A Commercial Sublease is essential when a tenant wishes to transfer part or all of their leasehold interest to another party while maintaining their obligations under the original lease. This document is commonly used in Hong Kong's dynamic commercial property market where businesses need flexibility in their property arrangements. It must comply with Hong Kong's property laws and regulations, particularly the Landlord and Tenant (Consolidation) Ordinance and the Conveyancing and Property Ordinance. The agreement details crucial elements such as premises description, term length, rental payments, permitted use, maintenance obligations, and insurance requirements. It's particularly important that the Commercial Sublease aligns with the head lease terms and includes any necessary landlord consents, as required under Hong Kong law.
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1. Parties: Identification of sublandlord and subtenant, including full legal names and addresses
2. Background: Context of the sublease, including reference to the head lease and confirmation of authority to sublease
3. Definitions: Definitions of key terms used throughout the sublease agreement
4. Demise: Specific description of the premises being subleased and any included fixtures/fittings
5. Term: Duration of the sublease, including commencement and expiration dates
6. Rent and Payment Terms: Rental amount, payment schedule, and method of payment
7. Security Deposit: Amount, payment terms, and conditions for return of the security deposit
8. Use of Premises: Permitted use of the premises and any restrictions
9. Maintenance and Repairs: Responsibilities of each party regarding maintenance and repairs
10. Insurance: Required insurance coverage for both parties
11. Assignment and Further Subletting: Restrictions and conditions on assignment or further subletting
12. Compliance with Head Lease: Subtenant's obligations to comply with head lease terms
13. Termination: Circumstances and procedures for early termination
14. Governing Law: Specification of Hong Kong law as governing law
15. Execution: Signature blocks and execution requirements
1. Break Clause: Optional provision allowing early termination under specific conditions
2. Rent Review: Include when periodic rent adjustments are desired during the term
3. Service Charge: Required when the premises are part of a larger building with shared services
4. Alterations and Improvements: Include when subtenant wishes to make changes to the premises
5. Green Lease Provisions: Environmental and sustainability requirements, if relevant
6. Guarantee: Include when a guarantor is required for the subtenant's obligations
7. Option to Renew: Include if subtenant is granted option to extend the term
8. Exclusive Use: Include if subtenant is granted exclusive rights for certain business activities in the building
1. Schedule 1 - The Premises: Detailed description of premises including floor plans and measurements
2. Schedule 2 - Head Lease: Copy or relevant excerpts of the head lease
3. Schedule 3 - Rent Payment Schedule: Detailed breakdown of rent payments and due dates
4. Schedule 4 - Condition Report: Description of premises condition at commencement of sublease
5. Schedule 5 - Building Rules and Regulations: Applicable building rules and regulations
6. Schedule 6 - Fixtures and Fittings: Inventory of included fixtures and fittings
7. Appendix A - Plans: Floor plans and location maps
8. Appendix B - Fit-out Guidelines: Guidelines for any permitted alterations or fit-out works
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