When subleasing part of a tenant’s premises, you should keep the following in mind:

  • Use: Make sure that the use by the proposed subtenant with whom the tenant will share its premises will be complimentary to or, at the very least, compatible with the existing use of the rest of the tenant’s premises.
  • Access, Separation and Security: Each of the premises should have sufficient access, separation and security to operate and thrive during the term of the sublease.
  • Subleasehold Improvements: When dealing with the installation of demising walls and other improvements to the subleased premises, consider ownership, responsibility for construction, maintenance and removal of these improvements.
  • Head Lease: Make sure that the sublease is arranged and documented in accordance with the terms of the head lease, including obtaining any landlord’s consent where required. These types of subleases are, in effect, a cohabitation of two businesses. Special care and consideration should be taken before entering into any sublease of part of a tenant’s premises. Your thoughts?