If you are thinking of subletting your commercial property, you may benefit from our expert legal advice. It’s important to remember that subletting the property doesn’t relieve you of any of your obligations as set out in your lease. At all times, you will continue to take full responsibility for all aspects of the commercial property and be held accountable by your landlord.
Nevertheless, commercial property subletting has the potential to be a beneficial and profitable venture. Whether you’ve made the decision to go ahead or would simply like to explore the options, Aristone Solicitors can help. Book your obligation-free initial consultation today.
What is Commercial Subletting?
Commercial subletting occurs when a tenant rents part of the property they are currently leasing to a secondary tenant. When this happens, the primary tenant assumes the position of ‘sublandlord’, and the new tenant becomes a ‘subtenant’.Though the primary tenant remains a tenant with the same obligations to their own landlord, they must also fulfill their own obligations as a sublandlord.
If there’s a part of your commercial property you don’t necessarily need, letting it out to a subtenant could be a great way of generating additional revenues. For a subletting project to be successful, however, several important steps must be taken to avoid issues at a later stage.
The most important of which being as follows:
- Obtain the Head Landlord’s Consent
Under no circumstances should you even consider subletting, if you haven’t received the formal consent of your landlord. Such permission must always be obtained in writing, in case evidence as such is required at a later stage.
- Subtenant Due Diligence
Ultimately, you will take full responsibility for the actions and inactions of your subtenant. It is therefore important to carefully consider their financial status, their tenancy history and their general viability as a prospective subtenant.
- Clarify all Terms and Conditions
It’s advisable to seek the support of a commercial property solicitor or an expert in contractual law, when putting together the sublease you intend to sign. Additions and alterations to subleases at a later stage can be complex and costly.
- Consider Deposit Requirements
In the event that the subtenant contravenes the sublease or causes damage to the property, it is essential that you have sufficient funds on standby to cover the costs. You must therefore consider how much to request by way of a deposit or guarantee.
- Evaluate Long-Term Goals
It’s also important to carefully consider whether or not subletting your commercial property is a suitable move, in accordance with your long-term business goals. It may make perfect sense today, but may not be as viable in years to come.
Ask the Experts at Aristone Solicitors
If you have any questions or concerns regarding commercial subletting, we’d be delighted to hear from you. Aristone Solicitors has unrivalled experience in all aspects of commercial property lets, sublets and related transactions, representing the interests of landlords and tenants across Luton and beyond.
For more information or to discuss your requirements in more detail, contact a member of the team at Aristone Solicitors anytime.