This under lease (also called a sublease) is suitable for subletting any commercial property as a whole, or for subletting part of the property to one or more subtenants. It can be used to sublet any kind of business premises including offices, shops, industrial units such as factories, warehouses and workshops, and land. Features: new guarantor; break provision; rent review options; drawn for property owner or experienced property professional.
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This document allows you to carve out a sub lease from a head lease with the same terms, or alternatively, to specify different terms and impose further obligations on the new tenant. Using this template, your agreement can follow or deviate from the original as much as you like.
Typically, this document would be used by the tenant under the original head lease, in order to sublet:
This agreement is suitable for any commercial property including office buildings, shops, industrial units such as workshops, warehouses and factories, and even land. Because underleases deal with legal issues in the round, the form of underlease required for a shop on the high street is not different from the form required to sublet a scrap yard.
If you are subletting only part of the property you will need to look afresh at how responsibilities such as service provision, access, insurance and so on are split between the head landlord, you the sublessor and your subtenants. We provide for many different possible options. This is a very flexible document.
The underlessor should first check the original lease. Subletting may be allowed and if so, the permission is likely to be subject to specific conditions. If not allowed, you will have to go to the head landlord and negotiate. For example, it may be possible, with the landlord's consent, to increase the rent under the head lease in return for allowing subletting.
Plain English is used throughout except where it is necessary to use legal terms common in land law.
The key features of this template can be summarised as:
This sublease is one of a collection of commercial lease templates designed for use by property professionals: experienced landlords, attorneys and surveyors. Accordingly, the provisions are very thorough.
Business lease law is regulated primarily by the Lease of Land Act 1969. A lease of up to ten years does not have to be registered. If the term of this lease is longer than ten years it must be registered at the Deed Registry Office. A sublease carved out of a registered head lease should itself be registered.
We offer two underleases. This version will be used for most situations. The alternative is for circumstances where the head landlord has required deeper and more detailed involvement in the relationship between himself and the new subtenant. You may be interested to look at: Sublease agreement for commercial property: landlord involvement.
Note that this document is not suitable for subletting residential tenancy agreements. In those situations, we recommend cancelling the original and using a new tenancy agreement to let the property to the new tenants.
The template is comprehensive at 23 pages excluding guidance notes. Contents include: