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Sub-Letting An Office
Thinking Of Sub-Letting An Office
If you’re thinking about sub-letting an office or part of an office, check your lease agreement. The landlord should state in the lease agreement if sub-letting is allowed and what type of businesses are not acceptable. Even if you’re only sub-letting a desk space, you need to check your lease agreement first. The lease agreement should also stipulate what type of sub-letting is allowed. If your landlord has verbally agreed to sub-letting, this needs to be stated in writing.
Check Business Type
The lease agreement may not stipulate what type of business will be acceptable, when you sub-let. In which case, you’ll need to have it in writing that your landlord aproves of the type of business is occupying part of the premises. Landlords will sometimes oppose to leasing to certain businesses. A conflict of interest could be one reason. Cultural clashes and impropriety could be another reason that would raise issues with the landlord.
Sub-Letting Check List
Many companies are downsizing and discovering that a way to cut costs is by sub-letting. Why not create a check list and ensure all boxes are ticked before considering to sub-let?
- Check your lease – are you allowed to sub-let any space in the property?
- Check with the landlord what type of businesses are/are not acceptable.
- Get a lawyer to review the lease agreement.
- Carry out checks on any tenants looking to sub-let the space.
- Agree on the terms and have a solicitor draft a lease agreement with the new tenant.
Recent Economic Developments
Recent economic developments have caused a decline in the office market. Tenant supply declined, when the pandemic forced people to work from home. Many leases terminated before they expired, and those that expired were not renewed. On the other hand, now that social distancing restrictions have been lifted, supply and demand for office space is high. If you need help deciding what steps to take before leasing your office space, please give us a call for an informal discussion and advice. SG
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