A Tennessee sublease agreement permits a tenant currently signed onto a lease to rent part or all of their rental property to another individual. The original tenant is referred to as the sublessor, and the new tenant is called the subtenant. The sublease agreement must be consistent with the outlined terms in the original lease.
Laws & Requirements
Sublease and Assignment Provision Laws: No.
Landlord-Tenant Laws: Title 66, Chapter 28 (Uniform Residential Landlord and Tenant Act)
Security Deposit Obligations: A sublessor must return a security deposit within 30 days of the end of the sublease.
Notices: A sublessor must give a subtenant 14 days’ written notice to pay rent or leave. They can reduce this notice period to seven days if the sublessor has provided duplicate notice within the last six months. Also, a sublessor must provide 30 days’ written notice of their intent not to renew the sublease or the original lease.
Permission to Sublet
- Laws: Tennessee’s statutes don’t address subletting directly, so the landlord and tenant must review their lease agreement for guidance on proceeding with this act.
- Explicit Permission: The tenant must receive the landlord’s explicit permission to sublet in written form. If the lease doesn’t address subletting, the tenant must still seek permission instead of assuming that subletting is acceptable.
- Landlord’s Right to Refuse: If a landlord has already granted written consent, they shouldn’t refuse a subtenant. However, they can refuse a subtenant before granting consent for any lawful reason. For example, the landlord can refuse a subtenant if they believe the subtenant poses a risk to other tenants or the property as a whole.
Tax Obligations
Lodging Taxes
- If you sublet a property for less than 90 consecutive days, you may have to pay a lodging tax (Tenn. Comp. R. & Regs. 1320-05-01-.70).
- Individual cities may also impose local occupancy taxes if the landlord offers the rental through a short-term rental unit marketplace for less than 30 consecutive days (Tenn. Code § 67-4-1404).
Tax Rates
The following taxes apply to short-term rentals in Tennessee [1] :
- State Sales Tax: 7%.
- Local Sales Tax: 1.5 to 2.75% (varies by city).
- State Business Tax: Applies to all rentals less than 180 days.
- Local Business Tax: Only applicable if your specific municipality imposes it.
Filing Frequency
- Sales tax due dates depend on your filing frequency [2] :
- Monthly: The due date is the 20th day of the month after the end of the reporting period.
- Quarterly: The due date is the 20th day of the month after the end of the quarter. It may be the 20th of January, April, July, or October.
- Annually: The due date is January 20th.
Making Payments
- You must typically register to pay sales and use tax and local occupancy tax with the Tennessee Department of Revenue.
- If you host a short-term rental through a hosting platform like Airbnb, you may not need to register and remit taxes. However, it’s your responsibility to thoroughly review your tax obligations to ensure you don’t miss any important details or due dates.
Sample
Related Documents
Rental Application
Screen and vet potential subtenants to determine if they're reliable and can pay rent promptly.
