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Commercial Sublease basics

Using a Commercial Sublease Agreement, you can lease property that you may no longer need or part of a property that you also occupy. Often commercial leases are long term, sometimes up to ten years and include expensive penalties for terminating the contract early. For this reason, many tenants may benefit from a Commercial Sublease Contract.

Use the Commercial Sublease document if:

  • You want to lease part of a commercial space that you are leasing.
  • You want to sublease the entire property that you still hold a lease on.

If your Commercial Lease Agreement says you can sublet the property, you may consider subletting all or part of the property if you are looking to decrease expenses, need to move to another property, or are going out of business. You may even choose to sublet to multiple businesses.

Other names for this document:

Commercial Sublease Agreement, Commercial Real Estate Sublease, Commercial Sublease Contract

What is included in a standard Commercial Sublease Agreement?

Sublease Agreements include items that most Commercial Lease Agreements including such as terms, payments and what happens if the contract is terminated.

  • Contract information
    Names, addresses and contract information for both parties.
  • Location of property
    Physical address of building as well as a description of the specific space to be subleased.
  • Terms
    How long the agreement lasts and when it starts.
  • Payments
    How much the payments are, when payments are due, and how they can be paid. Includes information about late fees as well.
  • Utilities and services
    Defines what portion of the utilities and services will need to be paid. In some cases, it may be necessary for them to obtain their own services. Items often covered include utilities, refuse services, internet, building security and cleaning services.
  • Termination
    What happens if the contract is terminated and what expenses may occur. This could include collection, lawyer, cleaning and damage fees.

How do I know if I can sublet my space?

If your lease does not specifically state whether you can sublease or not, you can ask for a Consent to Sublease from your landlord or property manager. This document proves that you have permission from the landlord to sublet the space. You'll want to make sure you get this permission, otherwise you may be found in violation of your lease and risk termination. Your landlord may also have opinions on what types of businesses can move in.

Additional items to consider including in a shared space agreement:

There are many other things to consider beyond the basic items included in a Commercial Sublease Agreement. Often parts of the space are shared, so you many want to include details that will help all tenants get along and businesses running smoothly. These topics may not have to be in the actual lease, but should be agreed upon. Additionally, some of these items may be in the original lease, so you want to make sure your sub-tenant doesn't cause you to violate the original lease agreement.

  • Shared or communal space
    This could include lobby space, break rooms, bathrooms, conference rooms, hallways and stairwells, storage rooms and interview rooms. It should be decided how these spaces will be kept clean. You'll also want to include information about how conference and interview rooms can be reserved.
  • Shared equipment
    Equipment used by multiple renters could include office equipment and break room appliances. Ownership on these items should be established as well as maintenance responsibilities. You can also decide on how new items will be managed.
  • Parking space
    Most office or retails spaces come with parking spaces. You should define who gets which parking spaces as well as where customers are to park if applicable.
  • Emergency procedures
    It's important to outline actions that are to take place during an emergency. All tenants should also know where medical supplies and fire extinguishers are located.
  • Signage and advertising
    You may benefit from saying what kind of signage is allowed and where it can be located. This could include outside signage as well as inside shared spaces such as the lobby.
  • Building alterations
    This may be included in the main lease and needs to be shared with subletters such as if they can paint or otherwise alter the space they are renting.
  • Visitors
    If there are restrictions on visitors that information should be shared. It could include children and pet restrictions or anything that violates the original lease.

How do subletters communicate with the property manager?

For the most part, subletters are required to work through the sublandlord (the primary tenant) rather than directly with the property management company, which puts a greater burden on you if you are the one managing the Sublease Agreement. However, it also prevents numerous parties from contacting the property manager about the same property.

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