In this article, Commercial Property Solicitor Richard Ramshaw looks at subletting. He outlines what it is, how it works and whether you can sublet your property.
He goes on to discuss the benefits and risks of subletting and provides some expert advice from both a tenant and subtenant perspective.
What is subletting?
When a tenant takes the lease of commercial property, they may have a right to create another lease below theirs. This is known as subletting or underletting.
Essentially, the landlord lets to the tenant, who sublets to the subtenant.
Our full article includes a diagram which helps to explain further.
Is subletting the same as subleasing?
Yes.
Can you sublet on a commercial lease?
It depends on how the lease is drafted, but generally the tenant can sublet the whole property if they obtain landlord consent first.
Subletting of part may be permitted where there are separate spaces within the property. For example, a tenant of 10 self-contained office spaces may be allowed to sublet one of those spaces.
What are the benefits of commercial subletting?
Below we’ve detailed some of the benefits of subletting, from both a tenant and subtenant perspective…
What are the benefits of commercial subletting for tenants?
It gives a tenant the flexibility to rent out the property.
This situation could arise if the tenant’s business is not doing well and they cannot afford to pay the rent or the opposite of this if the tenant’s business is booming, they may need to move to bigger premises.
What are the benefits of commercial subletting for the subtenant?
For the subtenant – the benefit is that subleases are generally for shorter terms than if they were taking a new commercial lease directly from the landlord.
Therefore, sublets can be very advantageous to start-up businesses that may want a shorter term with less risk to make sure their business will succeed.
What are the risks of commercial subletting?
Click here to read the full article.