What should I check in the head lease before subletting commercial premises?

You should check the head lease for restrictions on subletting, permitted use, rent, term length, repair obligations, alienation clauses and consent procedures.

How long can a commercial sublease last?

Usually, the sublease term must be shorter than the tenant’s remaining term under the head lease and must comply with any restrictions in the head lease.

Can a subtenant pay service charges and insurance costs?

Often, yes. The sublease may require the subtenant to pay rent, service charges, insurance contributions, business rates or other property-related costs.

Why is the permitted use important in a commercial sublease?

The agreement should clearly state the permitted business use and ensure it matches the head lease, planning rules and any landlord consent conditions.

Does the Landlord and Tenant Act 1954 apply to commercial subleases?

Commercial subleases may be inside or outside the Landlord and Tenant Act 1954, depending on the arrangement and whether statutory exclusion procedures are followed.

Who is responsible for repairs under a commercial sublease?

The tenant under the head lease usually remains liable to the superior landlord, while the subtenant is liable to the tenant under the sublease.

Can I use this checklist with an AI-generated Commercial Sublease Agreement?

Yes. The checklist helps collect the details needed to generate a tailored Commercial Sublease Agreement on the main category page.

Is a commercial sublease checklist a substitute for legal advice?

A checklist is useful preparation, but it is not a substitute for legal advice, especially where landlord consent, lease restrictions or complex property terms apply.

When am I ready to create a Commercial Sublease Agreement?

You can prepare one once you have the head lease, landlord consent position, agreed commercial terms and complete details for the property, tenant and subtenant.

EN-GB>Commercial>Commercial Underlease Agreement>UK Commercial Sublease Preparation Checklist

Commercial Sublease Preparation Checklist In The United Kingdom

Created: 8 Jun 2026

This checklist helps UK landlords and tenants prepare key details before drafting a commercial sublease. It explains what to review, gather, and confirm when using an AI-Generated British Commercial Underlease Agreement.

