Legal Definitions - underlessor

An underlessor (also commonly referred to as a sublessor) is an individual or entity that has leased property from an original owner or landlord, and then, in turn, leases a portion or all of that property to a third party. In this arrangement, the underlessor acts as both a tenant to their original landlord and a landlord to their new tenant (known as the sublessee). The original lease agreement between the owner and the underlessor remains in effect, and the underlessor is still responsible for fulfilling its terms and obligations.

Here are some examples to illustrate the concept of an underlessor:

• Commercial Office Space: "Tech Innovations Inc." leases an entire floor of an office building from "Corporate Towers LLC" for a five-year term. After two years, Tech Innovations Inc. realizes they only need about 60% of the space due to a shift towards remote work. With Corporate Towers LLC's permission, they enter into a sublease agreement with "Startup Solutions Co." to rent out the unused 40% of their leased floor for the remaining three years of their original lease.

  In this scenario, Tech Innovations Inc. is the underlessor. They are the primary tenant of Corporate Towers LLC, but they are now acting as a landlord to Startup Solutions Co. by granting them a lease for a portion of the space they themselves lease.

• Residential Apartment: David leases a two-bedroom apartment from "Parkside Properties" for a one-year term while attending graduate school. For the three-month summer break, David plans to travel abroad and will not be using the apartment. With permission from Parkside Properties, David finds a visiting scholar, Dr. Chen, who needs a furnished place to stay for the summer and agrees to sublease his apartment to her for that period.

  Here, David is the underlessor. He is the primary tenant of Parkside Properties, but he has temporarily become a landlord to Dr. Chen by granting her a short-term lease for the apartment he originally leased.

• Retail Storefront: "Boutique Fashion House" leases a large retail space in a popular shopping district from "Urban Developments Group" for a ten-year term. After several years, they decide to focus on online sales and no longer require the entire storefront for their physical inventory. They decide to sublease a smaller, distinct section of their retail space to "Artisan Jewelry Co.," a local craft vendor, allowing Artisan Jewelry Co. to operate a pop-up shop within their premises.

  In this instance, Boutique Fashion House is the underlessor. They hold the master lease with Urban Developments Group, but they are now acting as a landlord to Artisan Jewelry Co. by leasing a portion of their rented space to them.