Commercial leases can be a bit overwhelming when it comes to understanding their content, especially for the first-time tenant of a commercial office space. However, there are certain clauses to be aware of within the lease that will dictate how you can participate in your tenancy. Sublet and assignment clauses are two sections that you will often find in a commercial lease. These two clauses let the tenant know how they can occupy their tenancy and whether or not someone else can take possession with their permission. Here are some things that you as a tenant should know:
What is the difference between a sublease and an assignment?
There are clear differences between subleasing and assignments in commercial leases. A sublease is when the office space lessee transfers only a portion of the office space lease term to another. On the other hand, in an assignment situation, the office tenant transfers his or her entire interest in the remainder of the lease term to someone else. Some owners will allow one, both, or neither. It basically depends on the individual landlord and often what the current trend for the area is regarding allotments and sublets on commercial leases.
What do the sublease and assignment clauses contain?
These clauses contain all the factors surrounding these two types of tenant transfers. In general, these sections will provide that the tenant may sublet or assign the property during his tenancy or that he must refrain from doing so. Some commercial real estate clauses related to these issues may take an intermediate approach and allow the tenant to make one or both transfers, but with restrictions.
Are these clauses negotiable?
These clauses are usually negotiable items in the lease. It never hurts to check with your prospective landlord whether or not you can change the terms within the sublet and assignment clauses. A tenant representative can help you make this request and provide valid arguments for why certain changes or requests should be granted.
Do you have to abide by these sublet and assignment clauses?
Once the sublet and assignment clauses are in the lease and the lease has been signed, they are permanent elements of the current lease. Therefore, you must follow the guidelines listed in these clauses. These sublet and assignment clauses not only benefit the lessor of the office space but also the lessee by detailing how tenure is to be conducted during the lease term.
These paragraphs are common in commercial leases. The terms of assignments and subleases will vary depending on your individual lease. Before you sign your commercial office space lease, be sure to read the lease carefully, especially the assignment and sublease clauses if you intend to transfer any part of your lease during the lease term.