Wednesday, February 5, 2014

Pros and cons of a subleased space

Aside from your basic lease agreement, subleasing is also available for the renter market. Subleasing refers to a real property agreement between an original tenant and a subtenant. The sublease may cover the entire property or just a part of it. It can also apply to residential or commercial spaces. 

Subleasing refers to a real property agreement between an original tenant and a subtenant.

Know the pros and cons to renting a subleased space before you consider it. 

The pros

1. More affordable -If you’re looking to rent a small space, like a bedroom or a small office, the subleasing market has more options for your needs. Renting a smaller space will be cheaper than renting larger spaces. 

2. Common areas -Some subleased spaces have spaces and facilities available for shared use. This may be a common living room or kitchen for a residential apartment, and a reception or pantry for a commercial space. There may also be Internet access and other amenities the sublessor is willing to share. 

3. Option to entire space -If your sublessor decides to move out, you may have the first option to rent the entire space. Also, if the sublessor ends his lease, you are in an advantageous position to negotiate a direct lease with the landlord. 

The cons

1. Original terms - As a subtenant, your sublease agreement is subject to the original lease terms. The original tenant may have negotiated on some unfavorable terms that may be extended to you. Be sure to check the original lease agreement to have a clearer understanding of your sublease. 

2. Breach of lease - Your sublease agreement is dependent on the original lease agreement. In case the original tenant breaches his lease agreement in any way, this will affect your sublease as well. 

3. Delay in repairs -If the original landlord is responsible for maintenance and repairs of the entire property, you may have to go through your sublessor to get repairs addressed. This may cause miscommunication, delays and problems if not handled well.


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