Definition Definition

What is Sublease? Understanding the Term and It's Key points

What Is Sublease?

A sublease is a contract for residential or commercial space between original tenants and another third party, usually referred to as sub-tenants, for a defined time. The sublease agreement allows a person to avoid the penalty of breaking the lease contract. 

However, subleasing may be restricted by additional regulations depending on the jurisdiction. And not all landlords allow sublease agreements between tenants and subtenants.

Understanding the Term Subleasing 

Understanding the terms of lease, lessee, and the lessor is essential to understanding subleasing fully.

  • Lease

 It's a contract between two parties, where one party is the owner of the property, and the party is the tenant who uses the property in exchange for monthly rent for a defined time in the contract.

  • Lessee

 The lessee, also known as a tenant, is the temporary occupant of the property.

  • Lessor

 The lessor, also known as the landlord, rents the property to the lessee.

So, a sublease is an agreement that is a lease within a lease between tenant and subtenant with the landlord's permission. This agreement allows the original tenant to transfer part of their tenancy to the third party.

Under a sublease contract, both tenant and subtenant are responsible for paying rent and service fees if required. However, original tenants should also know that a sublease contract does not release them from the obligation of the contract with the landlord.

In a nutshell, this is how a sublease works,

A sublease contract allows the subtenant to pay the rent to the original tenant, and the original tenant pays the rent to the property owner or landlord.

Key Points of Sublease Agreement

A sublease agreement has the following features

  • The lessor or landlord formed a contract between the initial tenant or original tenant
  • The original tenant entered into a contract with the subtenant and formed a sublease contract
  • The original tenant is known as the lessee, while the subtenant know as the sublessee
  • Both lessee and sublessee are responsible for monthly rent, and service fees under the original lease contract
  • The original tenant will be responsible for late payments and damage fees if due or property damage occurs during the tenancy period.


If a tenant has a 12-month lease on a flat in location "X" and suddenly has to move into location "Y" during month four, the tenant may choose to sublease the flat to a third person, aka subtenant, for the remaining eight months. The original tenant can move to location "Y" without paying a penalty fee to get out of the lease agreement or pay rent in two places.

In Sentences

  • This ad agency subleases its office space to a software firm. 
  • He subleases his apartment to a student this summer.
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