Tenant Leasing Illustrated – Oct 2017 – Massaging Your Sublease

Massaging Your Sublease

I recently read of people relaxing prone on a massage table as the masseuse gets ready to work on their tired muscles by starting up an industrial orbital sander.

What? Sounds like a landlord’s notion of giving an invigorating massage to a slow-paying tenant.

Apparently, there is a trend as the cost of massage tools have skyrocketed, for not just sanders, but also jigsaws, car buffers and other relatively inexpensive power tools to be modified by replacing the sharper edges with rubber, lacrosse balls or even lambs wool to warm up or treat aches and pains.

This approach started with weightlifters and has spread to college coaches, chiropractors and massage specialists.

As one cross-fit coach indicated, a car buffer can be especially effective on the lower body, but if you accidently hit certain body parts “it doesn’t feel great”.

Ouch! Very insightful.

I am all for thinking out of the box, and maybe taking a Home Depot industrial saw to some of my lease clauses might make them almost intelligible, but I think I will stay snug in that box if any budding Rosie the Riverter offers a massage by breaking out a pneumatic-powered buffer.

Not to be outdone, commercial leasing has its own version of something that does not quite fit and requires a bit of faith to use.

That is, a sublease.

We have talked before about the somewhat twisted logic required to make a sublease work.

Subleases attempt to fit a new subtenancy within the confines of an existing overlease.

The sublease is subject to all of the terms and conditions of the overlease so, rather than create a whole new document that mirrors the existing overlease, most subleases provide that all of terms and conditions of the overlease are incorporated into the sublease, except that “Landlord” shall mean “Sublandlord”, “Tenant” shall mean “Subtenant”, “Premises” shall mean “Subleased Premises” and so on.

This works fine for certain provisions such as insurance, the methodology for making payments, defaults and enforcement, to name a few.

But other provisions do not lend themselves to this approach, such as the specific amount of rent to be paid, the security deposit and any other provisions that relate to the actual ownership of the building by the landlord.

So, the sublease needs to exclude a slew of specific overlease provisions that are inapplicable and address these items directly.

With all of this going on, the potential for something to fall between the cracks is not insignificant and a certain amount of faith is required that the whole thing will pull together coherently.

Tenants and subtenants often disagree about whether or not to incorporate various provisions from the overlease. One topic that often leads to disagreement involves the sections obligating the overlandlord (i.e., now the sublandlord), to provide certain important services, such as HVAC, electricity, cleaning, etc. and to maintain the premises and building.

Overlandlords provide these services, not sublandlords, but any subtenancy will be dependent on the ability to obtain such services.

Subtenants want these provisions incorporated into the sublease since these provisions are such an essential part of their subtenancy.

Sublandlords prefer to exclude these provisions since the overlandlord (not the sublandlord) is the party providing these services.

Whether you are a sublandlord or subtenant, you can power through your sublease service exclusions and inclusions with the following six suggestions:

Drill down to services. Whether representing a sublandlord or subtenant, in most instances we suggest incorporating the service provisions of the overlease into the sublease. Notwithstanding that these services are provided exclusively by the overlandlord, not the sublandlord, the ability to receive essential services under the sublease is too important to the subtenancy to exclude and the sublandlord can be otherwise protected as provided herein.

Massage overlandlord obligations. In all instances, your sublease should indicate that the sublandlord will have no obligation to provide any such services, make any repairs or comply with any laws and that the subtenant will need to look solely to the overlandlord. This will be particularly important when the services provisions are incorporated into the sublease.

Sand down to generic language. The sublease should also use generic language to exclude from the sublease all other terms of the overlease which are inapplicable, or inconsistent with, or modified by, the terms of the sublease.

If services are excluded, buff up intent. Some sublandlords will vehemently insist that these service provisions must be excluded. Although subtenants should resist, acquiescing to such exclusion may sometimes be necessary in order to get the deal done and is acceptable provided the sublease clearly indicates that, notwithstanding such exclusion, it is the intent of the parties that the subtenant shall have the right to receive the benefit of such service provisions under the overlease.

Saw through specific services outside of the overlease. It is not unusual for a sublandlord to be entitled to particular services or rights, such as use of a generator, specified roof rights or the ability to access certain conduit, through a separate services agreement with the overlandlord or a third party (perhaps even another tenant). You as subtenant must be careful to determine if such rights are provided outside the terms of the overlease or limited to the individual sublandlord and, in such event, you will need to address your ability to access these rights through a separate document (such as the overlandlord’s consent document).

Polish up direct enforcement. Generally, a sublandlord will not be responsible to take any action to enforce the obligations of the overlandlord other than to cooperate with the subtenant and make formal requests to the overlandlord to comply with the terms of the lease. As with all sublease rights, if the sublandlord does not so request, or if after the sublandlord requests the overlandlord still does not comply, the subtenant should have the affirmative right to take action in its own name (including litigation), and all of the rights of the sublandlord under the overlease should be assigned to the subtenant. If any such action against the overlandlord in the subtenant’s name is barred by lack of privity, non-assignability or otherwise, the subtenant should be able to take such action in the sublandlord’s name (with an indemnification of the sublandlord for any claims arising by reason of such actions).

Subleases are difficult enough, but however you choose to relax, you can avoid the stress of addressing the service provisions of your sublease without firing up your Black and Decker Random Orbit Waxer-Polisher by following our suggestions above.