What is Subleasing?

Subleasing occurs when a current tenant determines that they are no longer in need of occupying all (or part) of their leased premise and choose to lease their space to another user for the remainder of their lease term. It is not unusual for companies to find themselves in a situation where they no longer need their existing space. Perhaps they have outgrown their current suite and need more space or the current office layout no longer suits their needs.  In today’s environment, it’s possible the company will have some of their employees work from home and therefore, do not need as much office space.  Regardless of the reason, subleasing may potentially be a solution to satisfy the terms of the lease.

While most commercial leases allow tenants to sublease their space, not all do.  It’s important to review the lease to ensure subleasing is an option.  Once established that subleasing is permissible and a new tenant is found, the original tenant becomes the Sublessor and the new user is called the Sublessee.

Be aware that subleasing the space does not remove the Sublessor from its responsibility to the terms of the existing lease.  It remains the Sublessor’s duty to pay the landlord rent in accordance to the lease and then collect rent from the Sublessor to recoup the cost of what would otherwise be unused space. Any sublease to another company will require the approval of the landlord under the original lease and the Sublessee will have to abide by the terms of the original master lease.

Randy Maas, Associate Broker

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