Why do I need a Commercial Sublease Agreement (aka Deed of Sublease)?
A sublease for a commercial premises (such as an office space or storage unit) may be known as a 'Commercial Sublease Agreement' or a 'Deed of Sublease'. A written sublease is essential if you’re:
- a tenant wanting to vacate your leased property temporarily or permanently (perhaps you’ve found a more suitable space to move to) and you aren’t able to cancel your lease
- a tenant wanting to share rent costs by sharing your space with another business
- a landlord (or its agent) who has agreed to let its tenant sublease all or part of its property
In a sublease, a tenant who is currently leasing commercial property (known as the ‘sub-landlord’) leases all or a portion of its property to a new tenant (known as the sub-tenant), usually for the remainder of the term of the head lease (being the lease between the sub landlord/tenant and the head landlord). The original tenant becomes a quasi-landlord and receives rent from the subtenant. The original tenant remains responsible for payment of all rent, outgoings and complying with other obligations under its lease with the landlord. If the sub-tenant fails to pay its rent, the sub-landlord still has to pay the head landlord and recover its costs from the sub-tenant.
Save time, money and stress using an On Your Terms Sublease to get your specific arrangement clearly documented and enforceable in New Zealand.
A sublease is different to a licence because a sublease gives the tenant exclusive possession of the leased area (as opposed to under a licence, the tenant is merely given the right to use the area). A sublease gives rise to specific legal rights and is typically for longer than a licence (a licence can usually be cancelled on one months’ notice).
Who’s this Sublease for?
Any business owner (or its agent) subleasing (or receiving a sublease of) commercial premises.
What’s in this Sublease?
NZ lawyers have designed this Sublease for NZ businesses. It is simple, short, easy to understand, without unnecessary legalese and fair to both sides, to reduce negotiation time and keep the relationship positive.
In the document, the sub-landlord (tenant of the premises) leases the ‘subleased premises’ to the subtenant. The key terms of the sublease are clearly stated, such as duration (the sublease is designed for one term), expiry date, rent, rent review dates (and method), outgoings, and permitted use of the subleased premises. The sub-tenant agrees to comply with the head lease (a copy of which needs to be given to the subtenant before signing the sublease) and pay all costs or liability of the sub-landlord if it doesn’t. There are optional provisions for a guarantee (if the sub-tenant is a company) and a bank guarantee.
If you are the sub-landlord, you must check your head lease to see if head landlord consent is required – most leases will require approval and there may be conditions or criteria to meet to get that approval.
How long will it take to create my Sublease?
Approximately 10 -15 minutes – whenever and wherever you want! During the Q&A you can save your progress to come back later, or repeat the Q&A to change an answer or produce a new version of a document.
What information do I need to complete the Q&A?
- The name and contact details of the sub-landlord, sub-tenant, any guarantor(s) of the subtenant, and the head landlord
- Details of the premises being subleased (including the option to attach a plan)
- Duration (known as the ‘term’), commencement date, expiry date, rent, outgoings, rent review dates (and method), permitted use of the property and the condition of the subleased premises at the start of the sublease
- Details of any guarantee or bank guarantee
What if I need help?
We’d love to help. Just contact us at hello@onyourterms.co.nz and we can either help over email or jump on a call.
Your document will be downloadable in MS Word, so you can make changes if you like (and add branding). Also, our legal partner, Luminate Legal, can provide legal advice for a fixed price if you’d like it.
What do I do once my Commercial Sublease Agreement is created?
The Sublease is ready to sign as soon as you have downloaded it. All parties must sign it to ensure it’s legally enforceable. If you need help with how to sign the Sublease, read our helpful blog: Who can sign legal documents in New Zealand?
Committing to a sublease can be a significant financial and business decision. It's crucial that the sub-landlord, sub-tenant and guarantor (if there is one) read and understand the Sublease and their rights and obligations and get legal advice if needed.
Other helpful information:
- Check out our blogs including Sublease or Property Licence? Commercial lease agreements in New Zealand, Help! How can I get out of my business lease early?
- You may also find these bundles or documents useful for your business: Property Licence, Agreement to Lease, Deed of Surrender of Lease, Deed of Assignment of Lease, Deed of Variation of Lease
- Check out our FAQs here
If you’re not satisfied with your purchase of this product for any reason, let us know why within 10 days of your purchase and we’ll work with you to make sure you’re happy, including giving you a full refund if necessary.
Disclaimer: On Your Terms was created to provide fast, easy and affordable access to legal information and documentation. We are not a law firm and do not provide legal advice. The information and documents we provide are of a general nature, designed for common situations, and may not be suitable for your needs or circumstances. If you need legal advice, we have a network of specialist law firm partners able to help you here.