Subleasing & Assignment in New York City

Subleasing and assignment clauses are part of the many complex issues that will be dealt with under your commercial lease. While negotiating these lease terms will be the primary responsibility of your attorney, as an experienced commercial real estate tenant representative broker, Metro Manhattan Office Space will help you understand the basic requirements and protections you should be aware of and will work in cooperation with your attorney during lease term negotiations.


In a sublease, the existing tenant enters into a contract with a third party for the occupancy of all or a portion of its rental space. The new tenant takes on all of the rights and obligations of the original tenant pursuant to the sublease agreement but the original tenant remains liable for all obligations to the landlord under the original lease.

Most commercial leases for New York City office space (as well as for loft, medical, retail, and showroom space) permit tenants to sublease their space. However, sublease clauses vary from landlord to landlord and generally there are restrictions on the right to sublease. Tenants must always obtain the landlord’s consent to sublease space. Tenant’s attorney should negotiate that such consent shall not be unreasonably withheld under the lease agreement. Frequently the landlord has the right to share a portion of the tenant’s profit from subleasing. If the sublease clause contains the “right of recapture” the landlord has a right at their discretion to recapture control of the space. Landlords generally prefer that the entire rental space be sublet as opposed to merely a portion.


Assignment of a commercial lease differs from a sublet. When a lease is assigned, the original tenant transfers all of its rights and interests under the lease to the new tenant for the remainder of the lease term. In some cases the original tenant is completely released from any liability to the landlord under the original lease. The new tenant assumes that responsibility for the remaining lease term and is in contract directly with the landlord. Lease assignment presents more risk for the landlord than subletting particularly if the original tenant is no longer liable under the lease. The new commercial tenant must be able to show that it is financially capable of assuming all lease obligations, is credit worthy, is reputable, and is a good fit for the building, among other things.

The Importance Of Subleasing And Assignment Clauses In Your Commercial Lease

There are any number of reasons why you may one day need to sublease or assign your lease, particularly given the economic climate, so it is important that you have a certain degree of flexibility should your business conditions require it. Subleasing and assignment clauses can be quite complex and it will be up to your attorney to negotiate the details, such as whether or not the new tenant assumes responsibility for the security deposit. Things to look out for include whether the landlord is restricted from unreasonably withholding consent and whether a corporate restructuring, death, divorce, gift, or sale of the company will constitute an assignment of lease.

In general, it is important that you enter into a fair lease with adequate protection for both landlord and tenant. Signing a landlord lease form that is not properly negotiated can have detrimental impacts on your business and financial liability. You should make sure you have the necessary degree of flexibility under your lease with respect to assignments and sublets should the needs of your business change during your lease term.

As a broker who only works for and on behalf of commercial tenants we will give you guidance with respect to your sublease and assignment rights and work in cooperation with your attorney to help you obtain favorable lease terms. We always have your tenant rights in mind.

With Metro Manhattan Office Space brokers finding your ideal New York commercial real estate is only the first step, we then help ensure that all of your interests are being protected. We know that avoiding excessive costs can mean the difference between success and failure in your business.

Contact Alan Rosinsky, Principal Broker of Metro Manhattan Office Space, Inc., for a FREE consultation today: