Commercial Sublease
Most leases of commercial buildings give the tenant the right to sell the
lease (see page on assigning a lease) and some will
permit subletting. Subletting means that the tenant grants a new lease out
of the tenants lease. If this is done then the tenants lease (from the
freeholder) is generally called the 'head lease' and the lease granted
out of that is called the 'sub lease' or 'under lease'.
A
sub lease cannot be granted for a term that exceeds the term of the head
lease. Subject to this point, whether or not a sub lease can be granted
depends on the head lease terms - if the head lease is silent on the point
then there is no restriction on the grant of a sub lease. More often though
the head lease will permit a sublease to be granted subject to it complying
with certain conditions laid out - and subject to the landlords consent.
Usually the easiest way of granting a sublease will be to grant a lease by
reference to the head lease i.e. a lease in which you set out the rent and
term but otherwise import into it all the same terms as are in the head
lease. This should pass on to the sub tenant all the responsibilities of the
tenant - though of course it does not relieve the tenant of those
liabilities to the landlord - a direct contract remains between the head
landlord and the head tenant.
In
the grant of a sublease it means that there are generally two documents
required - one is the sublease itself, and the other is the licence to sublet
that would be granted by the landlord
The same conditions regarding registration requirements and SDLT apply to a
sub lease as they do to a lease see
Stamp Duty Land Tax
If
further security is required against performance of the tenants obligations then
the landlord may wish to consider taking a rent deposit - click
here
for more information
We
hope that you will find our templates helpful. Beware though - leases are
substantial and often complex documents. Bear in mind that sometimes the head
lease will set out various requirements that have to be observed in the way
in which the sublease is drafted. All leases are different and you need to
consider the relevant provisions of the head lease.
Our templates available below assume that the sublease will
be a lease of the whole of the property demised by the head lease. There are
different versions of the lease and licence depending on whether the
intention is that the sublease carry security of tenure. If you have any doubts you should
consult a solicitor
The
documents will download as a Zip file. Once downloaded it will unzip to a Word
document. You will need a zip utility to unzip the document. Windows XP
contains a built in utility. Alternatively shareware versions suitable for
unzipping a file can be obtained from the Internet - for example, click the Winzip
button at the side of this page.
The
documents available on this site have been prepared for use in England &
Wales. They may not be valid if used in other areas.
