Commercial Sublease Agreement

Commercial Sublease Agreement

Drafting note: This is a framework for review by commercial real-estate counsel. Complete the schedules, reconcile every obligation with the master lease and landlord consent, and confirm applicable law before execution. Remove instructions and unused alternatives only after review.

This Commercial Sublease Agreement ("Sublease") is entered into as of [DATE] between [SUBLESSOR LEGAL ENTITY NAME], a [ENTITY TYPE AND JURISDICTION], with a notice address at [ADDRESS] ("Sublessor"), and [SUBTENANT LEGAL ENTITY NAME], a [ENTITY TYPE AND JURISDICTION], with a notice address at [ADDRESS] ("Subtenant").

Landlord: [LANDLORD LEGAL NAME AND NOTICE ADDRESS].

Master Lease: The lease dated [DATE] between Landlord and Sublessor, together with the amendments listed in Exhibit D, for [MASTER PREMISES ADDRESS AND DESCRIPTION].

1. Landlord Consent and Effectiveness

(a) This Sublease is conditional on receipt of Landlord's written consent to the premises, use, term, and other arrangements described here. The signed consent shall be attached as Exhibit A. Subtenant shall not take possession or begin work before the consent and other agreed delivery conditions are satisfied.

(b) If consent is not obtained by [OUTSIDE DATE], either party may terminate this Sublease by written notice before consent is obtained. Sublessor shall return amounts paid by Subtenant under this Sublease within [NUMBER] business days after that termination, subject to any different allocation of documented consent expenses expressly agreed in Exhibit A.

(c) Landlord's consent does not release Sublessor from the Master Lease unless Landlord expressly agrees in writing. Any recognition, non-disturbance, or direct rights against Landlord must be set out in a separate agreement signed by Landlord.

2. Premises and Shared Rights

Sublessor subleases the commercial premises at [FULL ADDRESS, FLOOR, SUITE], consisting of approximately [AREA] [RENTABLE/USABLE] square feet, as outlined on the plan in Exhibit B ("Premises"). The agreed area measurement and any expense-allocation area are specified separately in Exhibit E.

Exhibit B shall identify exclusive space, shared entrances and corridors, shared facilities, loading access, parking, permitted hours of access, and any equipment or fixtures included in the Sublease. No residential occupancy is authorized.

3. Term and Delivery

(a) The term begins on [COMMENCEMENT DATE OR DEFINED DELIVERY EVENT] and ends on [EXPIRATION DATE], unless ended earlier under this Sublease. The Master Lease currently expires on [DATE]. No extension of this Sublease is effective beyond the available Master Lease term without the required written agreements and consents.

(b) Delivery condition, approved improvements, responsibility for permits, rent commencement, and remedies for delayed delivery are set out in Exhibit C. The parties shall sign a condition report when possession is delivered.

(c) Any renewal option or early termination right must be expressly stated in Exhibit C, including notice dates and dependencies on Landlord or the Master Lease. No renewal right is implied.

4. Base Rent

(a) Subtenant shall pay base rent of $[AMOUNT] per month, due on [DAY], using the payment instructions separately verified with Sublessor. Scheduled increases and any rent concession are listed in Exhibit E.

(b) Base rent for a partial month shall be prorated using [AGREED METHOD]. Any late charge, interest, or returned-payment charge must be stated in Exhibit E and shall apply only to the extent permitted by applicable law.

(c) Sublessor remains responsible for paying Landlord the amounts required under the Master Lease. Payments under this Sublease do not release that obligation.

5. CAM, Operating Expenses, and Additional Rent

(a) Exhibit E shall select the rent structure and list every permitted charge in addition to base rent. If no additional charge is identified there, Subtenant owes no CAM or other operating-expense pass-through under this Section.

(b) For each permitted pass-through, Exhibit E shall specify the expense category, allocation percentage or formula, calculation base, billing period, exclusions, and any cap. If the allocation is a share of Sublessor's landlord-billed charges, it shall apply to those charges only; a building allocation shall not be applied a second time. No cost may be recovered twice through base rent, a separate service charge, or another pass-through.

