A commercial sublease agreement is a contract in which a business tenant rents part of its space to another business. The tenant who rents out the space is the sublessor, and the business that takes it is the subtenant. Used well, a rental agreement like this helps both sides make better use of the space and can help each business financially and strategically. It also has downsides, so read the pros and cons below. Download the free PDF template and fill it in step by step.
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current law. If you notice an error or outdated information, please contact us.
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When the original or prime tenant rents out a part of a commercial property, this is called a commercial sublease. The tenant will now act as a “sublandlord” in the commercial lease template and will enforce the third-party agreement.
To distinguish between the two contracts involved, you may refer to the following definitions:
The pros and cons of a commercial sublease are listed below. Take time to read them to make sure this type of lease is right for you. Each list is split by role, so the sublessor and the subtenant can check their own side first.
PROS:
CONS:
PROS:
CONS:
Subleasing goes more smoothly when you prepare before you draft the agreement. Work through the six steps below in order, from getting a copy of the prime lease to signing the sublease. Have these items ready before you start:
Step 1: Get a copy of the prime (original) agreement.
Once you have a photocopy of the prime lease, you can attach it to the commercial sublease agreement. Then, on your own copy, you may highlight crucial provisions. This will guide you when drafting the sublease agreement.
Step 2: Ask for the landlord’s consent.
Check if the prime lease has guidelines on subleasing. Alternatively, you may ask the original landlord then let him or her sign a written consent form, which is included in the free sublease agreement below. If you fail to get permission, the landlord may contest the sublease or cancel the prime lease.
Step 3: Calculate the rent.
Based on your existing rent per square feet, calculate how much you should charge for a smaller space or unit. To calculate this, you may refer to the formula below:
Prime lease’s Price per Square Feet ($/sqft.) x total square feet (sqft.) of the smaller unit
= Monthly rent for the subleased unit
Step 4: Prepare the unit.
The unit must be in top shape so that you can get inquiries. After making repairs, you may take pictures. In a commercial sublease, it is usually better to leave the space unfurnished. Businesses usually have their own preference for the set-up, so the subtenant may want a blank canvas.
Step 5: Find a subtenant.
List the space online or in a local newspaper. Once you get inquiries, make sure to filter subtenants. It is important to consider their line of business and sales projection. As the master lease tenant, you must also ensure that subtenants’ businesses do not compete with each other.
Step 6: Finalize the sublease contract.
Using the commercial sublease agreement template below, you may now go over the provisions with your subtenant. Once everything is agreed, you may finalize the contract by signing and having it notarized.
The free Commercial Sublease Agreement is a PDF made for one sublessor and one subtenant. It includes a block for the landlord’s consent. These are the parts of the document you fill in:
| Document Name | Commercial Sublease Agreement Form |
| Other Names | Sublease Contract, Subletting Rental Agreement |
| Avg. Time to Fill Out | 8 minutes |
| # of Fillable Fields | 26 |
| Available Formats | Adobe PDF |
These steps follow the FormsPal Commercial Sublease Agreement template you can download above. It is a PDF with 26 fillable fields. Open it in a PDF reader, or fill it in online with the FormsPal PDF editor and save it when you finish. Work through the steps in order.
The screenshots under each step show the FormsPal Commercial Sublease Agreement template filled with sample entries in blue, so you can see where each answer goes. The names, addresses, dates and amounts are examples only.
Have these details ready before you start:
Step 1: Name the Sublessor on the cover
On the cover page, type the name of the current tenant on the line after BETWEEN. This person is the sublessor, also called the sublandlord or master lease tenant.
Step 2: Name the Subtenant on the cover
On the line after AND, type the name of the business or person taking the space. This is the subtenant, also called the sublessee.
Step 3: Describe the property and enter the date
Write the complete address of the property as it appears in the prime lease. This must include the sublease unit or commercial space number, floor, building number, street name, county/city, state, and zip code. Then enter the date on the Dated line.
