel it’s highly unusual the unit would remain unfilled for 6 months. But even still, if the law says the landlord is required to market the property it might not imply they have to be good at marketing the property. So there’s a grey area where it could go either way, and he can proof that you can’t match.
I've never heard of a landlord not allowing a subletter to convert to a full lease upon original lease expiration.
I mean, the alternative is to forego a month or two of rent while you find a new tenant. Unless there's a horrible problem with the existing subletter's credit, but then they probably wouldn't have gotten the sublease in the first place.
I'm not saying it's never happened, but it's going to be rare. I don't really see anything unsustainable or mispriced about this at all. There are already other companies doing it as well in NYC, e.g.:
In many jurisdictions, including New York, the law requires that landlords allow subleases. Tenants have a lot more rights than you might think.
In NYC, it's usually required for a subletter to take over the remainder of a lease and then have the option of signing a new lease. The option to simply immediately break the old lease and start a new one usually doesn't exist. (Or if it does, it's only with a penalty for the lease-breaker.)
I don't know why this is, however -- if it's for administrative convenience, legal reasons, or financial reasons. But your idea that "the landlord can agree to the transfer of a lease", well it's true they can, but as a general rule they won't.
> We were able to prove that we could make the financials work so long as we were able to fill the apartment within around 45 days of taking it over.
They're prescreening apartments/leases so they're not going to take on an apartment they can't turn around in a month. And honestly, modeling NYC rental supply and demand according to a number of factors (neighborhood, price, condition, amenities, etc.) is pretty straightforward. It's a relatively liquid market.
And like I said, landlords generally have explicit rules about tenant qualifications. They're not going to reject tenants on a whim. Why would they ever say no to a qualified tenant? That's like McDonald's refusing to sell you a quarter pounder.
There's nothing about this that seems obviously unsustainable at all.
I agree with the rest of your comment, but in my experience landlords in hot markets can be pretty capricious. If they know they'll have a steady stream of applicants, many will definitely reject qualified tenants based on personal whims or to hold out for someone they see as "more" qualified or more likely to stay long term. That said, as long as the apartment still gets turned around quickly then it's not really a threat to this business model.
So a better way to phrase the question would be "Why would they ever say no to all qualified prospective tenants?"
Yes they'll sometimes pick the most qualified applicant, but only if you submit your application the same day or same weekend, which is often the case with open houses. It really depends on the landlord however -- for a lot, it's literally the first qualified person to apply, which is why you want to be the first person to the open house and have all your documents ready to apply on the spot, since it might be gone 30 minutes later.
As long as they can find tenants for at least 6/7 (~85%) of their apartments, they're breaking even. Clearly, they think that's an easy target to hit.
(Another way to think of it: one service they provide is amortization of the risk of not filling the apartment over their entire catalog of apartments.)
San Francisco law is that tenants may sublet / add roommates etc. Landlord has 14 days to object. Objection has to be for a good reason. At least that's how I've always understood it.
Can you cite the rule in San Francisco that landlords are under no obligation to allow subletting?
https://sfrb.org/topic-no-151-subletting-and-replacement-roo....
> nothing in the Rent Ordinance allows a tenant to sublet or assign the entire unit to a new tenant in violation of a lease
In San Francisco, once all original tenants have left, landlord can reset the rent to market rate.
So you can sublet through end of your lease (which is what most people want to do). After that, you don't care.
At least with the leases I've signed, if they didn't intentionally fill a vacancy with a decent candidate they would be opening themselves up to some contractual legal exposure
Now, in the midst of a COVID-fueled exodus and wave of unemployment, you might legit be screwed…
(Source: former NYC landlord here)
It's very possible that the service is priced too low in order to get traction, but there's nothing inherently unsustainable about taking on risk (with a reasonable cap no less); it just comes down to what the company's placement rate ends up being.
If someone brought me a tenant with good credit scores, income, and references, there's no way I would turn them down.
Why would they?
I'm clutching my pearls so hard after reading this, I may have uttered a "I do declare..." and wiped sweat from my brow as well. :)
this is like half of all businesses in SV