Can you sublease a sublease

Subleasing may or may not be permitted in the terms of the original lease, and may be subject to additional restrictions by jurisdiction. Even if a sublease is permitted, the original tenant is still liable for the obligations stated in the lease agreement, such as the payment of rent each month. Subleasing occurs when the tenant transfers a part of their legal tenancy to a third party as a new tenant. Subleasing can be established unless the original lease forbids it.

However, in most cases, the owner must be notified and must approve any subletting arrangement created by the tenant. A tenant who sublets property must understand that subleasing does not release them from their obligations on the original contracted lease. The tenant is responsible for paying rent and for repairs or damage to the property.

That means that if a new subtenant does not pay rent for three months, the original tenant that subleased the property is liable to the landlord for the overdue rent amount and any late fees.

In turn, the subtenant is liable to the original tenant for the unpaid rent. These laws may allow an individual to sublease under certain conditions even if their contract with the landlord forbids it. In San Francisco, a tenant can replace a roommate with another, even when prohibited by a written lease, as long as the replacement meets the landlord's application screening standards. For example, a landlord might demand a certain credit score where a tenant is concerned.

Subleases can apply to both residential and commercial properties. When subleasing, it's standard for only the original tenant's name to be on the lease—even if the sublessee pays the landlord directly.

Because a lease is generally for a predefined term, situations can arise that make it difficult or impossible for the original tenant to complete the lease term. For example, if a tenant is renting an apartment in Chicago with a month lease and, during month four, that tenant receives a job offer in Boston, the tenant may decide to sublease the apartment to another tenant for the remaining eight months. The sublease means that the original tenant can accept the job and move and does not have to pay expensive fees to get out of the lease or pay rent on two apartments.

The landlord also benefits because they receive all 12 rent payments and are saved the expense and effort of finding a replacement tenant.

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Type of property? Basement Suite. Parking Space. Back Create My Document Skip this step for now. Your Sublease Agreement Update Preview. This document preview is formatted to fit your mobile device. The formatting will change when printed or viewed on a desktop computer. Sublease Agreement Page of. Page of. Need Help With This Question? Document Preview About this Document. Who are the parties in a Residential Sublease Agreement? A good rule of thumb is that if the proposed sublease is of the whole of the premises, the landlord should always go for an assignment of the whole.

If the landlord is worried about the financial strength of the proposed new tenant, he is better off insisting on guarantees or simply refusing the assignment, than setting up a sublease and relying on his tenant to cover any problem.

Ducal estates, local authorities and some property companies retain the freehold of every property they buy. When they sell, they part only with a leasehold interest. They may sell land with a building on it, or maybe land ready for the tenant to build on it. The owners do that partly because it is often profitable to do so, but more usually to retain control in the future. There is not enough space here to explain why, but the bottom line is that you can control exactly what is and is not done by a tenant more easily than you can for what is done by your buyer.

So if you own nearby land, you have long term control of the development of a whole area. The rent on a long lease might be a fixed sum, which becomes worth less with each passing year of inflation, or, more likely today, it will be reviewed every five years to something approaching the market rent.

A long lease has more in common with a freehold. It follows that subletting is allowed far more often. If the landlord of a long leasehold intends to allow subletting from the start, he will have set up the head lease so that he is happy for the property to be sublet without too much worry on his part as to what might happen in the future. That is to say the original head lease remains intact and the sublease operates within it.

The sublease can be for the whole of the property in the head lease or any part of it. That is because you can largely rely in your document on the terms of the head lease so there is no need to define terms further. The sublease is controlled by reference to the terms of the head lease.

The head landlord continues to get the deal he wants and the sublessor is safe, knowing that his own new tenant is liable to him in exactly the same way as he is liable to the head landlord. The head landlord could reasonably be happy with his tenant and give consent to a sub-letting. After all, his tenant is bound to him whatever happens. But if he becomes concerned with the financial viability of his tenant, he may prefer to permit a sublease to a stronger subtenant than to say no and possibly push his tenant into administration and himself into a void period with no income at all.

The options for the head landlord cover a range, but must landlords take the view that they want to be able to take control or they do not. Dealing with a sublease gives the opportunity to all the parties to re-negotiate the terms. But if a tenant is unable to complete the lease term and another tenant has to be found, this can cost the landlord in everything from real estate broker expenses to lost revenue from the time the property is unoccupied.

Therefore, if an existing tenant is able to bring in a subtenant to continue paying rent for the rest of the lease term, that is likely a better situation for the landlord as well.

In commercial real estate, the landlord is almost always aware that the tenant is subletting the space to a subtenant. If not, the situation is usually described as an illegal sublet — but this most often happens in residential real estate. The subtenant will need to abide by the same rules in the original lease as the tenant, since the terms of that lease are essentially still in effect.

While the original rental agreement signed between the landlord and the tenant is still valid for the property being leased, a new sublease agreement should also be signed between the tenant and the subtenant. They will be able to give you advice and to ensure that you enter the agreement fully understanding all of the potential pros and cons. SquareFoot is a new kind of commercial real estate company. Our easy-to-use technology and responsive team of real estate professionals delivers the most transparent, flexible experience in the market.

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