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Can a tenant sublet a commercial property in California?

On Behalf of | Aug 25, 2023 | Commercial Real Estate |

It’s not uncommon for a business owner to want to sublet a rented property. After all, subletting a rental unit comes with a number of benefits such as maximization of the usable space. Done right, a sublease can be a win-win arrangement for the original tenant and the sublessee. But should you let the tenant sublease their rented property?

As a landlord, here is what you need to know about subletting a commercial property in California.

It is not against the law

Subletting a rented property, commercial or residential, is not illegal in California, as far as the law is concerned. However, the tenant must follow the lease agreement as well as state and municipal regulations while doing so. If a lease agreement expressly prohibits subletting, then a tenant who does so may be deemed to have violated the contract. As such, you may take appropriate action against them. 

And if you allow the tenant to sublet a rented property, you will need to set the rules for doing so. This may include the power to veto whom your tenant may sublet the property to as well as the kind of business the sublessee can operate on the property. 

So, when can you reject a tenant’s request to sublease?

There are a number of valid reasons why you may refuse a tenant’s quest to sublet a rented property. For instance, if the prospective subtenant intends to operate a business that is not well-suited for the property, you may cite this as the reason for the denial. The same applies if they intend to run an illegal business on the property. Late rent payments by the original tenant may also justify a refusal. 

As a commercial property landlord, you have a duty to protect your investment. Understanding how California landlord-tenant laws work can help you safeguard your rights and interests when a tenant is planning to sublease a rented property.