master lease business definition
- A lease that allows an existing lessee to lease additional assets under similar terms and conditions as the current lease without being required to negotiate a new contract.
- A controlling lease for a property to which any subleases must conform. For example, a sublease cannot be for a longer term than the master lease.
Am I required to obtain permission from the lessor in order to sublease an office or apartment?
The vast majority of leases for residential and commercial properties do not allow the primary tenant to sublease the property unless written permission from the landlord is obtained. Absent any language in the lease that grants permission to do so, the tenant cannot legally sublease. Subleasing is a temporary transfer of occupancy rights to a property granted by the primary tenant, or lessee, to a subtenant, or sublessee. The primary tenant remains fully and legally obligated to the landlord, or lessor, for rent payment and upkeep of property, while the subtenant is obligated only to the primary tenant. Although most leases preclude subleasing, it occurs frequently in residential properties. For example, a college student signs a one-year lease ending July 31, and she subleases to a friend for June and July. Typically the landlord is not aware of this arrangement. If the landlord had to take legal action for late rent, for example, it would be against the primary tenant
Subleasing may be allowed (with landlord approval) in commercial leases, especially long-term leases to large national or regional companies. When the original lease term has expired, the subtenant must either move out or negotiate a new lease with the landlord. Subleasing is not to be confused with a lease assignment, which is a permanent transfer of all of the legal rights and obligations from the original tenant, or assignor, to a new tenant, or assignee. Most commercial leases allow assignments with the landlord's written permission, which would be granted after the landlord approves the assignee tenant. After the assignment, typically only the new assignee tenant is obligated to the landlord.
Scott Alderman, Broker and President, First Commercial Real Estate, Valdosta, GA