Checklist item	Responsible party	Priority level	Reason needed	Examples and notes
Property details
Exact premises to be sublet	Sublandlord	Essential before drafting	Defines what the subtenant will occupy and prevents mismatch with the headlease.	Suite, floor, unit, yard, store, parking spaces or part only of larger premises.
Land Registry title number and title register	Sublandlord	Essential before drafting	Confirms the superior title, property description and registered restrictions.	Official copy register and title plan for the freehold or superior leasehold title.
Plan of the sublet premises	Professional adviser	Essential before drafting	Identifies boundaries, shared areas and any excluded parts.	Coloured plan, scale, north point and clear edging for part-building subleases.
Rights to be granted to the subtenant	Sublandlord	Essential before drafting	Ensures the subtenant receives only rights the sublandlord can pass on.	Access, loading, toilets, plant rooms, bins, signage, car parking and services.
Rights reserved to the sublandlord and superior landlord	Sublandlord	Recommended	Protects access for repairs, inspection, services and compliance with the headlease.	Entry on notice, service media rights, emergency access and scaffolding rights.
Fixtures, fittings and contents schedule	Sublandlord	Optional depending on transaction	Clarifies what is included, excluded or must be removed at expiry.	Desks, racking, partitions, kitchen equipment, alarms, cabling and trade fixtures.
Shared facilities and common parts arrangements	Multiple parties	Recommended	Avoids disputes over access, cleaning, security and contribution to shared costs.	Reception, lifts, toilets, kitchens, refuse areas, loading bays and meeting rooms.
Current condition evidence	Multiple parties	Recommended	Supports repair wording and limits disagreement at the end of the term.	Photographs, survey report, snagging list or schedule of condition.
Schedule of condition	Professional adviser	Optional depending on transaction	Can qualify the subtenant's repairing obligation to existing condition.	Often attached to short-term or secondary space underleases.
Current occupation and vacant possession position	Sublandlord	Essential before signing	Confirms the subtenant can take occupation on the agreed start date.	Existing licensees, storage, works, staff occupation or third-party rights.
Headlease review
Complete copy of the headlease	Sublandlord	Essential before drafting	The underlease must not grant more than the headlease permits.	Include all schedules, plans, licences, side letters and supplemental deeds.
Headlease term and expiry date	Professional adviser	Essential before drafting	A sublease must end before the headlease and align with any break dates.	Check contractual expiry, continuation, break clauses and any reversionary terms.
Headlease underletting and alienation clause	Professional adviser	Essential before drafting	Determines whether underletting is permitted and on what conditions.	Conditions may require whole premises, open market rent, direct covenants or excluded tenancy status.
Permitted use under the headlease	Professional adviser	Essential before drafting	The sublease use must fit within the headlease and planning position.	Office, retail, warehouse, restaurant, clinic, light industrial or mixed use.
Headlease rent review and underlease rent requirements	Professional adviser	Recommended	Some leases require underlease rent reviews to mirror or exceed headlease terms.	Open market rent, upward-only review, index-linked review or review date alignment.
Headlease repair and decoration obligations	Professional adviser	Essential before drafting	The subtenant's obligations should help the sublandlord comply with the headlease.	Internal repair, full repairing obligation, decoration cycles and yielding up duties.
Headlease alterations restrictions	Professional adviser	Recommended	Controls whether the subtenant can fit out, install plant or change layout.	Structural alterations, non-structural alterations, signage, cabling and reinstatement.
Headlease insurance provisions	Professional adviser	Essential before drafting	Shows who insures the building and what insurance rent the subtenant must pay.	Insured risks, rent suspension, uninsured risks, policy excess and premium recharge.
Headlease service charge provisions	Professional adviser	Essential before drafting	Allows accurate recovery of service charge from the subtenant.	Budget, accounts, apportionment percentage, caps, reserve funds and balancing charges.
Headlease break clauses and conditions	Professional adviser	Essential before drafting	A superior break could end the sublease or require matching rights.	Notice period, vacant possession, rent payment and reinstatement conditions.
Headlease forfeiture and breach provisions	Professional adviser	Recommended	Shows risks if headlease obligations are breached by the subtenant or sublandlord.	Non-payment, insolvency, unauthorised use, alterations or unlawful occupation.
Existing licences, variations and side letters	Sublandlord	Essential before drafting	Supplemental documents may change use, rent, repair, alterations or alienation rights.	Licence for alterations, deed of variation, rent concession letter or consent to assign.
Landlord consent
Requirement for superior landlord consent	Professional adviser	Essential before drafting	Confirms whether a licence to underlet is needed before completion.	Check if consent must be prior written consent or formal deed.
Written application for consent to underlet	Sublandlord	Essential before signing	Starts the formal consent process and supports the statutory timetable.	Include full details of proposed subtenant, terms, use and draft documents.
Landlord and Tenant Act 1988 consent duties	Superior landlord	Recommended	Relevant where consent is not to be unreasonably withheld and a written application is made.	Landlord must usually give consent or refusal with reasons within a reasonable time.
Draft licence to underlet	Professional adviser	Essential before signing	Documents the superior landlord's consent and any conditions.	May include direct covenants, approved form underlease and costs undertakings.
Managing agent approval or requirements	Managing agent	Recommended	Agents often administer building rules, access, service charge and operational consents.	Induction, keys, access cards, contractor rules and occupier handbook.
Undertaking for superior landlord's legal and surveyor costs	Sublandlord	Essential before signing	Often required before the superior landlord processes consent.	Cost undertaking may be required from the sublandlord's solicitor.
Required direct covenants from subtenant	Superior landlord	Essential before signing	Some headleases require the subtenant to covenant directly with the superior landlord.	Observe headlease covenants, not vary the underlease, provide information or pay costs.
Superior landlord approval of underlease rent	Superior landlord	Optional depending on transaction	Some headleases restrict underletting at a fine, premium or below market rent.	Open market rent evidence, valuation note or marketing evidence may be requested.
