What is a commercial sublease?

Location is an important consideration in finding the best commercial sublease.

A commercial sublease is a tenant-to-tenant agreement that is created and signed to govern the occupancy of a commercial property. Typically, leasing a commercial property involves two parties: a person or company that owns a commercial property and the person or company that agrees to lease that property. A commercial sublease, however, adds another party to that agreement. Essentially, a commercial sublease is a contract that allows a person or company to lease from the original tenant of a commercial lease.

A commercial sublease involves a tenant renting a leased property to another tenant.

Instead of having a contract with the owner of a commercial property, the commercial sublessor has a contract with the original lessee. The original lessee does not cancel or give up the lease that he or she has signed with the landlord. Instead, he has two contracts. He retains the original lease he had with the landlord and has a separate contract with the commercial sublessor.

In some cases, the landlord may wait until it finds the proposed subtenant to grant permission for the commercial sublease.

In some cases, commercial subleases are used when a business owner needs to vacate their leased property before the lease term expires. For example, a business owner can rent a store by signing a two-year lease. After several months, he may decide he wants to close his business or move it to a new location. Trying to terminate the lease early can be problematic, so he may decide to rent the property to a new tenant. When this type of arrangement goes well, the entrepreneur finds a way to not pay the rent on a property he doesn’t want to use, without breaking the rent.

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Sometimes a business owner plans to use a commercial space he has leased, but doesn’t need all of it. This is another situation where a commercial sublease can work well. For example, if a commercial tenant is renting office space but finds that he only needs about half of the space he has leased, he can offer the remaining space to a sublessor. This allows him to stay in the rented space without having to pay the rent himself.

When an original tenant plans to offer a prospective tenant a commercial sublease, it is important that they carefully review the terms of the original lease. Some commercial leases may prohibit subletting or require the original tenant to first obtain the landlord’s consent. If the terms of the original lease prohibited sublease, a commercial sublease agreement would be considered void and could result in a lawsuit.

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