(c) Estimated monthly payments, if any, shall be supported by an expense statement. Within [NUMBER] days after Sublessor receives the corresponding final statement from Landlord, Sublessor shall provide a reconciliation showing the actual permitted charges, Subtenant's allocation, amounts already paid, and the resulting credit or balance. Credits and balances shall be settled within [NUMBER] days.

(d) Subtenant may review the supporting statements and records available to Sublessor on [NUMBER] days' notice. Exhibit E shall state the review/dispute period and procedure, coordinate it with any Master Lease deadline, and address cooperation in requests to Landlord. Sublessor shall not promise access to Landlord records it has no right to obtain.

(e) Consent fees, sublease-profit sharing, management fees, capital items, taxes, insurance charges, and other special costs are payable by Subtenant only to the extent expressly allocated in Exhibit E.

6. Security Deposit

Subtenant shall pay a security deposit of $[AMOUNT], in the form of [CASH/AGREED SECURITY], to secure its obligations. The parties shall specify permitted deductions, any replenishment requirement, holding arrangements, and the return deadline in Exhibit E, subject to applicable law. Sublessor shall provide an itemized accounting and return the remaining balance by that deadline. The condition report in Exhibit C shall be used when assessing restoration or damage charges.

7. Permitted Use and Compliance

The Premises may be used only for [SPECIFIC COMMERCIAL BUSINESS AND ACTIVITIES], consistent with the Master Lease, Landlord's consent, and applicable law. Exhibit C shall allocate responsibility and cost for zoning confirmation, business licenses, occupancy permits, accessibility work, and other approvals. This allocation does not limit obligations imposed by law on either party. Changes of use, signage, hazardous materials, unusual loads, and activities outside approved operating hours require the approvals identified in the Master Lease and Exhibit A.

8. Master Lease and Continuing Obligations

(a) The complete Master Lease and amendments are attached as Exhibit D. The obligations applicable to Subtenant's premises and use, and any agreed exclusions or modifications between these parties, shall be identified in Exhibit D. This Sublease does not amend Landlord's rights under the Master Lease.

(b) Subtenant shall not cause a default under the Master Lease. Sublessor shall keep the Master Lease in effect and perform its obligations, except to the extent performance is prevented by Subtenant's breach. Each party shall promptly provide the other with material notices affecting the Premises, including default, termination, service interruption, and renewal notices.

(c) Sublessor shall not voluntarily surrender the Master Lease or agree to an amendment materially reducing Subtenant's rights or increasing its obligations without Subtenant's prior written consent, except as expressly agreed in Exhibit D. This covenant does not bind Landlord or prevent Landlord from exercising its own rights.

9. Utilities and Services

Exhibit E shall identify utilities and services included in base rent, separately metered to Subtenant, or shared under a stated allocation formula. It shall address service hours, after-hours HVAC, internet/telecommunications, trash, janitorial service, and any interruption remedy. Utility charges shall not duplicate amounts recovered as CAM or other additional rent.

10. Maintenance, Alterations, and Surrender

(a) Exhibit C shall allocate routine maintenance, equipment, HVAC, structural elements, building systems, and repair costs consistently with the Master Lease. Subtenant shall keep the Premises in the agreed condition, ordinary wear excepted, and promptly report defects or emergencies.

(b) For work that remains Landlord's responsibility, Sublessor shall promptly request performance and keep Subtenant informed. Any agreed substitute-performance or rent-relief right must be stated expressly in Exhibit C and coordinated with the Master Lease.

(c) Alterations require the written approvals specified in Exhibit A and the Master Lease. Exhibit C shall allocate design, permit, contractor, lien, inspection, ownership, removal, and restoration obligations. On surrender, Subtenant shall deliver the Premises in the condition required by those agreed obligations.

