What is a commercial sublease?

A commercial sublease is an agreement between a tenant who already holds a lease to a commercial property and another party who wants to occupy part or all of that commercial property.

What is the difference between a commercial lease agreement and a residential lease agreement?

The most significant difference between a commercial and residential lease is obvious: commercial leases are used for commercial properties while the primary purpose of a residential lease is to provide a property in which someone will live. Residential leases are often referred to as “rental agreements.” Typical residential leases are for: apartments houses townhouses condominiums Residential leases usually have no commercial purpose and most residential leases will run for a much shorter time period than a commercial lease—usually one year or less. They are also generally paid on a monthly basis. Termination requires much less notice than a commercial lease as well. A commercial lease, on the other hand, is between a commercial tenant and a landlord. The purpose of the contract is to provide a property for the tenant from which to run a business. It involves the sale of goods or services or provides a place to manufacture a product. The rental space is not designed to provide a place to live, and it is often against local or state law (or the lease agreement) to reside in a commercial space. Residential renters have a lot more protections compared to commercial renters. Those who are renting an apartment often do not have the same type of experience or business knowledge that someone using a commercial lease would have. As a result, state law usually protects residential renters from certain abuses that their landlords may attempt. For example, residential landlords must keep their premises habitable, which includes providing things like heat and water. Commercial landlords have no such obligation unless it is explicitly spelled out in the lease agreement. Residential landlords are often in charge of things like keeping the premises pest free and providing necessary maintenance. Commercial tenants do not have the same benefits; they are often tasked with doing their own maintenance for the portion of the property that they are renting. Common area maintenance is usually the responsibility of the commercial landlord, however.

Are utilities included in commercial subleases?

This depends on the agreement between the tenant and the sublessee. While most leases cover operating expenses, including utilities, this is subject to negotiation by both parties.

What law governs a commercial sublease?

A commercial sublease is usually governed by the state and local laws that apply where the property sits, regardless of where each party’s headquarters or principal place of business is located. In some situations, federal law may apply, but those circumstances are rare and often address only a portion of the company.

What is the difference between a commercial lease assignment and commercial sublease?

Landlords can assign the rent that they receive from a commercial tenant to another person or entity. They usually do this to pay off an outstanding debt or other obligation. They can also use it as a way to fund other business ventures. If a landlord assigns its right to the rental payments, the tenant must pay its rent obligation to a different entity, but the responsibility to pay rent will generally stay the same. The assignee can often step into the shoes of the landlord and force a tenant out of a specific location if the tenant is not meeting their rental obligations. A commercial sublease, on the other hand, deals with the tenant’s right to allow someone else to lease the property from them. Subleases are generally only permitted if the commercial lease does not prohibit them. In many circumstances, the tenant must get permission from the landlord to engage in a commercial sublease agreement. Often, subleases may not be possible because of restrictions in the commercial lease, including specific limits that affect the type of business that can move into that particular location.

Commercial Sublease Agreement

A commercial sublease agreement is an agreement between the original property tenant and a new commercial tenant, called the "subtenant.

" This allows the original tenant to lease out the property for all or part of the remaining term of the lease.

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Our commercial sublease agreement

Helps you easily sublease your property while complying with applicable laws
Ensures you stay in compliance with your lease agreement
Helps provide specific disclosures as required by law or regulation
Is compliant throughout all states and the District of Columbia

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How to create a sublease agreement in 3 steps

Gather Information

Collect basic information about the parties and the agreed sublease terms in preparation for completing your agreement. This includes the landlord, tenant, and subtenant names, addresses, and phone numbers, lease dates, rent amount, utility responsibilities, and insurance requirements.

Answer the Questionnaire

Use the information you collected to complete your sublease agreement. We make this easy by guiding you each step of the way and helping you to customize your document to match your specific needs. As you answer certain questions, the document will adjust to accommodate your needs.

Review and Sign

Thoroughly review the commercial sublease agreement, correcting any errors or omissions along the way. You can make your own custom edits after downloading the word format of your document and opening it in a text editor, such as Microsoft Word or Google Docs.

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