Considering a Commercial Sublet? Avoid These Mistakes!

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It might sound like a fabulous opportunity.  However, it may quickly turn into a disaster.  There are three parties to consider in every commercial sublet agreement.  Ignoring any of them can be problematic.  Consequently, it pays to investigate everything and avoid trouble.

What is your role in the sublet agreement?   Are you the actual property owner or landlord?   No doubt you have your own concerns.  Additionally, tenants and prospective sub lessees should all have a keen understanding of what it involved in subletting commercial space.

The Danger of Commercial Sublets

Without question, a commercial sublet should not be looked upon as a casual arrangement.  It’s not something you just shake hands on.  Frankly, there are a lot of things to consider.  When we talk about the consequences that can arise from mistakes made in sublease arrangements, they generally boil down to the following:

  • Lease between property owner and primary tenant specifically excludes sublets
  • Property owner requires tenants to secure permission with any and all sublets
  • Primary tenant fails to pay rent and is in the eviction process
  • Commercial space owner or even zoning regulations disallow certain business types
  • Improper representation of size and access to the premises

The bottom line is that any of these circumstances could mean your company will be forced to vacate the premises.  Therefore, those fancy business cards you just printed?  Count on ordering new ones!

Notwithstanding, the idea of subletting commercial office or warehouse space isn’t necessarily a bad one.  However, it is important to enter into a sublease agreement.  For the most part, this means retaining a lawyer with experience in commercial leasing.

Avoiding Trouble in Commercial Sublets

When it comes to negotiating a commercial sublet, make sure to review the lease agreement between the landlord and primary tenant.   If that agreement categorically rules out subleasing the premises, there cannot be a legal sublet.  Alternatively, it is possible that the property owner may give permission for a subtenant to occupy part of the commercial space.

In all matters involving primary tenants subletting property, it is crucial that the parties reduce the terms of the agreement to paper.  Otherwise, prospective problems will undoubtedly arise.

An experienced real estate attorney can assist in negotiating the terms of the sublease and ensuring that your interests are protected.  At the very least, make sure the sublet agreement covers the following:

  • Reference to consent of the landlord
  • Clear identity of the sublet premises
  • Intended use of the sublet property
  • Duration of the sublease agreement
  • Rental agreement amounts
  • Use of common areas
  • Repair and responsibilities assigned to all parties

As much as sublet arrangements can be cost effective, do not take them lightly.  As with any legal issue, you should check with an attorney before signing anything.

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The Law Offices Lawrence M. Centanni has experience in both residential and commercial real estate.  Have questions?  Put your mind and ease and set up a meeting.

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