It is not uncommon for office users to sublet unused individual offices. It has become so common that major landlords now have addendums addressing this issue. It should not be a surprise to your landlord if you make this request during lease negotiations.
On the surface, subletting single or multiple spaces might appear to be a simple task. However, there are numerous pitfalls that one might run into if your landlord does not include language in your lease. To be proactive, clarify your rights under the sublease clause and know the best practices for marketing shared offices.
Traditionally, sublease clauses are focused on subletting a specific amount of square footage while you remain in a portion of the suite or perhaps subletting the entire space to an entity should you vacate the suite completely.
In both cases the landlord may require full financial information of the sublessee and require the sublessee name the landlord as an additional insured on their general liability policy. In addition, they may require a fee be paid to review the documents.
Landlords treat single office subletting differently. Some are stricter than others.
In drafting a lease, ask for language that allows you to sublet a specific number of offices under certain conditions and with reasonable requirements. These types of subleases are never based on a per square foot charge primarily because you will likely be providing additional services such as use of a conference room, sharing a receptionist, possibly allowing the sublease to tie into the phone or internet connection and more. Therefore, your charge to lease some of your space should be all inclusive. It is essential to spell the details out clearly since some landlords may take a position that any amount or profits you receive beyond the amount you are paying, based solely on a per square foot rent,must be split 50/50 or given totally to the landlord.
Most landlords will accept a simple notice that you will be subletting a specific number of offices and/or work areas rather than requiring a costly document review. Some may not require the sublessee to be named as an additional insured as long as your insurance is in place. Either way should be certain the sublessee is insured and at a minimum, names you as an additional insured.
To avoid issues down the road, we recommend you address the terms and conditions under which you can sublet a set number of offices or workstations without triggering many of the onerous stipulations in the standard sublease clause. As noted earlier, this type of sublease is so commonplace; one local landlord actually has a full addendum
addressing these specific issues.
The biggest challenge is marketing the space. The best practice is to network the heck out of it. Really. Let all your friends know you have space available. Be cautious about placing the listing on Craig’s List because you never know who you’re going to attract. If you have a broker list the available offices 1) they will expect a fee which will be hard to calculate, and 2) rarely do other brokers look on the proprietary databases for single office listings. While there are some services that, for a fee, will list your single office availability. The key remains that you may be giving the “Keys to your Kingdom” to a stranger.
Be patient and be sure you’re getting the right roommate.