Commercial Sublease Exposure: You're Still on the Hook

Your Actual Exposure: $145,000

A $3,000/mo general lease doesn't create $3,000/mo in liability. It creates $145,000 in total exposure across rent, personal guaranty, restoration, and every other clause your landlord drafted to protect themselves — not you.

Where $145,000 Comes From

What Most People Miss

The double liability. As a sublandlord, you're liable to the master landlord for all lease obligations AND you have ongoing obligations to your subtenant. If the master landlord and subtenant both have claims, you're in the middle.

Key Risks in This Scenario

• If your subtenant stops paying, you must continue paying the master lease
• Subtenant improvements create additional restoration liability on top of your own
• Landlord approval process can take 30-60 days — you're paying rent during the wait

How to Reduce Your Exposure

• Require your subtenant to provide a security deposit equal to 3 months sublease rent
• Mirror all master lease obligations in the sublease agreement

Frequently Asked Questions

Do I need the landlord's permission to sublease?

Almost certainly yes. Most commercial leases require landlord written consent for any sublease. Subletting without consent is a lease default. Always check the sublease provision before proceeding.

What happens if my subtenant damages the space?

You're responsible to the master landlord for all damage, regardless of who caused it. Your only recourse is against your subtenant — which means litigation if they don't pay voluntarily.

Can I sublease my entire space and move out?

Yes, if the lease permits full sublease. You remain liable for all master lease obligations, but the subtenant's rent covers your cost. Verify the sublease rate covers your full lease obligation including CAM.

What financial standards does a landlord use to approve a subtenant?

Landlords typically require the same financial standards as the original tenant: credit check, business financials, personal financial statement, and sometimes a personal guaranty from the subtenant.

Does a sublease affect my original personal guaranty?

No. Your personal guaranty remains in full force. If your subtenant defaults, the landlord comes after you — and your personal guaranty is still on the line.