Sub-Leasing
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1 February 2010
If you are leasing a commercial property, and you find that you
cannot get out of the lease then it may be possible for you to sub-lease the
property.
Most leases of commercial buildings give the tenant the right to
sublet.
Subletting means that the tenant grants a new lease (the Sub
Lease or Underlease) out of the existing lease (the Head 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 terms in the Head Lease, and where 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 Sub Lease 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 Sub Lease 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 Sub Lease it means that there are generally
two documents required:
1. the Sub Lease itself; and
2. the Licence to Sublet - this is granted by the landlord
The same conditions regarding registration requirements and SDLT
apply to a Sub Lease as they do to a Lease - see <http://www.hmrc.gov.uk/so/sdlt/index.htm#1>
Rent Deposit
As in the situation of a Lease, if further security is required
against performance of the sub tenants obligations then the tenant may wish to
consider taking a rent deposit.
Note - leases are substantial and often complex
documents and you should therefore always consult a Solicitor who specialises in
property law.
Inam Ali is a Solicitor at Lawdit, specialising
in Commercial and Intellectual Property Law, and can be contacted via email:
inam.ali@lawdit.co.uk
About the Author
Lawdit Solicitors offer services and
advice for litigation, commercial contracts, Intellectual Property and IT legal
agreements. We are experts in commercial law with a heavy emphasis on
Intellectual Property, Internet and e-commerce law. Lawdit is a member of the
International Trademark Association, the Solicitors' Association of Higher Court
Advocates and we are the appointed Solicitors to the largest webdesign
association in the world, the United Kingdom Website Designers Association.