11. Insurance and Indemnity

(a) Before possession or work begins, Subtenant shall obtain the commercial general liability, business property, workers' compensation where required, and other coverage specified in Exhibit F. That exhibit shall state limits, additional insureds, required endorsements, waiver-of-subrogation provisions, and evidence-of-coverage requirements consistent with the Master Lease. A certificate alone does not amend a policy.

(b) Each party shall indemnify the other against third-party claims to the extent caused by the indemnifying party's negligence, willful misconduct, or breach of this Sublease, subject to applicable law and the specific defense procedures, exclusions, and limits agreed with counsel in Exhibit F. No party is required by this paragraph to indemnify the other for the other's own negligence or willful misconduct. The parties shall reconcile this allocation with insurance and any Master Lease indemnity before execution.

12. Default, Casualty, and Termination

(a) Default notice and cure periods are specified in Exhibit D and shall comply with applicable law. The parties shall coordinate them with the Master Lease so that Sublessor has time to address a landlord notice. Remedies must be exercised through lawful procedures; this Sublease does not authorize unlawful lockout or self-help.

(b) Casualty, condemnation, service interruption, and loss of required approvals shall be addressed in Exhibit C, including any abatement or termination right and its relationship to the Master Lease.

(c) Unless a separate agreement with Landlord provides otherwise, Subtenant's occupancy rights under this Sublease end when the Master Lease ends. Sublessor shall give prompt notice of a threatened or actual termination. Termination does not erase accrued obligations or claims between the parties. Prepaid rent and the deposit shall be accounted for under Exhibit E and applicable law.

(d) Holding over creates no renewal right. Any agreed holdover charge and damages allocation are stated in Exhibit E, subject to applicable law and the Master Lease. Subtenant shall not remain without the required written agreement.

13. Transfers, Access, and Notices

Subtenant shall not assign this Sublease, further sublet, or permit another business to occupy the Premises without the written consents required by Exhibit A, Exhibit D, and applicable law. Landlord and Sublessor may enter as permitted by the Master Lease and this Sublease for approved purposes, on [NOTICE PERIOD] except in emergencies, while reasonably limiting disruption. Formal notices shall use the addresses and delivery methods in Exhibit D; changes must be notified in writing.

14. Governing Law and Complete Agreement

This Sublease is governed by the laws of [STATE]. This Sublease, its completed exhibits, and the signed landlord consent contain the parties' agreement concerning the Premises. Any inconsistency with the Master Lease must be resolved with counsel and, where necessary, Landlord before execution. Amendments require the parties' written agreement and any required landlord consent.

Exhibit A — Landlord Consent Record

Attach the actual written consent required by Landlord and the Master Lease. This record is not a consent form and cannot bind Landlord. Consent document title/date: [DETAILS]. Signed by Landlord's authorized representative: [NAME/TITLE/DATE]. Approved premises, use, term, work, signage, and transfers: [DETAILS AND CONDITIONS]. Consent fees and responsible party: [AMOUNT/PARTY/DUE DATE]. Recognition or non-disturbance agreement: [ATTACHED DOCUMENT OR NONE]. Outside consent date: [DATE, MATCH SECTION 1]. Confirm that every condition is satisfied before possession: [CONDITION/RESPONSIBLE PARTY/EVIDENCE/DATE; REPEAT AS NEEDED].

Exhibit B — Premises and Access Schedule

Attach a labeled plan signed or initialed by both parties. Exclusive premises: [FLOOR/SUITE/BOUNDARIES]. Area: [NUMBER/UNIT/MEASUREMENT STANDARD]. Shared areas and each party's rights: [LIST]. Parking: [SPACES/LOCATION/HOURS/CHARGES, ALSO LIST CHARGES IN EXHIBIT E]. Loading and deliveries: [LOCATION/HOURS/RULES]. Building access: [DAYS/HOURS/KEYS/SECURITY]. Included fixtures and equipment with condition: [ITEM/OWNER/CONDITION; REPEAT]. Excluded areas or equipment: [LIST].

