Skip to main content
Book a call — £89
Menu

Subletting Commercial Lease UK: Landlord Consent Guide

We're not a law firm — we help you find the right legal support. For advice on your situation, speak to a legal adviser or find a solicitor.

Part ofUK Property Law Guide

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
If you hold a commercial lease and want to pass part or all of your space to another business, you are almost certainly going to need your landlord's permission first. Subletting (often called underletting in commercial property circles) is a common way for tenants to free up unused space, recover some rent, or exit a property without surrendering the lease entirely. The mechanics sit at the intersection of your lease terms, landlord and tenant law, and the practical realities of running a business. This guide walks through how subletting works in commercial settings, what a licence to underlet does, and the main points worth understanding before you start the conversation with your landlord. It is written for tenants and landlords in England and Wales dealing with business premises rather than residential lettings.

Overview

Subletting happens when a tenant grants a new tenancy to a third party while still holding the original lease from the landlord. The tenant becomes a middle party, sometimes called the mesne landlord, sitting between the freeholder or superior landlord and the new occupier, known as the subtenant or undertenant.

The original lease continues unchanged, and the tenant remains on the hook for rent and all other obligations owed to the landlord. The sublease creates a separate contractual relationship between the tenant and the subtenant. Most commercial leases include a clause controlling what the tenant can and cannot do with the premises.

Many allow subletting but only with the landlord's written consent, and that consent is usually documented in a licence to underlet. The licence records the landlord's permission, sets out any conditions attached, and brings the subtenant into a direct set of undertakings with the landlord.

Without the right consent in place, a sublease can put the tenant in breach of the head lease and expose them to forfeiture.

Key steps

  1. Check what your lease actually allows. Read the alienation clause in your lease carefully. It will tell you whether subletting is permitted at all, whether it applies to the whole or only parts of the premises, and what conditions attach, such as minimum rent levels or authorised guarantee arrangements. This is the starting point for everything that follows.
  2. Approach the landlord with a written request. Send a formal request for consent, setting out who the proposed subtenant is, what they do, the rent and term being proposed, and how much of the premises is affected. Include financial information about the subtenant so the landlord can assess their covenant strength. A complete request helps avoid delays.
  3. Negotiate the licence to underlet. The landlord's solicitors will usually draft the licence. Expect it to include direct covenants from the subtenant to the landlord, conditions mirroring the head lease, and sometimes a requirement for a rent deposit or guarantor. Both sides need to agree the terms before signing.
  4. Prepare and complete the sublease itself. Alongside the licence, the tenant and subtenant enter into the sublease document. This sets out the rent, term, repair obligations, and other commercial terms between them. The sublease must not conflict with anything in the head lease or licence.
  5. Deal with post-completion formalities. Depending on the length of the sublease, it may need to be registered at HM Land Registry. Stamp Duty Land Tax may also be payable by the subtenant. Keep signed copies of the licence, the sublease, and any side letters somewhere safe, because you will likely need them later.

Common questions

If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £149.

Common questions

Q Can my landlord refuse consent to sublet?
It depends on what your lease says. Most commercial leases include a qualified covenant against subletting, meaning consent is needed but cannot be unreasonably withheld. The Landlord and Tenant Act 1988 requires landlords to respond within a reasonable time and to give reasons for any refusal. If a landlord refuses without good grounds, a tenant may have a claim, but each case turns on its facts.
Q What is the difference between subletting and assignment?
Assignment transfers the entire lease to someone else, so the outgoing tenant drops out of the picture (subject to any guarantee arrangements). Subletting is different: the original tenant stays in place and grants a new, shorter tenancy to the subtenant. The original tenant remains liable to the landlord under the head lease, which is an important distinction when things go wrong downstream.
Q Who pays the landlord's legal costs for the licence?
In nearly all cases, the tenant pays both their own legal costs and the landlord's reasonable costs of dealing with the consent application. This is usually written into the lease itself. Costs can rise quickly if the deal is complex or if negotiations drag on, so it is worth asking the landlord's solicitors for an estimate early in the process.
Q Can I sublet part of my premises rather than the whole?
Only if your lease permits it. Some leases restrict subletting to the whole premises, while others allow subletting of clearly defined parts. Where partial subletting is allowed, you will normally need to show how the space is physically separated, how services are shared or apportioned, and how access works. The landlord will want to avoid practical issues with a divided building.
Q What happens if I sublet without consent?
Subletting in breach of the lease is a serious matter. The landlord may be entitled to forfeit the lease, bringing it to an end, and can potentially claim damages. The sublease itself may still be effective between tenant and subtenant, but it leaves both parties exposed. If consent has been requested and wrongly refused, the position is different, but proceeding without asking at all is a high-risk route.
Q Does the subtenant get security of tenure at the end of the sublease?
Business tenancies are usually protected under Part II of the Landlord and Tenant Act 1954, which gives tenants a right to renew. However, the parties can agree to contract out of this protection before the sublease is signed, using the statutory notice and declaration procedure. Whether to contract out is a key commercial decision that should be worked through before the sublease is completed.
Q Is a licence to underlet the same as a deed of variation?
No. A licence to underlet is specific permission for a sublease and does not change the terms of your head lease. A deed of variation formally alters the terms of the existing lease between landlord and tenant. The two documents can be used together, for example if the landlord is willing to sublet only if certain lease terms are also tweaked, but they serve different purposes.
If you're dealing with this kind of situation, a call with an experienced legal adviser can help you work out the right next step — from £149.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

Full profile →SRA register ↗
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.