A Rhode Island sublease agreement is a legally binding contract between a current renter of an apartment or home (“sublessor”) and a secondary renter (“sublessee” or “subtenant”). The sublessor uses this agreement to lease their residence to a new party while still complying with their original lease.
Laws & Requirements
Sublease and Assignment Provision Laws: No.
Landlord-Tenant Laws: Title 34, Chapter 18 (Residential Landlord and Tenant Act)
Security Deposit Obligations: Rhode Island law requires the sublessor to return the security deposit within 20 days of the end of the sublease.
Notices: If a subtenant doesn’t pay rent on time, a sublessor must provide them with five days’ notice to pay rent or leave. If a sublessor intends to end the original lease or the sublease, they must inform the subtenant within ten days (week-to-week leases), 30 days (month-to-month leases), or three months (for yearly leases with no end dates).
Permission to Sublet
Rhode Island doesn’t permit tenants subletting rights by default. Instead, they must acquire explicit permission from the landlord:
- Laws: Rhode Island’s statutes do not cover subleasing. Tenants must refer to the original lease to determine if subletting is allowed.
- Explicit Written Consent: The landlord must put their permission in writing unless the lease allows otherwise.
- Landlord’s Rejection Rights: Even if the lease grants permission to sublet, the landlord can reject this right if the landlord believes the new tenant won’t be able to fulfill their financial obligations of paying rent.
Tax Obligations
Sales and Hotel Tax
- Individuals renting rooms or entire houses must pay a hotel tax in addition to regular sales tax (RI Gen. Laws ยง 44-18-36.1).
- The hotel and sales taxes only apply to rentals of 30 days or less. If you rent a room or house for more than 30 days, you won’t be subject to hotel and sales taxes.
Tax Rates by Unit Type
- Tax Rate When Renting a Room: 7% state sales tax and 6% hotel tax.
- Tax Rate When Renting an Entire House: 7% state sales tax and 1% hotel tax.
Filing Frequency
Rhode Island only allows monthly filing for the hotel tax. Hotel tax filers must file a monthly return on or before the 20th day of each month following the end of the month for which the taxes are owed. For example, suppose a hotel tax filer owes taxes for the month of February. They’d have to file their return for those taxes by March 20.
- Filing State Sales Tax: Filers typically file state sales tax monthly, similar to the hotel tax.
- Exception to Monthly Filing of Sales Tax: Taxpayers can apply to the Tax Administrator to acquire permission to file and send sales tax quarterly. However, they’re only eligible for quarterly filing if the sales and use tax liability for six months has averaged less than $200 per month.
- If you file quarterly, your returns will be due at the end of July, October, January, and April. Each return will reflect the activity from the past three months.
Making Payments
- Filing Responsibility: The entity contracting with the public must register, collect, file, and remit the tax collected to the Rhode Island Division of Taxation. Examples of such entities include homeowners, room resellers, and hosting platforms (like Airbnb).
- Tax Permit: Hotel tax filers must apply for a sales tax permit and register online.
- City of Newport: Hotel tax filers in Newport must send the hotel tax they collect directly to the city.
Sample
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