Exhibit C — Delivery and Responsibility Schedule

Complete each responsibility row with the party that performs the work, the party that pays, required approvals, and the deadline. Mark unused items 'not applicable'; naming Landlord here creates no new obligation for Landlord.

• Delivery and condition report: [REQUIRED CONDITION/DELIVERY DATE/INSPECTION DATE/DEFECT LIST/REMEDY DEADLINE]. Rent begins [DATE OR EVENT]. If delivery is delayed, rent treatment is [TERMS]; after [OUTSIDE DATE], [PARTY] may terminate by [NOTICE METHOD/PERIOD], with prepaid amounts returned within [NUMBER] days.
• Zoning, occupancy, business licenses, accessibility, and use approvals: [APPROVAL/PERFORMING PARTY/PAYING PARTY/DEADLINE; REPEAT FOR EACH]. Failure to obtain approval by [DATE] permits [TERMINATION OR OTHER AGREED REMEDY/REFUND TERMS].
• Improvements and alterations: [WORK/SPECIFICATION/DESIGN/PERMIT/CONTRACTOR/PAYING PARTY/APPROVAL/COMPLETION DATE; REPEAT]. Lien releases and inspection evidence due [DETAILS]. Ownership on installation: [TERMS]. Required removal/restoration at surrender: [ITEMS/STANDARD/RESPONSIBLE PARTY].
• Routine interior maintenance: [PERFORMING PARTY/PAYING PARTY/STANDARD/RESPONSE TIME].
• HVAC and equipment: [ITEM/PERFORMING PARTY/PAYING PARTY/SERVICE STANDARD/REPLACEMENT RESPONSIBILITY].
• Structural elements, roof, and building systems: [ITEM/MASTER LEASE SECTION/RESPONSIBLE PARTY/REQUEST AND FOLLOW-UP PROCEDURE].
• Casualty or condemnation: notice due [PERIOD]; restoration responsibility [PARTY/SCOPE/DEADLINE]; rent abatement [FORMULA/START/END/DEPENDENCE ON MASTER LEASE RELIEF]; termination available to [PARTY] if [TRIGGER], by notice within [PERIOD]; prepaid-rent treatment [TERMS].
• Service interruption: [SERVICE/TRIGGER/NOTICE/REPAIR PROCEDURE/ABATEMENT OR NONE/TERMINATION THRESHOLD OR NONE]. No deduction or substitute performance is authorized except [EXPRESS TERMS COORDINATED WITH MASTER LEASE].
• Surrender: [CONDITION/REMOVAL/REPAIR/CLEANING/KEY RETURN/JOINT INSPECTION DATE]. Compare with the signed delivery condition report; ordinary wear is excepted under Section 10.
• Renewal or early termination: [NONE, OR OPTION HOLDER/TERM/RENT/NOTICE WINDOW/CONDITIONS/REQUIRED LANDLORD AGREEMENT].

Exhibit D — Master Lease, Obligations, and Notice Schedule

Attach the complete Master Lease dated [DATE] and amendments [DATES/DESCRIPTIONS]. Confirm receipt by Subtenant [DATE]. For each incorporated obligation, complete: [MASTER LEASE SECTION/OBLIGATION/APPLICATION TO SUBTENANT/AGREED EXCLUSION OR MODIFICATION BETWEEN THESE PARTIES]. Include use, repairs, access, alterations, transfers, insurance, indemnity, and surrender. Excluded provisions: [LIST OR NONE]. Resolve conflicting duties expressly before signature; this schedule cannot change Landlord's rights.

