A sublease is used typically when part of the premises that is let is then also let to a tenant sourced by the existing tenant. This is common where a tenant does not need the entire space leased and agrees to “sublet” part of that space to another, usually smaller, tenant.
In such a case, the existing tenant will generally be responsible for the subtenant in a similar way to a guarantor. In this sense, the existing tenant takes on the role, in part, of a landlord. The rent will generally be paid to the existing tenant (sub-lessor) by the sub-lessee. However, the sub-lessee will still have to observe the terms of the head lease.
Subleases sound simple but are in fact quite complex. It is smart for all three parties (and particularly the landlord) to only enter into a sublease drafted by a leasing expert.
PCL Lawyers provides lease advice to landlords, tenants and sub- tenants and, where applicable, can seek landlord consent and/or mortgagee consent to the proposed sublease.
To contact one of our leasing lawyers, phone 1300 907 335 or fill out the enquiry form on this page.