Why do you need to use a Commercial Sublease Agreement?
Sometimes the original tenant is allowed to rent out space from his premises to another person or third party. Before renting out premises to a subtenant, he needs to outline all the terms and condition formally. Commercial sublease agreements fulfill this purpose. Both parties decide contractual terms mutually and then sign the contract to proceed further. However, they cannot violate the original lease agreement. Otherwise, the landlord can take strict legal action against the original tenant.
When do you need to use a Commercial Sublease Agreement?
An original tenant needs Commercial Sublease Agreement if he wants to rent out already rented premises to a new tenant. If an original tenant has not already taken permission in the commercial lease agreement to rent out his premises to another person or a third party, then he needs permission from his landlord before doing so.
What are the main things that go on this form?
- Business Names
Both parties mention their business names.
- Contact information
Original tenants and subtenants share their contact information.
- Address of Workspace
The complete address of the workplace/building is mentioned at the commercial sublease agreement.
If an original tenant is renting out the whole building, then the building address is mentioned. Otherwise, a sufficient description of the premises is stated in the agreement along with the complete address.
- Starting & Ending Time of Agreement
The terms need to be stated with the exact dates when the agreement begins and how long it lasts for.
- Payment information
Payment information needs to be addressed. Whether it is basic rent, late fees, security, internet, utilities, cleaning services, refuser services, building security, or any other payment; it is necessary to mention everything explicitly on the sub-commercial lease agreement.
- Contract Termination Consequences
Unlike a residential lease, it is not easy to get out of commercial lease agreements. They are made for a long period. Most of the time, commercial lease agreements include expensive penalties for terminating the contract early. So, it is necessary to mention what will be the consequences of contract termination.
- Could both the parties terminate the contract after a specific period or just one?
- What will be the penalty for terminating the contract before a specific time?
What are the most common mistakes to avoid with this form?
- Check Original Commercial Lease Agreement
As mentioned earlier, an original tenant cannot violate the rules of the commercial lease agreement. So, the subtenant must verify that contractual terms are not violating the rules. Otherwise, they could face difficulty shortly.
- Detailed Premises
Do not assume things. State the details of premises clearly; for example: Is Conference room available to the subtenant, if yes then in which hours?
State it clearly who will be responsible for the maintenance of the building. Can the subtenant alter the premises according to his needs or not?
- Precise Language
Use precise language instead of broad clauses to avoid any problem in the future.
Do I need to use a lawyer, accountant, or notary to help me?
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