Sublease – what it is? Sublease agreement in Ukraine.

Sublease - this is the direct consent of the lessee to transfer the property for temporary possession and use to the sub-lessee. The lessee has the right to enter into a sublease agreement provided, if the lessor agrees and this provision is enshrined in the contract.

Sublease agreement

Law of Ukraine 435-V defines the legal relationship in the field of sublease as follows:

Sublease according to article 774 Of the Civil Code of Ukraine is the assignment of rights under a contract to a third party. The legal relationship of all 3 parties must be settled by an agreement:

• Under the first contract, there must be a lease agreement between the landlord and the tenant (hiring);
• There must be a sublease agreement between the lessee and the sublease.

The sublease agreement must meet the following prerequisites:

• The sublease term cannot exceed the main lease agreement;
• If the main lease does not contain an agreement to lease the property, such a transaction cannot be recognized as legal.

note, the terms in the agreement must not conflict with the main agreement.

If the parties have reached an agreement, the tenant can do the following:

• Select new subtenants - the right to choose a party is solely within his competence. Landlord, in the presence of a special clause in the agreement, it is not entitled to interfere in this process;
• The property or thing may not necessarily be transferred on terms of payment. For example, the main contract is concluded on a monthly basis, and the sublease agreement can be transferred for free use (except for the participation of legal entities in it);

Why conclude an agreement?

The advantage of such a deal structure is obvious.. For example, for the owner of a large commercial space. Provides all property to a specific management company. The latter finds tenants for commercial space and performs the functions of object management: technical support, service and maintenance, payment of taxes. All parties to the transaction receive benefits. The property owner relieves himself of the time-consuming processes of finding clients and servicing real estate, the management company works directly with the attracted subleasers.

Another trick is, that this contractual structure allows you to increase monthly payments for a conventional square meter. The management company divides the area of ​​real estate into small sectors and increases the payment. There is a simple rule - it is easier to find a client for a smaller area.

Recommended to read: How to rent an apartment in Ukraine?

What will sublease give for the tenant?

The opportunity to improve your business performance. For example, the landlord agrees to repair the premises at the expense of the tenant. To offset costs, the lessor offers the latter to sublet part of the property. Payment for such an operation will be considered as compensation for expenses.

Many companies go for this trick.. Providing sublease to tenants as an added bonus when concluding a contract.

Sub-lessee's risks

Ukrainians make the most common mistakes. The main risks are borne by the subtenant. In case of recognition of the transaction as invalid, he is the one who loses the most. If a non-residential premises sublease agreement has been concluded, the subtenant may lose the right to return all accrued payments.

The lessor has the right to terminate the sublease at any time.. If installed, that the contract does not meet the terms of the original transaction. There can be no talk of any compensation payments. Pay attention to another mistake. If the original contract was subject to notarial registration, the subsequent sublease agreement must also be notarized. If the condition is not met - the transaction cannot be recognized as legal. Consequently, the sub-lessee loses all the lease payments made and investments made during the period of the contract.

Read the article: Taxes on the sale and purchase of real estate in Ukraine

What to look for when concluding a sublease agreement?

• Deadline for the conclusion of the transaction. Always be sure to ask for the main contract. The term of the sublease cannot exceed the term of the main contract. Even if the tenant approves, which will be able to renew the lease agreement.
  
  
• The tenant violates the terms of the contract. For example, delays payment of utility bills, does not maintain property in good technical condition, does not perform minor maintenance (as stipulated by the terms of the contract). In this case, the landlord has the right to block access to the premises not only for the tenant.. But all faces, with whom the latter has entered into a sublease agreement. Even if the sub-lessee fully ensured the fulfillment of the law and the terms of the contract, the position of the lessor will be fully justified and not contradict the provisions of the Civil Code of Ukraine.
  
  Usually, conflict situations often arise due to delays in the rent of the tenant to the landlord. The only guarantee for the subtenant, there may be a quick termination of the terms of the sublease agreement with the transfer of all payments to the lessor.
  
  
• Early termination of the terms of the contract. On practice, the following conflict situation often occurs. The landlord and the tenant have entered into an agreement. The latter with the consent of the landlord, concluded a sublease agreement. A few months later, the parties terminated the agreement ahead of schedule. The sub-lessee is in a vulnerable position - according to the rules of the deal, he is also obliged to withdraw from the contract.

What needs to be done in this case?

Include additional guarantees in the text of the agreement. For example, payment of compensation expenses for the subletser. You can provide additional beneficial benefits for yourself. If the contract is terminated, the tenant pays certain penalties or costs. There is nothing reprehensible in such conditions., because with the sublease agreement, usually, subtenant pays an additional deposit. Upon termination of the main contract, it might just burn out – this amount will not go to the landlord's account. To demand it at the time of termination of the agreement is simply pointless.. All sublease payments are subject to a separate agreement. The payment between the landlord and the tenant is based on the construction of another transactionand.