• Reletting is a rental or leasing agreement where an old tenant finds another tenant to take over their lease and make a new lease agreement with the landlord.
• There are many reasons reletting happens, but relocation, military service, or financial trouble are common reasons.
• Reletting is different from subleasing, which allows a tenant to lease all or part of their rented property to another tenant; and from a lease assignment, which assigns the obligations of the lease agreement to another.
• In many cases, reletting is a less costly alternative to breaking the lease early, which comes with hefty penalties.
• In some areas (or depending on the lease agreement), reletting charges or lease termination fees may be imposed on the tenant who’s leaving.

Reletting is a process where an existing tenant finds another individual to take over the lease. Essentially, the original tenant is stepping out of their responsibilities, and the new tenant will create a new lease agreement directly with the landlord. This new tenant also pays rent directly to the landlord[1].

Reletting is a common exit strategy when the first tenant needs to move out suddenly and doesn’t want to pay the fine for breaking the lease. Sometimes, tenants who can’t fulfill their lease obligations also use them as a last resort. Either way, reletting lets them find someone else to handle the rent payments for the rest of the lease period.

While a state or county may not prohibit reletting, they may have specific regulations and requirements[2] that can affect the process. In any case, the landlord must approve the reletting before the tenant can undertake the steps toward reletting. Once this is done, the original lease agreement is dissolved, and the landlord forms a fresh lease with the new tenant.

However, if the landlord fails to find a suitable tenant before the old tenant leaves, the old tenant may still have to pay rent[3].

Reletting generally goes through four primary steps. Here’s a more detailed breakdown:

• The original lease. In this case, the original tenant (who wants to move out) approaches the landlord and explains the situation. The landlord then agrees to allow the tenant to relet the apartment, which means the tenant is responsible for finding a suitable replacement to take over the lease.
• Finding a new tenant. The tenant then needs to find a new tenant who will agree to the terms and conditions of the landlord. This can be a difficult process because the new tenant has to pass the landlord’s screening process, which may involve background checks, credit checks, and other such considerations. The existing tenant often assists in finding this new tenant, as they have a vested interest in finding someone to take over the lease.
• The new lease. Once a new tenant is found and the landlord approves them, a new lease agreement is made between the new tenant and the landlord. This is not an assignment of the existing lease but rather a completely new lease.
• The original lease is dissolved. Once the new lease is signed, the original lease between the old tenant and the landlord is typically dissolved. The original tenant’s responsibilities end here, and they can move out without any further obligations.

This process may vary based on jurisdiction or the specifics of the original lease agreement. Some leases have certain clauses regarding reletting, so tenants should always read their lease thoroughly and understand its terms before proceeding with reletting.

Keep in mind that even with reletting, the original tenant may still bear some responsibilities depending on the terms of their original lease agreement. In many cases, landlords require the original tenant to pay a reletting fee or any unpaid rent until a new tenant is found. If the new tenant defaults, the original tenant can be held responsible unless stated otherwise in the lease agreement.

Reletting is a good choice if the first tenant plans to move out for a long time or permanently before their lease ends, freeing them from the original lease agreement’s financial and legal obligations.

Note that the first tenant is still responsible for the unit’s upkeep and rent, among other fees, if they are on a double- or triple-net lease agreement while the landlord or the property manager (or even the old tenant themselves) is searching for a suitable replacement[4].

Note that different states have different requirements[5] on which party is duty-bound to look for a replacement tenant; in Michigan[6], for example, the landlord must make reasonable efforts to find a replacement. Meanwhile, in Florida[7], landlords or property managers aren’t required to do anything.

Reletting a rental is often a safer alternative for a tenant who wants to vacate a rental property without breaking the lease, where they’re leaving the property before the lease is up. Breaking a lease usually results in stiff penalties.

Reletting can often be a more cost-effective solution than breaking a lease. Although reletting involves its own costs, it can prevent the heavier penalties associated with prematurely breaking a lease.

Also, military servicemen are exempted from paying penalties for breaking a lease early thanks to the Servicemembers Civil Relief Act (SCRA)[8], provided they give advance notice to their landlords.

Reletting shares some similarities with other rental strategies, discussed below.

Reletting vs. Subleasing

Reletting is often confused with subleasing. One reason is that subleasing is also known as subletting, especially common in British English usage[9].

In a nutshell, subleasing is an arrangement where a tenant leases all or part of their rented property to a third party, while reletting is where a tenant’s lease agreement is dissolved and a new one is made with another tenant.

In subleasing arrangements, the original tenant retains some responsibility for the lease. It’s beneficial for temporary absences and planned returns. Reletting, on the other hand, frees the original tenant of all obligations, which makes it the go-to option for permanent relocations.

Reletting vs. Lease Assignment

Lease assignment is another option where a tenant transfers their entire lease to a new tenant.

The main difference between reletting and lease assignment is in the lease agreement. The original lease agreement remains in effect in a lease assignment, just transferred to a new tenant. On the other hand, reletting dissolves the original lease agreement, and a new one with a new tenant begins.

Here are some common questions about reletting.

What Are Typical Fees Involved in Reletting?

Some lease agreements may contain clauses regarding lease termination and reletting charges, which a tenant should pay when breaking their lease early and reletting, respectively. In most cases, these aren’t mutually exclusive[10]; the tenant usually pays for both in lease agreements where such clauses are present.

