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Including a sublease clause in a commercial lease

On Behalf of | Feb 12, 2021 | Commercial Leases

Leasing real estate to commercial tenants in California involves a certain degree of risk. As a commercial landlord, you may do everything in your power to minimize how long your space stays empty. A potential way to prevent a tenant from breaking a lease term involves including a sublease clause in your commercial lease.

According to the California Department of Real Estate, a sublease clause allows a tenant to transfer its right to a portion of premises, or the entire premises, to another entity for part of the existing lease term.

Understanding liability in subleases

In some ways, a commercial sublease clause favors the lessee by giving that company an out if the lease no longer meets its need. However, in the event that a subtenant fails to keep up with the terms of the lease, the original tenant is on the hook for what the subtenant failed to pay.

Subleasing to financially secure subtenants

Many California commercial leases allow tenants to sublease their spaces to other entities. However, certain conditions must exist to do so. Before a tenant may sublease to another entity, it must be able to prove that the new subtenant has the financial stability needed to cover the expenses associated with the commercial property.

As a commercial landlord, your own duties and responsibilities do not change much when you allow a tenant to sublease your space to someone else. If your lessee sublets some of your space to another entity and that company damages the space, for example, it becomes the duty of your original lessee to cover associated costs.