The Commercial Property Sublease

If you are leasing a commercial property, it may be possible to sublet it depending on whether your lease permits subleasing.

Subletting is where a tenant (the head tenant) of a lease (the headlease) grants a new lease (sublease) to another third party (the sub-tenant). Although the sublease is an independent one, it will be subject to the existence of the headlease, since without that the head tenant has no right to sublease the property and the term of the sublease also cannot exceed that of the headlease.

Usually the headlease will dictate any conditions to be imposed on the sublease, such as requiring the landlord’s consent.

It is important to note that regardless of subleasing the property, a direct contract remains between the Head Landlord and the Head Tenant.

When granting a Sub Lease there are generally the following documents required:

  1. the Sub Lease itself
  2. the Licence to Sublet which is granted by the landlord
  3. the Stamp Duty Land Tax (SDLT) Certificate. The SDLT rules also apply to Sub Leases as they do to a Lease – for more information on this please click here and
  4. the sub-lease may need to be registered with the Land Registry, depending on the length of the sub lease term.

Beware – leases are substantial and often complex documents. Some Head Leases will set out various requirements that have to be observed in the way in which the Sub Lease is to be drafted. It is therefore recommended that you consult one of our specialist Solicitors, who can give you clear and thorough advice on the best way to deal with drafting the Sub Lease.

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