If your business no longer needs all or part of its office space in central London, subletting or assigning your lease can be a strategic way to reduce costs and meet your changing requirements. However, the process is not always straightforward and requires careful planning to comply with legal and contractual obligations. Here’s a step-by-step guide to subletting or assigning an office lease in central London.

1. Understand Your Lease Terms

Before proceeding, review your lease agreement to determine:

  • Whether subletting or assignment is allowed – Some leases prohibit subletting or assignment entirely, while others allow it under specific conditions.
  • Landlord consent requirements – Most leases require the landlord’s written approval before you can sublet or assign the space.
  • Restrictions and conditions – Common restrictions include a minimum rent level for sublets, the requirement to assign to a tenant of similar financial standing, or limitations on the use of the space.

2. Decide Between Subletting and Assignment

  • Subletting – You remain the primary tenant and lease out all or part of the space to another business. You’re still responsible for paying rent and ensuring lease compliance.
  • Assignment – You transfer the lease to a new tenant, who takes over all obligations. This fully removes your liability, unless the landlord requires you to act as a guarantor.

Choosing between the two depends on factors such as your lease terms, how much space you want to offload, and whether you want to retain a connection to the property.

3. Obtain Landlord Consent

Once you identify a potential subtenant or assignee, you must formally apply for landlord approval. The landlord will typically request:

  • Financial details of the proposed tenant to assess their ability to meet lease obligations.
  • Business background and references to ensure they are a suitable occupier.
  • A formal application, often accompanied by legal and administrative fees.

Landlords cannot unreasonably withhold consent, but they may impose conditions, such as requiring a rent deposit from the new tenant or keeping the original tenant liable under an authorized guarantee agreement (AGA).

4. Market the Space and Find a Tenant

To attract the right subtenant or assignee, you may need to:

  • Engage a commercial property agent specializing in office disposals.
  • Advertise on property listing websites and industry networks.
  • Offer incentives, such as rent discounts or a furnished workspace, to make the space more appealing.

5. Negotiate Terms and Sign Legal Agreements

Once a suitable tenant is found and landlord approval is secured, you’ll need to formalize the agreement. This typically involves:

  • A sublease agreement (if subletting), outlining terms such as rent, duration, and responsibilities.
  • A deed of assignment (if assigning), transferring all lease obligations to the new tenant.

Legal advice is crucial at this stage to ensure compliance with lease terms and minimize risks.

6. Manage the Transition

After the agreement is signed, you must facilitate a smooth handover, including:

  • Notifying the building management and updating access permissions.
  • Coordinating with the new tenant on IT, utilities, and office fit-out.
  • Ensuring compliance with any landlord-imposed conditions.

Conclusion

Subletting or assigning an office in central London can help businesses reduce costs and adapt to changing needs, but the process involves navigating lease restrictions, landlord approvals, and legal agreements. With the right approach and professional guidance, you can successfully transfer your office space while protecting your financial and contractual interests.