What If Sublessor Dissapears? – Law In A Minute

Once Upon a Sublease: The Hansel and Gretel Rent Debacle

Once upon a time, in the land of expats and quirky rental tales, I became the go-to sage for housing woes. You see, it turns out that many of my fellow foreigners had been playing house—quite literally—through a housing agent or a sublessor, mainly because the local landlords seemed to have a ‘No Foreign ID, No Deal’ policy.

So, in the spirit of community service, I crafted a story from the concrete jungle of Shanghai to illustrate the predicament and its possible escape routes.

Hansel, a fresh-faced grad with a diploma still warm from the printer, had ventured into the bustling world of Shanghai. Fortune smiled on him, and he snagged a gig at Lu Jia Zui, earning a sweet 13,000 RMB every moon cycle.

Now, Shanghai is a curious mix of the old and the towering new. The old homes, snug in the city’s belly, are under the watchful eye of endearing grandpas who’ve seen more seasons than the trees in People’s Square. These wise old guardians found renting out their sprawling houses as tricky as threading a needle in a Shanghai downpour. So, they turned to the sublessor—part wizard, part real estate ninja—who transformed these homes into a warren of charming, albeit snug, apartments.

Each story, about 100 square meters of prime Shanghai real estate, was split into two 50 square meter abodes. These little kingdoms came complete with two bedrooms, a washroom, a living space, and an ‘open kitchen’—a poetic term for ‘don’t even dream about a gas stove.’

For a monthly tribute of 10,000 to 11,000 RMB, couples like Hansel and his dear Gretel could pretend they were the emperor and empress of their personal mini-castle. But let’s do some arithmetic: three stories up equals six apartments, and our sublessor collected a hefty 60,000 to 65,000 RMB while paying the grandpa landlord a mere 40,000 RMB. That, my friends, is what we call a lucrative game of Monopoly.

But lo and behold, half a year later, there came a knock-knock-knocking on Hansel and Gretel’s door. It was none other than the grandpa landlord, bearing the news that would make their rental dream crumble like a poorly baked mooncake. The sublessor had turned into a rent-evading phantom, and grandpa was not amused.

With the threat of eviction hanging over their heads like a bad Chinese New Year decoration, what in the world could Hansel and Gretel do?

Law In A Minute

Hansel and Gretel have the option to pay their rent directly to the landlord.

Given that the landlord is aware of the sublease arrangement and both rental agreements are legally enforceable, the Civil Code permits the tenants to make payments directly to the landlord, thus allowing them to continue residing in the apartment.

However, if the landlord is uninformed about the subletting situation, the tenants will be obligated to vacate the premises or negotiate a new lease agreement with the landlord if they wish to remain in the apartment.

Legal Basis

Civil Code

Article 719

If the lessee defaults on the rent, the sub-lessee may pay the overdue rent and liquidated damages on behalf of the lessee, except when the sublease contract is not legally binding on the lessor.

The rent and liquidated damages paid by the sub-lessee may be set off against the rent that the sub-lessee should pay to the lessee. If the amount exceeds the rent due from the sub-lessee, the sub-lessee may seek compensation from the lessee.

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