Commercial leasing
Subletting a commercial premises in Victoria.
A sublease lets you bring in another occupier without giving up your lease, but you stay on the hook to the landlord. CMK Legal in Richmond advises tenants, subtenants and landlords across Victoria on subleases, landlord consent, and how a sublease differs from an assignment.
Solicitor-reviewed
Subleases reviewed and drafted by a Victorian commercial lawyer.
Fast turnaround
Advice back within 2 to 3 business days in most cases.
Fixed fee, quoted first
Fixed fee, quoted before we start.
Victorian leasing law
Grounded in the Property Law Act and the Retail Leases Act 2003.
How a sublease works.
On a sublease the head tenant stays in the lease and grants a lesser interest to a subtenant. The head tenant remains primarily liable to the landlord throughout, so the obligation is not handed over, only temporarily shared.
A sublease must end at least a day before the head lease, and it usually mirrors the head lease in form, with the parties and the termination date changed.
Landlord consent is the pivot. Leases typically prohibit subletting without consent, and whether that consent can be withheld depends on the wording and, for retail premises, on the Retail Leases Act 2003 (Vic).
Because the head tenant stays liable, a sublease is not a way out of the lease. If the aim is to leave for good, an assignment or a surrender is the route to look at.
Why a sublease needs care.
Sublease and assignment are kept distinct
A sublease keeps you in the lease and liable, while an assignment transfers it away. Choosing the right one depends on whether you intend to return to the premises.
Landlord consent is handled properly
Most leases require the landlord's consent to a sublease. Getting consent in the right form, on reasonable terms, avoids a sublease that is a breach of the head lease.
Your exposure as head tenant is understood
Because you stay primarily liable, a subtenant who fails to pay or damages the premises is still your problem with the landlord. The sublease needs to protect you against that.
The sublease mirrors the head lease
A sublease that does not match the head lease can leave gaps between what the subtenant owes you and what you owe the landlord. Mirroring the terms closes them.
Sublease or assignment, and why it matters.
A sublease and an assignment are often spoken of together but they do different things. On an assignment the tenant transfers its whole interest to an incoming tenant and steps out, though landlords commonly keep the outgoing tenant on the hook as a condition of consent. On a sublease the head tenant stays in the lease and grants a lesser interest to a subtenant, which means the head tenant remains primarily liable to the landlord throughout. A sublease must end at least a day before the head lease, and it usually mirrors the head lease in form.
Landlord consent is the pivot in both cases. Leases typically prohibit subletting and assignment without consent, and whether that consent can be withheld depends on the wording. Where a lease requires consent but says nothing about discretion, a term that consent will not be unreasonably withheld is implied under the Property Law Act 1958. The position differs for retail premises, where the Act sets out the limited grounds on which a landlord can refuse an assignment and separately allows a landlord to refuse a sublease.
Talk to us if.
- You want to bring another occupier into part or all of your premises
- You have been asked to consent to a sublease as the landlord
- You are taking a sublease and want to know how secure it is
- The head lease prohibits or restricts subletting
- You need the landlord's consent to a sublease
- You want to share space without giving up your lease
- A subtenant has stopped paying and the landlord is looking to you
- You are not sure whether to sublet or assign
A sublease keeps you in the lease and liable. If the goal is to leave the premises for good, look at assignment or surrender instead.
How we help with a sublease.
- 01
Send us the documents
The head lease and details of the proposed subtenant and the space involved.
- 02
Scope and fixed fee
We confirm whether the Retail Leases Act applies, scope the work and quote before starting.
- 03
Review consent and terms
The head lease consent requirements and the sublease terms are read against the legislation.
- 04
Draft or review the sublease
We draft or review the sublease so it mirrors the head lease and protects your position.
- 05
Obtain consent
If you instruct us, we handle the landlord's consent and settle the paperwork.
Fixed fees for subletting.
Reviewing or drafting a sublease and handling consent is quoted as a fixed fee once we have seen the head lease, with a call included. A contested consent is quoted separately before any cost moves.
FAQs
Subletting FAQs.
Still unsure? Call us on (03) 9008 7224 and speak to a lawyer, not a call centre.
What is the difference between a sublease and an assignment?
Do I need the landlord's consent to sublet?
Am I still liable if my subtenant defaults?
Can the landlord unreasonably refuse consent?
Should I sublet or assign?
Related services.
Lease assignment & transfer
Transferring a lease when a business is bought or sold, with consent handled properly.
Learn moreSurrender & early exit
Ending a lease early without being left liable for the rest of the term.
Learn moreLease negotiation
We negotiate rent, incentives, options and repair clauses with the other side.
Learn moreRetail Leases Act advice
Whether the Act applies to your premises, and what it changes for both sides.
Learn moreGet your sublease done properly.
Start online or book a consultation with a CMK Legal commercial leasing solicitor in Richmond, Melbourne.