There is no clear-cut list of which states or jurisdictions allow these charges. However, Texas, for example, explicitly allows the landlord to charge a reletting fee of about 85% of one month’s rent[11].

Reletting fees are typically imposed by landlords or property management companies when a tenant chooses to relet their unit. These fees can cover various administrative costs associated with reletting, such as finding and screening new tenants.

Meanwhile, lease termination charges, or early termination fees, are typically assessed when a tenant ends their lease before the agreed-upon lease term. These charges are designed to compensate the landlord for the inconvenience and potential lost rent caused by the early termination.

RELATED: Road to Renting: Rental Property Marketing Guide

How Does Reletting Affect Your Credit Score?

Reletting itself doesn’t directly impact your credit score.

However, if the process of reletting isn’t correctly handled and leads to a violation of the original lease agreement, it can potentially harm your credit score. Late payments or an eviction on your record can have a significant negative effect.

What Happens If the New Tenant Doesn’t Pay Rent?

The original tenant is completely released from the lease obligations after the new tenant signs the new lease. If the new tenant fails to pay rent, the responsibility falls on them, not the original tenant.

Does Reletting Require a New Lease Agreement?

Yes, reletting requires a new lease agreement.

The original lease agreement is terminated when the property is relet, and a new agreement is signed between the landlord and the new tenant. This new agreement outlines the terms and conditions of the lease specific to the new tenant.

Reletting, like any real estate strategy, has benefits and drawbacks. Understanding both sides can help tenants and landlords make more informed decisions.

Pros

• Release from lease obligations. The most significant benefit of reletting is that it releases the original tenant from all lease obligations. This is especially useful for those who need to move out before their lease term ends.
• Avoids penalties. Reletting helps avoid the financial penalties often associated with breaking a lease early.
• Potential for financial savings. Though there are costs involved in reletting, they can be significantly less than the expenses of maintaining a lease on a property you’re not using.
• Flexibility. Reletting offers flexibility to tenants, allowing them to adapt to lifestyle changes or sudden relocations due to job changes.

Cons

• Dependent on landlord’s consent. One of the most significant drawbacks is that reletting depends on the landlord’s consent. If a landlord refuses, tenants may have to explore other options.
• Potential costs. There can be financial costs associated with reletting, such as a reletting fee charged by the landlord and advertising the property to attract new tenants.
• Finding a reliable tenant. The responsibility of finding a new tenant who is reliable and can meet the lease obligations typically falls on the current tenant, unless otherwise noted on the lease agreement. This process can be time-consuming and stressful.
• Potential rent difference. If the new tenant negotiates a lower rental price, the original tenant may have to cover the difference until the original lease term ends[12].

1. FindLaw Staff. (2021, November 23.) What is the Difference Between Subleasing and Reletting? FindLaw. Retrieved from https://www.findlaw.com/realestate/landlord-tenant-law/what-is-the-difference-between-subleasing-and-reletting.html
2. What is Subletting and How Does it Work? (2020, July 20.) Neighbor Blog. Retrieved from https://www.neighbor.com/storage-blog/what-is-subletting-and-how-does-it-work/
3. What’s the Difference Between a Lease Termination Charge and a Reletting Charge? (Comparison). (2023, June 4.) AllTheDifferences. Retrieved from https://allthedifferences.com/difference-between-a-lease-termination-charge-and-a-reletting-charge/
4. Jamieson, S. (2020, July 23.) What is the Difference Between Subletting and Reletting an Apartment? SwampRentals. Retrieved from https://www.swamprentals.com/help-finding-apartments/difference-between-subletting-and-reletting
5. O’Connell, A. (2022, January 26.) State Laws on Landlord’s Duty to Rerent When a Tenant Breaks a Lease. Nolo. Retrieved from https://www.nolo.com/legal-encyclopedia/landlords-duty-to-rerent-when-a-tenant-breaks-a-lease.html
6. Fox v. Roethlisberger, 85 N.W.2d 73. (Mich. 1957.) Justia. Retrieved from https://law.justia.com/cases/michigan/supreme-court/1957/350-mich-1-2.html
7. Termination of rental agreement. (2019, January 1.) Florida Statutes Title VI. Civil Practice and Procedure § 83.56. FindLaw. Retrieved from https://codes.findlaw.com/fl/title-vi-civil-practice-and-procedure/fl-st-sect-83-56.html
8. Military Clause: Terminate Your Lease Due to Deployment or PCS. (2021, August 25.) MilitaryOneSource. Retrieved from https://www.militaryonesource.mil/deployment/pre-deployment/military-clause-terminate-your-lease-due-to-deployment-or-pcs/
9. Colacino, M. (2020, June 15.) Sublet vs Sublease: What Is The Difference? SquareFoot. Retrieved from https://www.squarefoot.com/leasopedia/sublet-vs-sublease/
10. What’s The Difference Between A Lease Termination Charge Vs Reletting Charge? (n.d.) Gambrick. Retrieved from https://gambrick.com/whats-the-difference-between-a-lease-termination-charge-vs-reletting-charge/
11. Ending your lease (Termination). (n.d.) Texas Tenant Advisor. Retrieved from https://www.texastenant.org/moving-out-1/ending-your-lease-termination
12. Thorsby, D. (2023, February 16.) How to Break Your Apartment Lease. U.S. News. Retrieved from https://realestate.usnews.com/real-estate/articles/how-to-break-your-apartment-lease