We were so pleased to see that on September 14, 2012 Brick Underground and Business Insider picked up our coverage of this issue and got news of it to an even wider audience.
Beware of anyone offering to sublet an apartment and asking you to pay rent "in advance."
Recently, two of our clients -- completely unrelated to each other and very sophisticated business people -- were searching for short-term luxury rentals online, and came into contact with a man who claimed he was offering his apartment for sublet because he had to go to England for six months. He showed them the unit and offered to rent it for six months, with the sub-rent "payable in advance."
Such rent was required to be paid by bank check. He assured the potential subtenants that the sub-rent would include all utilities including cable tv. He showed his lease, which indicated that he had an insurance policy covering his rent to the landlord, which he had tendered ahead of time because he is a foreign national.
Unfortunately, after the sub-rent was paid in advance the clients soon found out that the respective Landlords did not consent to the sublets and that the sublessor was, in both cases, badly in arrears. In one case the landlord had commenced a nonpayment proceeding and in the other case the landlord was about to file suit. And the sublessor is nowhere to be found.
This ruse usually nets the sublessor $10,000.00 to $15,000.00. It is easy money garnered from the sublet and representing the difference between whatever he paid the landlord and the six months advance rent collected from the putative "subtenant".
Such situations are easily avoidable if you take the following precautions.
(1) Insist on any "sublet" deal that you get the written consent of the actual landlord and documentation from the landlord that the account is current.
(2) Also, do not agree to pay more than one month's rent in advance.
(3) Nothing is routine in the new normal of this economy - run the deal quickly by your lawyer.