5 Issues to Consider if Subleasing Your Business Premises

Remote working or working from anywhere approach has led some businesses to consider what to do with their now excess office space.  


‘Stay Home’ announced the Taoiseach to a wide-mouthed audience in March 2020. Little did we know then many people would not see the inside of their workplace for months, and for some, it would be even longer before they would return to the office.

The Pandemic disrupted labour markets globally and, in Ireland, most office-based teams quickly adjusted to working from home as offices closed. People embraced virtual meetings and the convenience of other online activities to the point that many businesses have pivoted to flexible work arrangements post-Pandemic.

However, accommodating remote working does not mean that office has become obsolete, but it has led to many businesses having surplus space now.

If your business has embraced flexible working arrangements, you might be considering how to maximise unused office space and reduce your exposure to rental costs. One way to optimise unused space is subleasing.

What is Subleasing

Subleasing means letting a portion of your space to a subtenant. While you would still be responsible for paying the rent, rates and service charge on the full space, a subtenant can help offset overheads by covering these costs on the space they occupy.

Subleasing needs to be carefully considered as there are many factors that come into play. Cathy McFadden, Associate with Whitney Moore’s Real Estate team outlines the 5 key areas to consider carefully in this area.

1.Consent from your Landlord

Before you approach the market, you need to be clear about the terms of your lease. Subletting part of your premises may be completely prohibited or may be permitted provided that you apply for and obtain your landlord’s consent.

 2. Costs

You may also be responsible for paying your landlord’s costs in respect of the application for consent.

3. Understand Your Lease

In addition to governing whether the landlord’s consent is required, your lease may also dictate the terms of the sublease from the passing rent to the rent review provisions. Particular attention needs to be paid to any break option in your own lease, and the impact subleasing may have on your ability to exercise the break option. We will be able to provide you with clear guidance on what you can and cannot do when discussing terms with a potential subtenant.

4. Negotiating Commercial Terms

Like any commercial transaction, it is important to have precise knowledge of the terms required to ensure you meet your objectives, have expert drafting of those terms as well as the confidence to negotiate.

5. Choose Carefully  

A subtenant who cannot pay its bills will undermine your objective, so carrying out due diligence on any potential subtenant at the outset can help avoid problems down the line. Reference checks etc.

For further information on subleasing part or all of your space, please contact Cathy McFadden, Associate with our Real Estate team, email cathy.mcfadden@whitneymoore.ie or see our website www.whitneymoore.ie

About Cathy McFadden:

Cathy practises in our Real Estate team and is known for delivering concise legal advice and commercial solutions. Cathy has focused her practice on commercial property for over a decade dealing with all aspects of property transactional work whilst acting for a variety of clients across the property spectrum. Her experience lends itself to both the private and public sectors in the jurisdictions of Ireland, Northern Ireland and England and Wales.