Sublease Agreement

---
name: sublease-agreement
description: Drafts commercial sublease agreements subordinate to a master lease, with tripartite protections for sublessor, sublessee, and landlord. Reviews master lease for consent requirements, use restrictions, and subletting conditions before generating. Use when drafting sublease agreements, commercial subleases, subletting contracts, or subtenancy agreements.
tags:
  - agreement
  - drafting
  - transactional
---

# Commercial Sublease Agreement

Drafts an execution-ready sublease subordinating the subtenancy to the master lease while protecting all three parties (sublessor, sublessee, landlord).

## Quick Start

Collect before drafting:

1. **Master lease** — executed copy with amendments; extract term, rent, consent requirements, subletting provisions, use restrictions, maintenance obligations
2. **Parties** — legal names, addresses, entity status for sublessor and sublessee
3. **Premises** — address, unit/suite, square footage, exclusive vs. shared areas
4. **Deal terms** — sublease term, monthly rent, security deposit, utility allocation
5. **Landlord consent status** — obtained, pending, or waived by master lease

## Core Workflow

### Step 1: Review Master Lease

Extract and flag before drafting:

| Item | Look For |
|------|----------|
| Subletting clause | Consent required? Conditions? Profit-sharing? |
| Notice provisions | Required method/timing for subletting notice |
| Use restrictions | Permitted use, prohibited activities |
| Assignment/transfer | Restrictions flowing to subtenants |
| Insurance | Minimum coverage, additional insured requirements |
| Default provisions | Whether subtenant breach triggers master default |
| Term remaining | Sublease must not exceed master lease term |
| Rent restrictions | Caps on sublease rent markup |

Flag gaps or conflicts for user resolution before proceeding.

### Step 2: Draft Document

```
SUBLEASE AGREEMENT

1.  Preamble & Recitals
2.  Defined Terms
3.  Premises Description
4.  Term
5.  Rent & Financial Terms
6.  Security Deposit
7.  Utilities & Maintenance
8.  Master Lease Incorporation
9.  Use Restrictions & Occupancy
10. Insurance & Indemnification
11. Default & Remedies
12. Termination & Surrender
13. Notices
14. Dispute Resolution
15. General Provisions
16. Execution & Acknowledgment

Exhibit A — Master Lease (copy)
Exhibit B — Premises Diagram (if partial sublease)
Exhibit C — Personal Property Inventory (if applicable)
Exhibit D — Move-In Condition Report
```

### Step 3: Apply Section Requirements

**Preamble** — Identify all three parties; reference master lease by date/parties/property; state landlord consent status and sublessor's good standing.

**Premises** — Full address, unit, square footage. Partial subleases: delineate exclusive, shared, and retained areas precisely. Itemize included fixtures/personal property.

**Term** — Exact start/end dates; must terminate before master lease expiration with buffer. Include auto-termination on master lease termination, holdover consequences, and early termination rights (conditions, 30–90 day notice, fees, restoration).

**Rent & Financial Terms** — Amount (numerical + written), due date, payment method. Address rent escalation pass-through from master lease. Late fee with 3–5 day grace period (comply with statutory maximums). NSF fees and certified funds requirement.

**Security Deposit** — Comply with jurisdictional caps. Separate account (interest-bearing if required). Permitted deductions: unpaid rent, damages beyond ordinary wear, cleaning. Return per jurisdiction (typically 14–30 days) with itemized accounting.

**Utilities & Maintenance** — For each utility: included in rent, sublessee pays direct, or reimbursed. Specify shared utility allocation method. Minor maintenance (sublessee): cleaning, filters, sublessee-caused damage. Major maintenance (sublessor): structural, HVAC, plumbing, electrical. Sublessee must promptly report defects.

**Master Lease Incorporation** — All master lease terms bind sublessee as if original tenant. Sublessee rights cannot exceed sublessor's rights. Master lease violation = material sublease breach. Attach master lease as Exhibit A; include sublessee acknowledgment of receipt/review.

**Use Restrictions** — Permitted use matching or narrowing master lease. No alterations without written consent; restoration obligations. No further subletting/assignment without sublessor and landlord consent. Occupancy limits per code.

**Insurance & Indemnification** — Sublessee liability insurance: $100K–$300K minimum. Sublessor as additional interested party; proof before possession. Mutual indemnification with attorney's fees. Force majeure (rent continues unless premises uninhabitable).

**Default & Remedies** — Monetary default: 3–5 day cure after written notice. Non-monetary curable: 10–15 day cure. Incurable (illegal activity, material misrepresentation): no cure. Remedies: termination, eviction, deposit retention, damages, attorney's fees. Surrender: clean condition, property removed, keys returned within 24–48 hours.

**Notices** — Written required via personal delivery, certified mail, overnight courier, or email with confirmation. Effective: immediately (personal), 3 business days (mail), 1 day (courier), upon confirmation (email). Designated addresses; change-of-address procedure.

**Dispute Resolution** — Governing law: state of property. Venue: county of property. Mandatory mediation before litigation (costs split). Optional binding arbitration (e.g., AAA). Prevailing party attorney's fees.

**General Provisions** — Severability, entire agreement, written amendments only, non-waiver, assignment by sublessor with landlord consent.

**Execution** — Signature blocks for both parties (printed name, signature, date). Entity signatories: name/title, authority representation. Sublessee acknowledgment of master lease receipt and subordination. Landlord consent block if required (signature, scope, whether direct obligations created). Notary blocks if jurisdictionally required.

## Pitfalls

- **Term overflow** — sublease must never extend beyond master lease expiration; include buffer for sublessor restoration obligations
- **Absolute prohibition** — do not draft if master lease prohibits subletting without evidence of landlord consent or waiver
- **Conditional consent** — if landlord consent is a condition precedent, make sublease effectiveness contingent on obtaining it
- **Jurisdiction-specific rules** — verify security deposit caps, required disclosures, rent control/markup restrictions, habitability standards
- **Statutory citations** — mark uncertain references with [VERIFY] for the specific jurisdiction
- **Master lease conflicts** — flag any provisions conflicting with proposed sublease terms for user resolution
- **Plain language** — avoid archaic legalese while maintaining enforceability