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How to bold light in the Commercial Sublease Contract

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[Music] oftentimes whether for financial reasons or to make better use of a space a tenant who is under a lease for commercial property can re-rent a certain area or all of the space to a sub-tenant by using a commercial sublease agreement however sub-leasing goes beyond simply drafting a document and assuming a role in the tenant sub-tenant relationship thats why in this video well discuss noteworthy measures to take when subleasing commercial property and well summarize how to create an effective legally binding agreement make sure that you watch to the end of this video for an official template what is a commercial sublease agreement a commercial sublease agreement is a document used by an individual or business entity attempting to sublet part or all of the commercial space that they currently occupy under a lease with its owner the reasoning behind the original tenant seeking a sublease varies from case to case for instance if the property contains office space the current tenan

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What happens to a sublease when a head lease expires?

Where a headlease is surrendered. The intermediate tenant under the headlease falls away and the tenant under the sublease becomes the direct tenant of the superior landlord. This means that the premises will continue to be occupied by the tenant on the terms of the sublease.

How can a headlease be terminated?

The general rule is that a lease may only be terminated during the term of the lease if the lease contains a tenants break clause. If it does not, the lease can be terminated early by way of surrender however the landlord will need to be in agreement.

What happens to an underlease if the head lease is surrendered?

Statute intervenes on surrender of a lease. It is a consensual termination and the tenants interest is deemed to pass to the landlord subject to the rights of the undertenant. The effect of a merger is the same. The underlease survives and the landlord takes the benefit and burden of the underlease covenants.

What happens to sublease on forfeiture of headlease?

If the headlease is forfeited, this automatically ends any sub-lease. Clearly, this is unfair to sub-tenants, who stand to lose their interest through no fault of their own.

What is the nature of a sublease?

In a sublease a lessee subleases the underlying asset to a third-party sublessee; the entity is then referred to as the intermediate lessor (or sublessor). In a sublease transaction, the lease between the original lessee and lessor (referred to as the head lease) remains in effect.

What are the rules for subletting in Ontario?

The provisions for subletting a rental unit apply to all tenancies whether they are for a fixed term or not. Subletting is subject to the consent of the landlord, which cannot be unreasonably or arbitrarily withheld. The sublet must end on a date specified before the end of the tenants term or period.

What are the responsibilities of a commercial landlord in Ontario?

The landlord is responsible for all the expenses of operating the building, including taxes, insurance and repairs. A net lease requires that you pay for some (or all) of the real estate taxes on the property, in addition to the base rent. Building operating costs are the responsibility of the landlord.

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