What is Commercial Subleasing?

A commercial sublease agreement is an agreement between the tenant currently leasing the commercial property (sublessors), the landlord, and the person who wants to use the property (sublessee). There are several reasons this can work out well, and several factors to keep in mind.

For sublessors:

Subleasing can be a good option if you need to downsize your office space, have outgrown your current space and are moving, or are in the process of shutting down. However, make sure you bring your landlord in on any sublease agreements and that it is legal for you to do so according to your rental contract. Make sure your sublessor is trustworthy. If they default on the rent or other expenses, you are likely to be liable.

For sublessees:

Similar to the tenants you’d be subleasing from, your business is likely in a transition period. Subleasing a space might be a good solution, as would subleasing a building in order to be able to take over the lease later. Sublease rates can also be lower than regular leasing rates.

It is important to get everything in writing so that you know your legal responsibilities in terms of rent, utilities, maintenance, and more. Make sure you understand what type of commercial lease you’ll be on, even temporarily. Ensure that you make contact with the landlord to avoid potential legal issues.

For landlords:

Subleasing is a way to keep your income steady and find new tenants. However, it is important that the terms are clear to everyone involved. Make sure your tenants are not designing illegal lease agreements, and establish a relationship with the sublessee.

A subleasing broker can often be a safe and effective way to make sure all parties are protected and informed on the conditions of the agreement.

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