In the last couple of years the property market is characterized with increasingly innovative practices in owner-lessee relations. One of them is subletting - where the lessee takes on the role of a landlord and rents part/s of the property for which it has entered into a lease contract with the owner. This trend is ever extending its scope and has been viewed in recent years as the preferred approach in terms of residential and office spaces alike.

What steps need to be taken in order to sublet an office space?

The first step concerns the lease contract, which you have concluded with the owner of the business premises. Make sure that it does not expressly forbid sublet or if there are certain specific terms on which sublet is to be performed. If there is no such requirement, a lessee has the right to sublet part of the property to a third party. It is recommendable that you use the services of a lawyer whom to consult on the specific case at hand and its terms.

The second step is to make a list of companies with which you have close dealings, partners with whom you have established a working relationship and to whom you can offer to rent your office. If you do not have such database you can employ the services of a real estate agency specializing in the renting of office premises  as it will save you time and efforts.

Besides, this agency can advertise your shared office space and provide you with a useful access to prospective lessees willing to form a partnership and looking for precisely that type of service. This is the preferred approach as it will enable you to offer your office premises to a large group of people who are potential lessees!

The third step is the precise selection of candidates. Make sure that the partner who will use your office premises is a trustworthy one. It is also important to make sure that you do not offer your office to companies in an industry competing with yours! The lessee can agree with the lessor that no other company within the same field can lease office premises in the same building. And not to forget that you should pick such lessees whom you would be glad to see on a daily basis.

Step four – financial stability! You need to make sure that the future lessee of your office premises has enough means and is capable of paying his/her share of the rent in the longer term. It is necessary to set the amount of the monthly rent and also recommendable to require deposit for possible damage.

Step five – negotiate all the details! Discuss potential renovations related to the office premises, lease conditions, utility bills; sharing amenities and office services, etc. It would be a good idea if all these terms are incorporated into the sublet contract and discussed with a lawyer.

Step six – finalize the contract by using again the services of a lawyer so as to ensure that all is properly set out from a legal point of view.

What are the most common reasons for subletting office premises and why you can benefit from that?

Subletting office premises has established itself as a preferred and appropriate practice as it offers new and flexible alternatives satisfying all parties.

Reason No 1: You have a space that you do not need and will not use! There are numerous situations where office premises are rented and later it turns out that part of it will remain unused. In other words, it transpires that the lessee pays for a space which he/she does not actually make use of.

Reason No 2: You have a space, yet, at present, you do not need it yet. It is important that you pick office premises that allows for the company’s growth so that you do not end up being on the lookout for a new one in a year or so. If the additional parts of the office remain unused you can find and agree with the short-term lessees who will help you pay the rent to the owner.

Reason No 3: You have to move to a new office. Most contracts have a time period between three and five years. If your company is growing faster than expected there is a risk of you breaching the time period of the contract. Offering your old office premises to new lessees while you are moving to a new office can prove to be a great decision.

What to watch out for when you sublet your office premises?

In the interest of objectivity, it is important to point out some potential drawbacks. It is crucial that you are aware of them so as to make sure that subletting is the most appropriate way for you.

Firstly, you remain responsible for the property!

It is you who has signed the underlying lease contract with the owner – so you will be the one liable to the owner for subletting the office in its original condition. Your lessee is responsible for the property maintenance, however, you remain liable if the property has sustained damage.

You are liable to pay to the owner the full amount of compensation!

If you have weighted up carefully the pros and cons of the sublet contract, you are about to save money on the rent!

Summary: Subletting is a popular way to save money; yet, you need to weigh up the pros and cons. If you want to save time and efforts, seek appropriate partners to share your office premises with. If you need suggestions for new office premises  in which your company can move to, or you have an office space which you wish to sublet, contact us and we will answer all your queries!