Approved form of underlease required by headlease	Professional adviser	Essential before signing	Ensures the draft sublease satisfies any headlease conditions.	May need to incorporate headlease covenants by reference or match specific clauses.
Financial terms
Sublease start date and expiry date	Multiple parties	Essential before drafting	Sets the contractual term and must expire before the headlease.	Include any rent-free period, early access period and completion date assumptions.
Annual rent and payment dates	Multiple parties	Essential before drafting	Defines the main payment obligation under the sublease.	Monthly or quarterly in advance include first payment apportionment.
VAT position and option to tax	Sublandlord	Essential before drafting	Determines whether VAT is payable on rent, service charge and other sums.	Check option to tax notification, VAT registration and invoice wording.
Rent deposit amount and deed terms	Multiple parties	Essential before signing	Provides security for rent, service charge, repair and other breaches.	Three to six months' rent, VAT, interest, top-up and release conditions.
Service charge budget and apportionment	Managing agent	Essential before drafting	Allows the sublease to state what service costs are recoverable.	Fixed percentage, floor area split, direct recharge, caps or inclusive rent.
Insurance rent and premium recharge	Sublandlord	Recommended	Clarifies the subtenant's contribution to building insurance costs.	Annual premium, excess, terrorism cover and rent loss insurance share.
Rent-free period, concession or incentive	Multiple parties	Optional depending on transaction	Ensures incentives are documented and do not breach headlease conditions.	Fit-out allowance, stepped rent, personal concession or side letter.
Sublease rent review mechanism	Multiple parties	Optional depending on transaction	Needed for longer terms or where the headlease requires review provisions.	Open market, RPI, CPI, fixed uplift or no review for short terms.
Business rates responsibility	Subtenant	Recommended	Clarifies who pays non-domestic rates and handles rating assessment changes.	Check VOA assessment, small business relief and split assessment for part premises.
Utilities, metering and recharge method	Multiple parties	Recommended	Avoids uncertainty over electricity, gas, water, data and shared supply costs.	Separate meters, sub-meters, fair proportion, broadband and standing charges.
Interest on late payments	Professional adviser	Recommended	Encourages prompt payment and defines consequences of arrears.	Often a margin above base rate, with default interest after due date.
Tenant identity
Subtenant legal name and status	Subtenant	Essential before drafting	Ensures the correct party is named and bound by the sublease.	Company number, LLP number, partnership names or sole trader details.
Companies House status check	Professional adviser	Recommended	Confirms incorporation, registered office, directors and active status.	Check if dissolved, in liquidation, overdue filings or recent name changes.
Authority of subtenant signatories	Subtenant	Essential before signing	Confirms the subtenant can validly execute the sublease or related deed.	Board minutes, director signature, company secretary or authorised signatory evidence.
Execution and completion
Companies Act 2006 company execution requirements	Professional adviser	Essential before signing	Sets statutory methods for a company to execute a document.	Common methods include two authorised signatories or one director with a witness.
Tenant identity
Guarantor identity and covenant strength	Subtenant	Optional depending on transaction	Provides additional security if the subtenant has limited financial covenant strength.	Parent company guarantee, director guarantee or bank guarantee.
Trade, bank or landlord references	Subtenant	Recommended	Helps assess payment risk and suitability for landlord consent.	Previous landlord reference, accountant letter, bank reference or credit report.
Anti-money laundering identity checks	Professional adviser	Essential before signing	Professional advisers may need to verify parties before acting or completing.	Company ownership, PSC details, individual ID, sanctions and source of funds checks.
Money Laundering Regulations 2017 compliance	Professional adviser	Recommended	Relevant to regulated professionals carrying out customer due diligence.	Applies to many solicitors and property professionals in regulated transactions.
Actual occupiers and group company use	Subtenant	Recommended	Prevents unauthorised sharing, group occupation or further underletting.	Employees, concession operators, group companies, contractors or franchisees.
Insolvency and credit risk checks	Professional adviser	Recommended	Helps decide whether a deposit, guarantor or advance rent is needed.	Company credit report, bankruptcy register, winding-up search or CCJ search.
Insurance and compliance
Energy Performance Certificate	Sublandlord	Essential before signing	An EPC is commonly required when commercial property is let.	Check current rating, expiry date and whether the premises are separately assessed.
Minimum Energy Efficiency Standards position	Sublandlord	Essential before signing	Poor EPC ratings can restrict letting unless an exemption applies.	Check EPC rating, exemption register and improvement works before grant.
Energy Efficiency Regulations 2015 MEES rules	Professional adviser	Recommended	Provides the statutory framework for minimum energy efficiency in rented property.	Relevant to non-domestic private rented property in England and Wales.
Asbestos register or management plan	Managing agent	Recommended	Helps allocate responsibility for asbestos risks and contractor controls.	Required duty to manage can apply to non-domestic premises.
Control of Asbestos Regulations 2012 duty to manage	Multiple parties	Recommended	Relevant to asbestos management responsibilities in non-domestic premises.	Responsibility can depend on control of maintenance and repair obligations.
Fire risk assessment and fire safety arrangements	Multiple parties	Essential before signing	Clarifies operational fire safety duties before the subtenant occupies.	Fire exits, alarms, emergency lighting, evacuation plan and responsible person.
Regulatory Reform Fire Safety Order 2005 responsibilities	Multiple parties	Recommended	Sets fire safety duties for many non-domestic premises.	More than one responsible person may have duties in shared buildings.
Health and safety responsibility allocation	Multiple parties	Recommended	Ensures occupation, maintenance and shared areas are managed safely.	Risk assessments, contractors, lifting equipment, plant rooms and accident reporting.
Planning use and lawful use evidence	Subtenant	Essential before signing	The proposed use must be lawful and consistent with the headlease.	Use Class E, B2, B8, sui generis use or planning permission condition.
Operational licences or permissions for the subtenant's business	Subtenant	Optional depending on transaction	Some uses need licences before trading from the premises.	Alcohol, late-night refreshment, childcare, clinics, waste, gambling or entertainment.
Building insurance policy evidence	Sublandlord	Recommended	Confirms insured risks, excesses and any subtenant obligations.	Summary of cover, terrorism cover, rent cover and insurer conditions.
