I own a chain of shops and one is due for a new lease. Can I sublet for the time being so that I do not have to let the property go on a permanent basis?

Subletting a unit can be a shrewd way around this problem providing you have a sufficient term remaining on your lease. A retailer can retain the existing leasehold for the long term and get over the problem of paying rent in the short term. Sometimes this is a simple thing to do, provided a retailer approaches it in the right way, but with certain leases it can be complicated.

Bonita Backhouse, senior associate at law firm Thomson Snell & Passmore, says the first place to start is always the lease. She says retailers are often unaware or have forgotten what terms were agreed on subleasing, because at the time they didn’t envisage it would become an issue.

If it turns out that subletting is an option, there might still be caveats. Backhouse explains: “You need to ask, if the lease does permit sub-letting what are the conditions? The lease will almost certainly be subject to conditions and include the need to obtain the landlord’s consent.”

You should make sure you clarify what conditions must be met before the lease is sublet and then what the terms of the lease must be, and crucially how much rent the sub-lessee will pay. This is particularly important because it may be difficult to attract a sub-lessee on anything more than market value rent, which, given how rentals have fallen sharply over the past year, might be considerably less than the level you initially agreed – leaving you to pick up the shortfall.

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