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Distinguishing Office Leasing, Subleasing, and Transfering

Distinguishing Office Leasing, Subleasing, and Transfering

Office leasing and leasing is one of the common activities in the business field that every business needs to know. However, there is not only one form, in which many other cases arise, such as office sublease and office transfer.

What is office leasing?

What is office leasing?

In office leasing, the lessor is the owner, the investor, or the person authorized by the owner and the object of the lease is the office building or part of the office space in the building. In terms of legal nature: office leasing does not transfer ownership, or the right to use the building, but only the right to exploit.

Therefore, the content of the office lease contract mainly refers to the terms of commitment between the lessor and the lessee: the lessor must ensure the right to exploit and use the office conveniently for the lessee, and the lessee must secure the rental payment to the lessor as agreed in the contract.

What is an office sublease?

Office sublease means that the lessee sub-lets another person the right to exploit and use part or the whole of the rented office leasing area with the consent of the lessor (who is the owner of the building). At that time, the office lease contract will be signed between the sub-tenant and the original tenant, not the building owner.

Example: Party A is the owner of the building, and Party B is the tenant of the office. Party B leases an office and signs an office lease contract with Party A. After renting the office, Party B operates a full-service office rental business, Party C rents an office from Party B. In this case, party C and party B will sign a contract.

In principle, it is forbidden to sublease the office unless the lessor agrees in writing, or in the lease contract, there is a provision regarding this issue. If the contract does not stipulate, the owner of the building refuses the tenant to sublet, the lessor cannot perform.

In case the contract stipulates that sublease is allowed, the tenant must still notify the building owner of his intention to sublease by sending a certified letter with a receipt with a fixed time limit. clearly for them to respond. If the owner of the building does not respond or responds with disagreement, the tenant can still sublease and the sublease is considered valid.

Note, if the sublease price is higher than the main rent, the property owner may demand a corresponding increase in rent. Therefore, office tenants, if there is a need to sublet, should negotiate with the building owner all terms of support and increase in rent before signing the contract.

What is office transfer that different from office leasing?

What is office transfer that different from office leasing?

Different from office leasing, for office transfer, there will be 2 cases:

  • If you are a lessee, transferring office means ceding the office leasing, the concession of business exploitation of the signed office leasing area to another party with the consent of the lessor.
  • If you are the owner of a building that is exploiting and using the facility to make an office for a business, then transferring the office means sharing the right to own and use the facility with an individual or unit. other according to agreement or contract. (Refer to articles 163 to 279 of the 2005 Civil Code to better understand the legal provisions on property and ownership)

In addition, when participating in the transfer of offices, it is necessary to note the conditions of the project’s legality. The corporate office project that needs to be transferred must meet all the conditions required by the law in terms of papers, no dispute, and still have the term of use (according to Clause 1, Article 188 of the Land Law 2013).

Besides, to refer to the rights and obligations of the parties in the office transfer contract (when the transferor is the owner of the building), read more about the Law on Real Estate Business 2014.

You can read the previous article here: 3 Grow Groups of Office Rental Cost Expenses

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