A short guide to subletting your office and creating sublet areas

A short guide to subletting your office & creating sublet areas

A sublet office allows an existing business to let a part of their property to a different company, which works particularly well if you have a large office space. Of course, you have to be granted permission by the landlord first.

Some of the reasons a business might choose to sublet their available space could include;

  • They are looking to reduce overheads
  • They have more space than they actually need
  • They have outgrown the space and are looking to move, but still have a current lease in effect that they don’t want to break
  • Or, as is likely right now, due to the recent Covid-19 Pandemic, they have dramatically changed the way the operate and don’t need as much space but still have lease to honour

Here are some questions to ask yourself if you’re on the fence about subletting:

  1. Will it make you money?

Businesses are often surprised when they find out the subletting can actually make them a profit. If your business occupies an office in a desirable area then it is likely there will be many potential tenants willing to pay a little bit more rent for that space.

  1. Do you have a sublessee in mind?

Subletting is a much easier process if you already have a potential tenant in mind that you know and trust. In a sublet agreement you are still likely to be responsible for any possible damage made to the property, therefore it could be better for you if the sublessee is someone you can trust. However, do not let this put you off choosing a business that you don’t know as well. People who tend to sublet shared commercial spaces are usually more careful with the way they treat it as they are aware that it’s not legally theirs.

  1. Will you still be occupying part of the space?

If you are only subletting a part of your office then it’s important to consider the logistics that come with sharing an office or building with another business. For the subletting agreement to work, you will have to make sure the businesses can comfortably coexist. Some of the areas you may have to share include common areas, toilet facilities and parking spaces. However, a less tangible but arguably more important issue to consider is office culture. If you have a more relaxed business approach whereby music is allowed in the office and pets are welcome then you may not be able to work side by side a company with more a formal business culture.

Creating a sublet area

Even if you have a large office you might find that there isn’t an obvious area for you to sublet to another company. However, it is fairly easy to create sublet areas by installing wall dividers or glass partitions to section off the workspace. This could be done within a corner of an office that isn’t used as much, or it could be done as drastically as moving the whole office to one side of the room (as long as employees are still comfortable and have freedom and flexibility to move around). If you are interested in creating a sublet area it could be worth getting in touch with an office fit out company who will be able to plan and design a suitable and unique space that works perfectly with the available space.

What you need to do next:

  • Talk to your landlord – Before advertising that you are looking for a sublessee it is important to talk to your landlord first and get approval. Most landlords will be happy with the idea of subletting, however, it’s important not to assume this.
  • Find a suitable tenant – When advertising for a new tenant to share your office space, make sure you are clear about who exactly you want to share the space with (e.g. size of business, type of business and company culture).
  • Agree a price – Propose a figure to the new business based on how much you want to gain from the sublet agreement and have a figure in mind that you won’t except any less than.
  • Create an agreement – Instruct a property solicitor to write up an agreement that covers things such as rent due dates, then have the agreement checked by a legal professional to ensure you have all terms and conditions covered.

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