Subleasing can be a great way to obtain short-term office space at a lower market rate, however make sure you review both subleasing and direct office lease opportunities and carefully review both the sublease and the sub-lessor’s original lease and understand your obligations. It is imperative that you seek legal advice before signing anything as subleases are legal binding agreements and are also dependent on the original lease.
Subleases can be complex because they involve three parties: the landlord, the sub-lessor (the person or organization that signed the original lease and who you will be subleasing from) and the subtenant (you) as well as two documents: the master or original lease and the sublease. To further complicate matters, there is no direct contract between the landlord and the subtenant. And all this is possible only if the master or original lease allows for a sublease.
Whether you are a sub-lessor or subtenant, there are a number of things to keep in mind to ensure a successful sublease:
- Breaches of the lease: If your sub-lessor goes into liquidation, defaults on payments or breaches their lease, it will affect your sublease as well.
- Maintenance/repair delay: If you need repairs or require additional services provided by the landlord, you will most probably need to go through the sub-lessor to make it happen. This may cause delays and have an adverse impact on your business.
- Your image/brand: Subleasing means that you could be limited in how you present your business, including any allowable signage, advertising, and decor. It can help to sublease from someone in a similar type of business or with a similar image.
- Is the Rent Really Cheaper?: Some sub-lessor’s sublease their office space in the hope of making a profit.
- Are You Stuck With Something ?: If the sub-lessor negotiated an unfavorable deal with their landlord, they may try to pass on certain fees and higher rent to you. Be sure either you or your attorney read both the sublease and original lease. Make sure you are not limited in how you can use the property.
- Sub-lessor’s Business: When subleasing, be sure to do your homework on what business your sub-lessor is conducting. It may conflict with your business or ethics or it may be extremely noisy. Also be aware of any legal disadvantages if you do have problems with either the sub-lessor or the landlord.
- You, the Sub-lessor and the Landlord: Finally, even though the transaction is with the current tenant of the office space, it is not necessarily two party negotiation, but potentially a three-way negotiation between landlord the tenant and the sub-lessee.
Make your life simple, don’t get a sub-lease. Contact Executive Suites at Lakewood Ranch to get the best rates and terms on an office that you lease directly. By getting your office at Executive Suites at Lakewood Ranch items 1 through 7 from our list above will not apply to you and therefore will never give you headaches or cause you to lose sleep at night.