As a commercial building owner, you have control over who you rent operating space to. The terms of your lease dictate the rights and responsibilities of both the lessor and the lessee in these situations.
So, how should commercial landlords respond to lessees’ requests to sublet their commercial spaces? Well, that depends on a few factors.
Subletting encourages occupancy
Not every startup is going to go the distance. Even those lessees that appear to thrive may realize they have far too much space to utilize themselves. Lessors that permit subletting may find this decision allows them to maintain occupancy of their properties.
Lessors can charge administrative fees when subletting
One thing most landlords hate is the paper chase associated with leasing office and retail space. Taking on a subleased tenant increases the paperwork and other responsibilities of the lessor.
To combat this additional work, lessors are within their rights to charge reasonable administrative fees that can be assigned to the subleased tenant or split between the lessee and sub-lessee.
Risk of lease violations rises
It stands to reason that the more tenants a property has, the greater the chance of one of them violating the terms of the original lease. Property owners who are willing to sublease can retain the right to screen potential sub-lessees before approving the sublease.
Well-screened sub-lessees may be less likely to break rules, violate their leases or damage the property. It’s a calculated risk, but some damages may be mitigated with careful occupancy screenings.
There is no right or wrong answer to whether or not to allow subletting. Reviewing each request on a case-by-case basis may be your most prudent option.
