In real estate, sublease, otherwise known as sublet, is a term for leasing out property which has already been leased. In such an arrangement, the original lessee becomes the sublessor, and a third party is assigned the role of a tenant.
It might appear to be an easy, profitable arrangement for a lessee who does not have sufficient resources to maintain the leased property. It is also a practical arrangement for businesses which have already entered into lease agreements, but have been severely affected by the economic crisis and forced to fold.
However, subleasing brings with it a set of restrictions. For one, subleasing usually applies only when the original lessee intends to return to the vacated unit after a certain period of time. If this is not the case, then the sublessor will take on the role of the new tenant, and the original lessee no longer needs to renew his contract with the owner of the property.
While this might seem disadvantageous to a sublessor who is able to profit from the sublease, it is actually better to assign property to the tenant. This is because in a sublease, the sublessor continues to claim liability for any damages that the property might sustain.
The third party or tenant must also be aware that when the contract of the sublessor and owner expires, his own contract is invalidated, as well. It is thus necessary that the proper documentation be set in place in order to avoid complications.
A sublease can be applied not only to real estate property, but to vehicles that have been rented out by lessees, as well.