The usual use for a sublease is to lease part of the existing leased premises to someone else. For example, a tenant with a large space may have surplus room. It makes good commercial sense to rent the excess space to another, often associated, business.
The area of the sublease premises need to be properly defined, and the term of the sublease carefully considered so that it is consistent with the head lease.
The sublessor (who is also the tenant under the head lease), will be responsible for the acts of the sublessee, and needs to ensure that there are appropriate protections in place with regards to guarantees and indemnities. In this respect, the sublessor effectively becomes the sublessor’s landlord.
Subleases seem simple, but are in fact quite complex to draft – and they must be right in order to protect the landlord, the sublessor and the sublessee.
We are experienced in advising landlords, tenants and sub-tenants. We can also seek landlord consent and/or mortgagee consent to a proposed sublease.
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