Should you sublease a commercial space?

| Jun 5, 2020 | Commercial Real Estate Leases |

Commercial property is expensive to rent. It’s also quite difficult, at times, to find a space where you need it. If an opportunity to sublease someone else’s commercial property becomes available, should you take it?

Maybe. Subleases become available all the time in commercial properties. Sometimes a business goes under but the owner still has a lease to finish. Sometimes a company just has extra space. Others want to relocate to greener pastures but they can’t default on their existing rental agreement. Subleases can be a win-win situation because you take over the rent without taking over a lot of other responsibilities.

There are some potential questions you need to consider before subleasing, however. They include:

  • What are the terms of the original lease? You need to know exactly what’s allowed under the current tenant’s agreement. Does the landlord permit subleases? Does the sublease require the landlord’s approval?
  • What access do you have to signs and other advertising? The existing lease wasn’t negotiated with your business in mind. A small sign out front may have worked well for the current tenant, but will it work for you? Can you put up whatever advertising you need?
  • What happens if your sublessor defaults? Typically, you pay the sublessor and they pay the landlord. If the sublessor doesn’t forward your money, you could end up evicted. What rights do you have if that happens?
  • What if you need repairs or encounter other problems? Will you be permitted to take your case directly to the landlord, or do you have to go through the original tenant? If it’s the latter, you could encounter delays that you find frustrating.

Commercial real estate leases and subleases are not something that you want to negotiate on your own. An attorney with experienced with commercial leases can work to protect your interests and to make sure that you get the best possible deal.