• Formal notice to Sublessor: [RECIPIENT/ADDRESS/DELIVERY METHODS/WHEN EFFECTIVE]. Formal notice to Subtenant: [SAME FIELDS]. Landlord notice provisions: [MASTER LEASE SECTION/ADDRESS/METHOD]. Email is effective only if expressly selected: [ADDRESS AND CONDITIONS OR NOT AUTHORIZED].
• Copy of a material landlord notice must be forwarded within [PERIOD] after receipt, by [METHOD]. Emergency contact and method: [EACH PARTY/DETAILS].
• Monetary default: written notice [REQUIREMENT], cure period [NUMBER/DAYS], Master Lease deadline [DETAILS], reserved time for Sublessor to cure [PERIOD].
• Nonmonetary default: written notice [REQUIREMENT], initial cure period [PERIOD], permitted extension for diligent cure [CONDITIONS/MAXIMUM], Master Lease deadline [DETAILS]. Counsel must reconcile all periods with mandatory law and upstream deadlines.
• Assignment, further subletting, or occupancy change: [REQUIRED CONSENTS/REQUEST INFORMATION/RESPONSE PROCEDURE/FEES ALLOCATED IN EXHIBIT E].
• Exceptions to Section 8's restriction on surrender or amendment: [NONE OR SPECIFIC WRITTEN AGREEMENT].

Exhibit E — Rent, Expenses, Utilities, and Deposit Schedule

Complete all amounts and formulas; identify unused charges as 'none'. Do not apply a building allocation again to charges already allocated to Sublessor.

• Base rent periods: [START/END/MONTHLY AMOUNT; REPEAT]. Concessions: [AMOUNT/PERIOD/CONDITIONS OR NONE]. Due day [DAY]. Partial-month formula [METHOD]. Late charge [AMOUNT/TRIGGER OR NONE]; interest [RATE/TRIGGER OR NONE]; returned-payment charge [AMOUNT OR NONE], all subject to applicable law.
• Rent structure: [SELECT: BASE RENT INCLUDES ALL OPERATING EXPENSES / ONLY THE PASS-THROUGHS LISTED BELOW APPLY]. For each permitted expense complete [CATEGORY/CALCULATION BASE/ALLOCATION/BILLING PERIOD]. Formula: Subtenant charge = [ACTUAL ELIGIBLE COST BASE] multiplied by [AGREED SHARE] less [APPLICABLE CREDITS]. Cost base is [LANDLORD-BILLED AMOUNT ALREADY ALLOCATED TO SUBLESSOR / BUILDING TOTAL / OTHER DEFINED BASE]. If area-based, share = [SUBLEASE ALLOCATION AREA] divided by [MATCHING DENOMINATOR AREA]; agreed share [PERCENT]. State treatment of vacancies and changes in area [TERMS].
• Expense exclusions: [LIST INCLUDING AGREED TREATMENT OF CAPITAL WORK, DEBT SERVICE, LEASING COSTS, FINES, OWNER NEGLIGENCE, AND COSTS REIMBURSED ELSEWHERE]. Items not expressly included are not chargeable. Management fees, taxes, insurance, capital items, consent fees, and profit sharing: [EACH ITEM/INCLUDED OR EXCLUDED/EXACT BASIS/PAYING PARTY].
• Expense cap: [NONE OR AMOUNT/PERCENT/BASE YEAR/CATEGORIES/CUMULATIVE OR NONCUMULATIVE/CARRYFORWARD RULE]. Apply the cap to [DEFINED AMOUNT] before calculating [DEFINED ALLOCATION], or specify the agreed sequence [FORMULA]. No duplicate recovery under Section 5.
• Monthly estimated expense payment [AMOUNT], based on statement dated [DATE]; revisions allowed [FREQUENCY/SUPPORTING DOCUMENTS/NOTICE]. Reconciliation due [NUMBER] days after receipt of Landlord's final statement, matching Section 5. Credits refunded or credited [SELECT/METHOD] and balances paid within [NUMBER] days. Final credit after expiration must be paid to [ADDRESS] within [PERIOD].
• Review rights: records available [LIST]; review notice [NUMBER] days; objection deadline [PERIOD FROM RECEIPT OF COMPLETE RECONCILIATION], coordinated with Master Lease deadline [DATE/SECTION]. Dispute notice identifies [REQUIRED DETAILS]; parties exchange support within [PERIOD] and resolve remaining disputes through [AGREED PROCEDURE]. Review costs [ALLOCATION]; overcharge threshold shifting costs [THRESHOLD OR NONE]. Sublessor will request unavailable landlord records through [AVAILABLE MASTER LEASE PROCEDURE]. Payment pending dispute [TERMS], subject to law and the agreed dispute process.
• Utilities/services: [SERVICE/INCLUDED IN BASE RENT OR DIRECT METER OR SHARED FORMULA/METER OR FORMULA/HOURS/BILLING FREQUENCY; REPEAT FOR ELECTRICITY, WATER, HVAC, INTERNET, TRASH, JANITORIAL]. After-hours charges [RATE/REQUEST METHOD OR NONE]. Interruption remedies are in Exhibit C. Remove any amounts already included in CAM.
• Security deposit [AMOUNT/FORM/HOLDER]. Permitted deductions [UNPAID AMOUNTS/DOCUMENTED DAMAGE BEYOND ORDINARY WEAR/OTHER AGREED ITEMS]. Replenishment [NOTICE/PERIOD OR NONE]. Holding and interest arrangements [TERMS SUBJECT TO LAW]. Itemized accounting and remaining balance due [NUMBER] days after [DEFINED SURRENDER EVENT], or earlier if law requires. Prepaid rent after early termination [PRORATION/REFUND DEADLINE/PERMITTED OFFSETS].
• Holdover: [AGREED RENT FORMULA/OTHER DOCUMENTED DAMAGES ALLOCATION], subject to law and required consents; no renewal is created.

