How to review a commercial sublease

A sublease lets a tenant (the sublandlord) rent some or all of its premises to a subtenant for part of the remaining term. The sublease sits underneath the master lease, which still governs the relationship between the landlord and the original tenant. Most sublease problems come from a mismatch between the two documents, so this checklist starts with the master lease and then covers the clauses to check in the sublease itself, with a Word review workflow.

Last checked: 17 October 2026. The law changes; check the current position before relying on this page.

Start with the master lease

• Read the transfer clause. Most commercial leases restrict subletting without the landlord's consent. Check the consent standard, the information the landlord can ask for, response times and any fee for reviewing the request. Where the lease is silent on the standard, state law may supply one. In California, for example, Civil Code section 1995.260 says that if a lease requires the landlord's consent to a transfer but gives no standard, consent may not be unreasonably withheld.
• Recapture rights. Many leases let the landlord take back the space instead of consenting. A request to sublet can trigger that right, so check before you ask.
• Profit sharing. Leases often require the tenant to pay the landlord a share of any rent above the master lease rent, after deducting the costs of subletting.
• Remaining term. The sublease must end before the master lease does. A sublease for the whole remaining term may be treated as an assignment in some states.

Sublease clause checklist

• Parties and premises. Identify the master lease by date and parties, and attach the floor plan of the subleased space, including any shared areas.
• Incorporation of the master lease. Most subleases incorporate the master lease terms by reference, with the sublandlord stepping into the landlord's role. List the exceptions clearly: rent, term, the sublandlord's obligations to perform the landlord's services, and any clauses that make no sense between the sublandlord and subtenant.
• Subject and subordinate. The sublease should say it is subject and subordinate to the master lease, and that it ends if the master lease ends. A subtenant does not usually have a direct contract with the landlord, so a subtenant with a lot at stake may want a recognition (non-disturbance) agreement from the landlord.
• Rent and operating costs. Base rent, the subtenant's share of operating expenses and taxes, and how pass-through charges are calculated and audited.
• Services and repairs. The sublandlord usually cannot promise services it does not control. Expect a clause where the sublandlord agrees only to use reasonable efforts to make the landlord perform.
• Use and alterations. The permitted use must fit within the master lease. Any alteration usually needs consent from both the sublandlord and the landlord.
• Insurance and indemnity. The subtenant should carry the insurance the master lease requires and name both the landlord and the sublandlord as additional insureds. See our indemnification clause guide.
• Default. A subtenant default can put the sublandlord in default under the master lease. Check cure periods: the sublease periods should be shorter than the master lease periods.
• Security deposit and guaranty. Amount, form (cash or letter of credit) and when it is returned.
• Surrender and restoration. Who removes the subtenant's alterations and cabling at the end, and holdover rent.
• Landlord consent condition. Make the sublease conditional on the landlord's written consent, with a right to terminate if consent is not given by a set date.

A sublease review workflow in Word

LexDraft is a Word add-in from Microsoft AppSource. It opens as a side panel in Word 365 (Windows and Mac), Word 2021 and Word on the web, so the agreement never leaves the tool you already draft in.

1. Open the agreement in Word and open LexDraft in the side panel.
2. Pick the governing law. Select the state named in the governing law clause so LexDraft looks for state-specific red flags.
3. Run the review. LexDraft has four built-in playbooks (NDA, SaaS MSA, DPA and services agreement) and no dedicated sublease playbook, so this runs as a general review against the governing law you chose. Use the checklist on this page to direct your own read.
4. Triage by severity. Findings are graded Critical, High, Medium or Low, and LexDraft flags standard terms that are missing.
5. Run the quick checks. The defined-term and cross-reference checks are rule-based and run without AI.
6. Accept or reject each redline. Accepted changes land as native Word tracked changes.
7. Verify and sign off. You check every output before it goes to the client or the other side.

Common mistakes

• A sublease term that runs past the master lease expiry date.
• Incorporating the whole master lease without carving out the rent and term provisions.
• Calling the same space "Premises", "Subleased Premises" and "Sublease Space". The defined-term check catches this.

What LexDraft does not do

LexDraft does not give legal advice or check the master lease against the sublease automatically unless you open and review it. Nothing changes in your document until you accept a redline.

This guide is general information, not legal advice. LexDraft does not give legal advice; qualified counsel must review every draft. Spotted something out of date? Email support@lexdraft.ai and we will fix it.