To reduce the fixed costs of your business, you have decided to sublet a part of your office space in Noida. Even if a clause in your lease expressly allows you to do so or your landlord has given you consent, you must bear in mind certain peculiarities of the sub-lease system before you start.
You will become a real landlord
Beyond the traditional precautions to be taken related to the drafting of a legal act (powers of the signatory, clarification of clauses, annexes, etc.), you must be aware of a key point: you will become a real lessor! Even if you are only a tenant, in your legal relationship with your future subtenant, you will have to respect all the obligations incumbent on a lessor. For example, you will have to guarantee your subtenant a peaceful enjoyment of the office space in Noida, and the premises will have to conform to the use for which they are intended.
With few exceptions, the subtenant will never have a direct legal relationship with your landlord. In practice, you will continue to pay the entirety of your rent to the lessor, the subtenant paying you the sublet.
Do not overlook the duration of the sublease and the type of contract chosen
It will be essential to define the type of sublease you wish to grant clearly. If you want to maintain maximum flexibility, it is recommended to allow a sublet override. Limited to 36 months, this form of renting will allow you to escape the highly regulated system of commercial leases.
Conversely, in the context of a “traditional” commercial sublease, the contract will be subject to the status of a commercial lease. As an exception to these rules, the duration of the sublease may be less than nine years if the sublease is granted while your first contract is in progress. Except in very special cases, the sublease will cease automatically if your main lease ceases (for whatever reason!).
Risks of having to compensate sub-tenant
The scope of the signing of a sublease contract for office space in Gurgaon is often misunderstood, in particular about the rights created for the benefit of the subtenant. By signing a “conventional” sublease lease, you will drastically reduce your leeway in managing your lease.
As such, if your contract gives you an opportunity to terminate your lease early (usually unless otherwise stated, every three years), you will have to compensate your sub-tenant if you use this option. Conversely, you will not have to pay anything to him if you leave your premises at the end of the lease.
The pitfall of the rent revaluation action
There is another major constraint to know: the ability for your landlord to request an increase in your main rent if the sublease is higher than the rent. The calculation will be made by comparing the two rents, in proportion to the leased area, and by keeping accounts of any additional rent (rent paid by the sub-tenant, expenses proportionally higher than those of the main lease). In the absence of a strong agreement with your lessor on the amount of the potential increase, the High Court will decide.