As a business, finding the right commercial property and securing it on favorable terms is of paramount importance. Entering into a lease is a substantial commitment and you should carefully review the relevant terms before moving forward. However, no matter how prudent you are about signing a lease, circumstances could change drastically, and you might find it in your best interests to sublease the property to a new tenant. While commercial tenants customarily have the right to do this, there are important considerations that affect your legal interests.
Know your lease — Start with a thorough review of the lease terms. Many commercial lease agreements include specific language prohibiting the tenant from subletting the property without landlord approval. In other cases, the pertinent terms might be harder to find or might be written ambiguously.
Negotiate if necessary — There are reasons why a property owner could prevent a tenant from subletting their space. The subtenant might wish to use the rental in a way that threatens the property value or affects other tenants. Alternatively, the landlord could be concerned that the primary tenant might not pay the required rent if they are no longer on the premises. If you’re considering subleasing the property you currently occupy but believe your current lease terms might prevent you from doing so, you might be able to negotiate a waiver with your landlord by giving them information about the potential subtenant and their intended use of the property.
Understand the risks — In a standard sublease, the original tenant remains bound by the commitments it made to the landlord. So if your subtenant fails to pay rent to you or damages the premises, you remain responsible. Accordingly, even if you are permitted to execute a sublease, you should extensively review the other party’s operations and ability to make rent payments.
Consider an assignation — Depending on the circumstances, you might be able to walk away from your legal obligation by assigning the lease to another party. This differs from a sublease because the new occupant replaces you as the tenant for the time remaining on lease.
Correctly handling a sublease of commercial premises takes time and care. Regardless of your particular situation, you should consult with a qualified Connecticut real estate attorney as soon as you being to consider a sublease or assignment.
At Gesmonde, Pietrosimone & Sgrignari, L.L.C., we provide insightful counsel to commercial landlords and tenants on a wide range of property issues, including subleases. Please call 203-745-0942 or contact us online to make an appointment. Our offices are in Hamden and East Haven.
Gesmonde, Pietrosimone & Sgrignari, L.L.C. is located in Hamden, CT and serves clients in and around North Haven, Hamden, Waterbury, Bethany, Milford, Wallingford, Prospect, Woodbridge, Northford, Madison, Beacon Falls, Branford, Cheshire, North Branford, East Haven, Naugatuck, Meriden, Ansonia and New Haven County.
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