Step 4: Enter the Effective Date and the parties
On page 2, enter the Effective Date, which is the date the agreement is signed. Then repeat the names of the sublessor and the subtenant exactly as they appear on the cover.
Step 5: Fill in Recital A
Enter the name of the property owner, who is the landlord under the prime lease. Then add the date of the prime lease and the property as it is known in that lease. You can copy all three from the original contract.
Sections 1 and 2 come next. They are standard text, so read them before you move on.
Step 6: Set the term in Section 3
Enter the Sublease Commencement Date, which is the day the subtenant may move in. It can be the same as the date of the agreement. Then tick the first box for a month-to-month term that runs until the prime lease ends. Or tick the second box and write the length of the term, for example “Six Months”.
Note: You may ask for a security deposit from the subtenant. Just in case anything happens to the commercial space or the property, a security deposit of up to 150% can cover any repair cost or unpaid rent if the subtenant leaves prematurely. By the end of the term, the sublandlord must return this to the subtenant.
Step 7: Enter the monthly rent in Section 4(a)
Write the monthly rent in dollars. A simple way to work out the amount is the prime lease’s price per square foot multiplied by the square feet of the smaller space, as shown in the formula earlier on this page.
Step 8: Set the rent due day in Section 4(b)
Enter the day of the month on which the rent is due, such as the 1st or the 7th.
Step 9: Add the contact details in Section 15
Both the master lease tenant and the subtenant must properly document any critical communication between them. Therefore, section 15 must contain their contact details. Write the address for the sublessor and for the subtenant, and add a Copy to address for each if you want one.
Sections 5 to 14 and 16 to 19 are standard text. Read all of them and check that you agree with each one before you sign. If a point is unclear, ask a lawyer.
Step 10: Sign for the Sublessor
On page 10, the sublessor signs on the By line. Then print the name and the title below it.
Step 11: Sign for the Subtenant
The subtenant signs on its By line and prints the name and the title below it.
Step 12: Complete the Consent of Landlord
Enter the date of the prime lease. The landlord then signs on the By line, adds the date and prints the landlord’s name and the signer’s name and title. This block records the landlord’s consent to the sublease.
Once every step above is filled in, print the agreement and read it through with the other side. Then follow these steps to sign it, collect the landlord’s consent and keep the paperwork together. Use the same names on the signature lines as the ones you typed on the cover page.
Once the primary tenant and the subtenant agree to all the terms, they must indicate the following details:
Note: The signatures of the primary tenant and the subtenant should also be affixed on each page of the sublease agreement.
Most original leases (or “prime leases”) require the tenants to get the permission of the landlord. Though some states do not implement this strictly, you may need to at least inform the property owner or original landlord. In this section, fill out the blanks as follows:
For the next pages of the contract, you may attach the master lease, an inspection form, or a property location map. In addition, you may want to attach some house rules for the subtenant. You may also add any relevant correspondence between the original landlord and the sublandlord like changes to the contract or new rules.
Though a sublease can be more detailed than regular lease agreements, it can benefit both the sublandlord and the sublessee. This third-party contract can give their businesses a strategic advantage not only financially, but also in terms of marketing and some business operations.
It is a written agreement between a business tenant, called the sublessor, and a second business, called the subtenant, who uses part of the rented space. It sets out the rent, the length of the term and how the two sides contact each other.
The sublessor is the tenant who rents out part of the space. The subtenant is the business that rents that part from the sublessor. You may also see the sublessor called the sublandlord and the subtenant called the sublessee.
The free PDF has 26 fillable fields. You enter these details:
The last page also has a Consent of Landlord under Prime Lease block.
Yes. The PDF has fillable fields, so you can click each one and type your answers. Save the file when you finish and print it for the signatures.
Look in your prime lease for the landlord’s name, the date of the lease and the description of the property. Copy them into Recital A so the two documents match.
Each side keeps a signed copy. Store yours with the prime lease and any attachments so you can find them together later.
General information, not legal or tax advice.
