How to Draw Up a Commercial Sublease
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How to Draw Up a Commercial Sublease

How to draw up a commercial sublease agreement between two parties

The current property rent prices are high and people are looking for inventive ways to save money on this. Sub renting is a popular method and if you want to do this you need a proper sublease agreement.

What is Sublease?

A sublease occurs if the person who rents a property is renting this same property to another person for a time period that is less than the rental period that the original renter has agree with his landlord. In this situation the original renter is then called a sub lessor or sub landlord. Before you plan to sub rent your rented property to a third person you need to check your lease agreement if this is allowed and under which conditions.

Sublease and Legalities

A tenant cannot sublet any property it the lease agreement does not permit this. It is usually accepted to sublease property when the lease agreement does not specify anything about this. In most cases the landlord will have added a condition in the lease agreement that he needs to approve any sub rentals. Check your lease agreement thoroughly and ask your landlord permission before sub renting your rented property.

Background Check

In some situations the landlord may require a background check on the potential sub lessee. In the original renter had to provide a background check for his lease agreement, and then it is most likely that the landlord will require the same on the person who will be the sub lessee.

If the landlord does not require any background check, or reference letters, then it is recommended to ask for reference letters anyway. A credit check cannot be completed without consent of the person that you want to be checked.

The Sublease Agreement

The landlord might require a sublease agreement to be signed to protect both the sub lessor and the landlord. If your landlord does not require a sublease agreement then you need to draw up a sublease agreement between yourself and your sub lessee to protect your interests. This agreement should cover all terms that will be applicable on the sublease.

Things to cover in the sublease agreement could be;

• The rental period

Payment of rent

• Payment of utilities

Maintenance arrangements of the property

• Maintenance of furniture

Additional services like cable or internet

• Security deposit requirements

• What will happen if the sub lessee fails to cover his payment

Commercial Sublease

In situations where the owner of a commercial property will lease this property to a management company, who will sublet parts of this property to subtenants, a commercial sublease agreement has to be drawn up. The management company will then be considered to be the sub lessor and he has to make his own arrangements with the subtenants.

The things to cover in the commercial sublease agreement would be;

• The rental period

Payment of rent

• Payment of utilities

• Maintenance arrangements of the property

Maintenance of furniture

• Additional services like cable or internet

• Security deposit requirements

What will happen if the sub lessee fails to cover his payment

• Any provisions to cover costs on the building and grounds

What will happen if the management company fails to cover his responsibilities

Go for sample forms to www.legalforms.com

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