COMMERCIAL SUBLEASE AGREEMENT

What a commercial lease holder needs to do to sub-lease a commercial property.

There comes a time in the life of every business when change is necessary. Whether your business outgrows its current space, or you just want to relocate, your need for change may run into problems if you can’t get out of your commercial lease agreement. If you need to move your business to a new location, or if you just want to close up shop, you may first need to find a new tenant that will take your place. To do this, you will need to enter into a Commercial Sublease Agreement. Here is what you need to know before you take this step:

WHAT IS A COMMERCIAL SUBLEASE? Whenever you enter into a commercial lease, you sign an agreement with the property owner and agree to pay rent, keep the place clean, etc. These leases usually last several years. If you want to move, you may have to find someone to take your place. When you find that person, you can allow them to become the tenant if you enter into a Commercial Sublease Agreement.

WHEN CAN I USE A COMMERCIAL SUBLEASE? If you are a tenant in a commercial property, you may be able to assign your lease rights and duties to a third party. To do this, you will first have to ensure the terms of the commercial lease allow for such a transfer. You may have to ask permission of the lease holder first, or you may be able to do so without their express consent. In other words, make sure you check your lease.

WHAT’S THE DIFFERENCE BETWEEN SUBLETTING AND ASSIGNING A LEASE? If you decide to sublet your lease, you are still responsible to the landlord for all the terms of the original lease. If you want to completely divest yourself of the responsibilities to your landlord, you will want to assign the lease to the new party outright. Depending on the nature of your original lease agreement, one may be possible while the other may not be. The important thing to remember is that under a sublease, you still have responsibilities to the landlord, while under a lease assignment you do not.

HOW DO I ENTER INTO A COMMERCIAL SUBLEASE? You will need to make sure a sublease is possible under the terms of the lease. Once you know you can do it, you’ll need to find a potential tenant. After you find them, you’ll have to draft and enter into a Sublease Agreement for Commercial Property that states the rights and duties of each party.

WHAT NEEDS TO BE STATED IN THE SUBLEASE AGREEMENT? Because the person you enter into the sublease with essentially becomes the new tenant, you will have to make sure the terms of the sublease agreement makes it clear who is responsible for what. Rent, duration, landlord’s duties, tenant’s duties, all of these issues must be made clear so no one is confused as to what their responsibilities are.

CAN I ASSIGN PARTS OF THE LEASE? It may be possible to enter into a sublease agreement where you only give part of the lease rights to the new party. Again, you’ll have to make sure it is alright with your landlord, but partial assignments may be possible. In these cases, it is even more important to make sure the intentions of all parties are expressed clearly and accurately.

Like any other legal agreement, your Commercial Sublease Agreement needs to be precise, easy to understand and useful. It doesn’t do any good to anyone if your agreement is incomplete or weighed down with draconian terms and conditions. Not only that, but you want to make sure all parties involved can understand what their rights and obligations are. Making sure your Commercial Sublease states your intentions clearly is the best step you can take when the time for change comes around.