Subtenant public liability and contents insurance	Subtenant	Recommended	Protects against occupation-related claims and losses not covered by building insurance.	Public liability, employer's liability, plate glass, stock and business interruption.
Telecoms, data cabling and wayleave requirements	Multiple parties	Optional depending on transaction	Prevents unauthorised installations and delays to business operation.	Fibre provider consent, riser access, cabling routes and reinstatement.
Environmental and contamination information	Sublandlord	Optional depending on transaction	Important for industrial, storage, workshop or waste-related uses.	Fuel tanks, chemicals, waste storage, trade effluent and historic contamination.
Accessibility and reasonable adjustment issues	Multiple parties	Optional depending on transaction	Fit-out and occupation may need to account for Equality Act duties.	Step-free access, signage, accessible toilets, counters and common parts.
Equality Act 2010 access-related duties	Multiple parties	Optional depending on transaction	May affect premises open to employees, customers or service users.	Relevant to service providers, employers and those controlling premises.
Execution and completion
Keys, access cards and security arrangements	Managing agent	Recommended	Ensures practical occupation can begin on completion.	Alarm codes, fobs, parking permits, visitor rules and out-of-hours access.
Decision on security of tenure exclusion	Multiple parties	Essential before signing	Determines whether the subtenant may have statutory renewal rights.	Warning notice, tenant declaration and correct timing before completion.
Landlord and Tenant Act 1954 contracting-out procedure	Professional adviser	Essential before signing	Relevant if the parties intend to exclude business tenancy renewal rights.	Use statutory warning notice and simple or statutory declaration as required.
1954 Act warning notice and tenant declaration evidence	Sublandlord	Essential before signing	Proves the contracting-out steps were completed before the sublease was granted.	Keep copies of notice, declaration and authority for any agent service.
Agreed draft sublease ready for execution	Professional adviser	Essential before signing	Ensures all commercial, headlease and consent requirements are reflected.	Attach plan, rent deposit deed, schedule of condition and licence conditions if needed.
Execution method: deed or simple contract	Professional adviser	Essential before signing	Determines formalities for valid grant of the sublease.	Short leases may have different formalities deeds require proper execution and delivery.
Law of Property Act 1925 deed requirement for legal leases	Professional adviser	Recommended	Legal estates in land are generally created or conveyed by deed subject to exceptions.	Check whether the short lease exception applies before using a non-deed lease.
Completion statement and monies due	Professional adviser	Essential before signing	Confirms the amounts payable on completion and avoids payment disputes.	Initial rent, VAT, deposit, service charge, insurance rent and legal costs.
Stamp Duty Land Tax filing and payment position	Subtenant	Essential before signing	Some commercial leases require SDLT returns and payment after completion.	Calculate on premium and net present value of rent where applicable.
Finance Act 2003 SDLT lease rules	Professional adviser	Recommended	Provides the statutory basis for SDLT on land transactions and leases.	Relevant for England and Northern Ireland different devolved taxes apply elsewhere.
Land Registry registration requirement	Subtenant	Optional depending on transaction	Some leases must be registered or noted to protect the subtenant's interest.	Leases over seven years are commonly registrable at HM Land Registry.
Land Registration Act 2002 lease registration rules	Professional adviser	Recommended	Identifies when leasehold estates are registrable dispositions.	Check term length, reversionary start date and any easements granted.
Post-completion notice to superior landlord	Sublandlord	Optional depending on transaction	Some headleases require notice and a certified copy after underletting.	Notice of underlease, registration fee, copy underlease and subtenant details.
Notice addresses and service details	Multiple parties	Essential before drafting	Ensures rent demands, breach notices and formal notices can be validly served.	Registered office, trading address, email for notices if agreed, solicitor details.
Rent deposit deed executed and funds received	Multiple parties	Essential before signing	Ensures agreed security is in place before occupation begins.	Hold in separate account confirm interest, withdrawals and top-ups.
Licence for subtenant fit-out works	Multiple parties	Optional depending on transaction	Controls works before occupation and preserves headlease compliance.	Drawings, method statements, reinstatement, CDM duties and superior consent.
Insurance and compliance
CDM duties for fit-out or alteration works	Multiple parties	Optional depending on transaction	Relevant where construction, fit-out or refurbishment works are planned.	Client, principal designer, principal contractor and health and safety file duties.
Construction Design and Management Regulations 2015	Multiple parties	Optional depending on transaction	Regulates health and safety management for construction projects.	Can apply to commercial tenant fit-out works, not only major construction.
Execution and completion
Completion deliverables list	Professional adviser	Recommended	Keeps completion organised and confirms all required documents are exchanged.	Signed underlease, licence to underlet, deposit deed, keys, EPC and completion statement.
Signed counterparts or electronic signature evidence	Multiple parties	Essential before signing	Shows each party has executed the agreed form of document.	Witness details, signing authority, dating protocol and delivery confirmation.
Landlord consent
Mortgagee or lender consent if required	Sublandlord	Optional depending on transaction	A mortgage or charge may restrict leasing or require lender approval.	Check registered charges, facility documents and consent conditions.
Execution and completion
Jurisdiction-specific property tax and registration checks	Professional adviser	Recommended	Commercial lease taxes and registration rules differ across the UK.	SDLT in England and Northern Ireland LBTT in Scotland LTT in Wales.
Financial terms
Sublease break option terms	Multiple parties	Optional depending on transaction	Defines any early termination right and conditions for valid exercise.	Break date, notice period, rent paid, vacant possession and removal of occupiers.
Headlease review
Subtenant indemnities for headlease breaches	Professional adviser	Recommended	Protects the sublandlord where the subtenant causes a headlease breach.	Unauthorised use, damage, nuisance, non-compliance, alterations or enforcement costs.
Property details
Building rules, nuisance and hours of use	Managing agent	Recommended	Ensures the subtenant's occupation fits building management requirements.	Opening hours, noise, deliveries, waste, security, smoking and contractor access.

