Does the Lease Permit Subleasing?

Check the original lease agreement to ensure that subleasing is permitted. Some leases prohibit while others allow it in limited circumstances.

Is Landlord Approval necessary?

If there is a basic right to sublease specified in the lease some landlords will be very particular about vetting the suitability of the proposed sub-tenant. Others will not be overly concerned, knowing that you as the tenant will remain responsible for the all the actions of your subtenant and that the rent and outgoings will always remain your responsibility as the head tenant. It is critical to note that the landlord consent will need to be in writing and clear.

Assessing the suitability of the Subtenant

We always recommend that appropriate background and credit checks of a proposed subtenant is undertaken. Are they “respectable, responsible and solvent?” This includes verifying their character, their experience in running a business and their ability to meet their financial obligations.

Payment of Rent and Outgoings

What is the basis for the calculation of the rent? What proportion of the outgoings will the tenant be liable for or will this be grossed up into a fixed starting rent that included rent and outgoings (known as a “gross rent”) . How will the rent be paid each month and to whom? Typically, the subtenant pays rent to the original tenant, who then pays the landlord. However, arrangements can vary. It is important to have the methodology and liabilities to be clearly outlined to prevent disputes arising.

Security Deposit

Holding a security deposit is essential in protecting your interests. In the even that the tenant defaults in payment of money to you or if the premises get damaged at least you will have a buffer there to minimise any loss. This amount is typically in proportion to amount you have the landlord, based on the size of the area sublet.

Insurance

The subtenant should take out their own public liability and buildings, at a minimum. As the head tenant you should be noted on the policy as an interested party. Also review your own insurance policy to check how subleasing may affect your own insurance cover.

Property Condition

A condition report should be carried out at the commencement of the subtenancy. This provides clarity to all in the event of damage at the end of the tenancy.