Exhibit F — Insurance and Claim Procedures

Have counsel and an insurance professional reconcile this schedule with the Master Lease and available policies before execution.

• Coverage rows: [TYPE/INSURED PARTY/LIMIT/DEDUCTIBLE/REQUIRED PERIOD/MASTER LEASE SECTION]. Complete separately for commercial general liability, business property, workers' compensation where required, and any other required policy [LIST OR NONE].
• Additional insureds: [EXACT LEGAL NAMES/POLICY/REQUIRED ENDORSEMENT]. Primary/noncontributory requirements [TERMS OR NONE]. Waiver of subrogation [PARTIES/POLICIES/ENDORSEMENTS OR NONE]. Evidence due [DATE BEFORE WORK OR POSSESSION]; renewal evidence due [PERIOD]. Cancellation/change notification [AVAILABLE POLICY TERMS AND EACH PARTY'S NOTICE OBLIGATION]. Attach required endorsements; certificates alone do not alter coverage.
• Third-party claim notice: notify [RECIPIENT/METHOD] within [PERIOD] after learning of the claim; consequences of delay [TERMS SUBJECT TO LAW]. Tender defense to [PARTY/INSURER/PROCEDURE]. Defense counsel selection and conflicts [CONSENT/STANDARD/SEPARATE COUNSEL COST RULE]. Cooperation [DUTIES/COSTS]. Settlement requires [WRITTEN CONSENTS]; no admission, nonmonetary obligation, or uninsured payment may be imposed on the other party without its written consent.
• Agreed indemnity exclusions and limits supplementing Section 11: [EXCLUSIONS/LIMITS OR NONE]. Treatment of insured losses, deductibles, and waivers [TERMS]. Survival period [PERIOD SUBJECT TO LAW]. No entry may shift the other party's own negligence or willful misconduct under Section 11; any proposed different allocation requires counsel to revise the agreement consistently before execution.

Signatures

SUBLESSOR: [LEGAL ENTITY NAME]

By: ___________________________ Name: [AUTHORIZED SIGNATORY] Title: [TITLE] Date: [DATE]

SUBTENANT: [LEGAL ENTITY NAME]

By: ___________________________ Name: [AUTHORIZED SIGNATORY] Title: [TITLE] Date: [DATE]

LANDLORD CONSENT: Attach the signed consent as Exhibit A. No signature or acknowledgment by either sublease party substitutes for Landlord's required agreement.