Landlord and Tenant may be happy they included a Subleasing Clause in their Commercial Lease

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Landlords and tenants may find benefit in including subleasing or an assignment clause in their commercial leases, but for different reasons. A sublease can allow each party to receive the benefits offered in the contract but through a different relationship.

A sublease is a new lease agreement between the tenant and a new subtenant. A sublease refers to transfer of part of the leased commercial space to a new tenant, whether this partial transfer be temporary or permanent. A sublease also refers to transferring the entire rental space to a new tenant for a period. However, an assignment involves transferring all the space to another individual or entity for the entire remainder of the lease. In a sublease, the new tenant pays rent to the original tenant, while in an assignment, the new tenant pays rent directly to the landlord. An assignment basically is the original tenant giving up all his or her interest in the lease for the remainder of the term.

It is important that the commercial lease includes clauses detailing the rights each party must sublet or assign interest in the property. In the event the parties have a disagreement of their rights with respect to subleasing the property or allowing a sublease, the lease will be able to direct each party as to their rights. For example, if the landlord does not specifically prohibit the practice of subleasing, the tenant may feel as if he or she can do it without asking. It can be much harder to stop an action from happening without specific language prohibiting it.

Florida law allows the landlord to prohibit a primary tenant from subleasing the property. However, by allowing the tenant to sublet the space, the landlord is ensuring that the property will go to use, and the landlord will continue to receive rent on the property, which is ultimately the end goal in any lease situation. Without having that right, the tenant may be more likely to abandon the lease, forcing the landlord to have to pursue eviction proceedings and find an alternate tenant to lease the space. By allowing a sublease, the responsibility is on the tenant to find a suitable replacement.

It may be advisable for the landlord to include language to the effect that the tenant cannot sublet or assign the property without the landlord’s consent. This clause gives the landlord added protection to ensure that the new sub-tenant is trustworthy and suitable to lease the property. Other leases may prohibit subleases or assignments without the landlord’s consent so long as the landlord is reasonable when evaluating the proposal.

Determining whether the landlord can reasonably say no to the sublease depends on several factors including:
1. Whether the new sub-tenant is financially healthy and is likely to conduct a profitable business in the space;
2. Whether the new sub-tenant will use the space according to the landlord’s rules as to how the property can be used;
3. Whether the new sub-tenant has a quality business reputation, including positive credit history and clean criminal history.

If the new sub-tenant meets all these qualifications, a court may be likely to question whether a landlord is reasonable in rejecting a request to sublet the commercial space.

If the subleasing is not included in the commercial lease, it may be advisable to both parties to discuss it during lease negotiations. Life changes occur, which requires both parties to be flexible in their arrangements. A tenant may be forced to move or may suffer an unexpected business loss. By allowing that person or business to find a way out and still provide the landlord with someone who is willing to lease the space, both parties win. If the landlord is adamant against allowing a tenant to sublease the property, it may be advisable to include a clause allowing the parties to terminate the lease in the event one of these unfortunate circumstances occurs.

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