SUBLEASE AND ASSIGNMENT

Most commercial leases for New York City office space (as well as for loft, medical, retail and showroom space) permit tenants to sublease their space. However, sublease clauses vary from landlord to landlord, and generally there are restrictions on the right to sublease. Tenants must always obtain the landlords consent to sublease space. Frequently the landlord has the right to share a proportion of the tenant’s profit from subleasing. If the sublease clause contains the “right of recapture” the landlord has a right at their discretion to recapture control of the space.

Assignment of a commercial lease differs from subleasing. When a lease is assigned, the original tenant on the lease is released from their responsibility to the landlord. The new tenant assumes that responsibility for the remaining lease term.

Sublease and assignment clauses of commercial leases are very complex. It is the responsibility of the tenant’s attorney for negotiating the most favorable sublease language.

Landlords generally prefer if an entire space is for sublease as opposed to bits and pieces.