Change is necessary in business as it is in life. Whether your business has outgrown its current space, or you just want to relocate then you may run into problems if you can’t get out of your current Commercial Lease Agreement.
Alternatively, you may need to downsize and find you have more space than your business now needs. One solution to these problems is to enter into a Commercial Sublease Agreement to sublet all – or just a part – of your leased commercial space. Here is what you need to know before you take this action:-
A sublease is an agreement between yourself and a third party ‘sub-tenant’ under which you agree to give the sub-tenant the exclusive right of possession of the whole or part of the premises. The rent payable to you by the sub-tenant and the sub-tenant’s other rights and responsibilities should all be contained in the Sublease Agreement.
With a Sublease Agreement, the tenant is responsible to you, not your landlord. The lease you have entered into with the landlord will remain in full force and effect and you will continue to remain responsible under your original lease to the landlord until the lease ends.
Be aware that the term you are giving your sub-tenant cannot be more than the term you are entitled to under your head lease with the landlord.
First you’ll need to make sure that the terms of your original lease allow you to sub-let and you will need to ask for your landlord’s permission in writing first.
Make sure you check your original lease before committing to anything and get the landlord’s consent to sublet if it is required.
If you are a tenant in a commercial property, you might be able to assign your lease rights and duties to a third party. The third party ‘assignee’ agrees to take your place as tenant on your lease with the landlord. The assignee will assume all of your rights and responsibilities and essentially will become the tenant under the original lease with the landlord.
If an assignment of lease is what you are after, see here .
You will need to make sure a sublease is possible under the terms of the lease to begin with. Once you know you can do it, you’ll need to find a potential sub-tenant and get the landlord’s consent in writing. After this is sorted, you’ll have to draft and enter into a Sublease Agreement for Commercial Property that states the rights and duties of each party.
The Sublease Agreement should clearly and precisely deal with the following issues;
identification of the parties, term of the sublease arrangement, the rent and how it should be paid, repairs and maintenance, Insurances, head tenant’s duties, sub-tenant’s duties, etc.
It may be possible to enter into a sublease agreement for only part of the premises. Again, you’ll have to make sure that this is not in violation of the original agreement with your landlord and get your landlord’s written consent if necessary.
Like any other legal agreement, your Commercial Sublease needs to be well written, easy to understand and precise, allowing no room for error.
Your ready-to-use kit includes everything you need to sublet commercial property;
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