How to sublease residential or commercial real estate

Sublease is the transfer of leased property (residential or commercial) for temporary use to a third party. This is a convenient way for tenants to reduce their rental costs or even make a profit. In this article, we will consider how to properly organize the sublease process to avoid legal and financial problems.

Before subletting a property, you need to make sure that this is allowed by your current lease , which should state whether subletting is possible or whether the landlord's written consent is required. If the contract does not say anything about sublease, it is recommended to contact the landlord for permission in writing . If subletting is permitted but requires the owner's consent, send your request by post or email clearly stating:

• reasons for subletting;
• terms of sublease;
• information about the new tenant.

The owner has the right to refuse if the sublease contradicts the terms of the main contract. For example, under the main contract, the premises are leased as a trade pavilion, and subleased as a warehouse.

To protect the interests of all parties, it is necessary to conclude a written sublease agreement. It should be noted:

• data of the parties : information about the tenant and sub-tenant;
• main lease agreement : number, date and parties;
• description of the object : address, area, condition of the premises, furniture and appliances (for housing);
• lease conditions : payment amount, payment terms, sublease terms;
• responsibilities of the parties : responsibility for property maintenance, payment of utility services;
• liability for damages : who will compensate for damages;
• contract term : it cannot exceed the term of the main lease contract.

Before signing the contract, conduct an inspection of the property with the subtenant. Draw up an act of acceptance and transfer, in which you indicate: the condition of the premises, a list of furniture and appliances (if any), existing deficiencies. If possible, take a photo or video. This will help avoid conflicts after the end of the sublease.

Before handing over the real estate, it is important to agree on the issue of payment: who will pay for utilities, and how and when the rent will be paid. It should also be taken into account that income from sublease is subject to taxation. If you are an individual, be sure to declare your income and pay personal income tax (PIT) and military service.

Regularly check the condition of the property and the subtenant's compliance with the terms of the contract. This is especially important for commercial properties that may be subject to significant stress during use.

Sublease is a profitable tool for effective real estate management. However, it is important to take into account the legal nuances prescribed in the main lease agreement and conclude a sublease agreement in accordance with current legislation. It will not be superfluous to seek the legal assistance of a lawyer who will help to check the main lease agreement and correctly draw up the sublease agreement and its annexes.

Templates that may be useful:

- Contract for sublease of non-residential premises ;

- Contract for the lease of a warehouse ;

- Office lease agreement ;

- Lease agreement of non-residential premises ;

- Apartment rental agreement ;