What Should Be Checked Before Preparing A UK Commercial Sublease?

A commercial sublease should usually start with the headlease. The sublandlord can only grant rights it already has, so the permitted use, premises, term, rent review position, alienation clause, repair obligations and insurance arrangements must be checked before drafting. If the headlease prohibits underletting or requires superior landlord consent, the sublease should not be completed until consent is obtained.

When Is Superior Landlord Consent Needed For A Commercial Underlease?

Many UK commercial leases require the superior landlord\'s written licence to underlet. The Landlord and Tenant Act 1988 can require a landlord to deal with a written application for consent within a reasonable time where consent is not to be unreasonably withheld. The sublandlord should provide a complete consent pack, including the proposed subtenant\'s identity, references, draft underlease, plans and any required undertakings for costs.

Which Information Is Most Important Before Signing?

Property and title details: the exact premises, Land Registry title number, plan and any shared rights should match the headlease and the underlease.
Financial terms: rent, VAT, rent deposit, service charge, insurance rent and payment dates should be clear and consistent with the headlease.
Compliance evidence: EPC, asbestos information, fire safety responsibilities, use class and statutory compliance duties should be allocated before occupation.
Execution evidence: company authority, witnessing, completion documents and delivery of any licence to underlet are needed to avoid uncertainty over whether the sublease is binding.

Commercial Sublease Preparation Checklist

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FAQs

What is a Commercial Sublease Preparation Checklist?

A Commercial Sublease Preparation Checklist is a practical guide to the key information and documents needed before creating a commercial sublease or underlease in the UK.

Why should I use a checklist before preparing a commercial sublease?

What information is needed to prepare a Commercial Sublease Agreement?

Do I need landlord consent for a commercial sublease in the UK?

What is the difference between a commercial sublease and an underlease?

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