To legally sublease your commercial office in Calgary, you must obtain written “Landlord’s Consent.” Doing this secretly violates your contract. You will need to submit the proposed subtenant’s corporate financials to the property manager, and you remain ultimately responsible if the new tenant damages the space.
Calgary’s business landscape moves quickly. A startup may outgrow its downtown office space in just two years, or an established logistics company might need to downsize their warehouse footprint. Whatever the reason, you are left with a commercial lease that you are legally bound to pay for several more years. The most logical solution is to find another business to take over the space.
However, commercial real estate in Alberta does not operate on a handshake basis. 📝 You cannot simply hand your keys to a friend’s company and ask them to start e-transferring you the rent. Almost every commercial lease contains strict rules regarding subletting and assignment. If you attempt to quietly sublease the space in 2026, the building owner can immediately evict both you and the new business. Here is the proper legal pathway to successfully sublease your property.
Step-by-Step Process for Subleasing in Calgary
Transferring your office space requires full transparency and cooperation with your landlord. Here is how a commercial real estate lawyer recommends handling the transaction.
Step 1: Reviewing the Assignment and Subletting Clause
Before you list the space online, pull out your massive commercial lease agreement and locate the “Assignment and Subletting” clause. 🔍 This section dictates the exact rules you must follow. It usually states that you cannot sublease the space without the landlord’s prior written consent, but it also typically states that the landlord cannot “unreasonably” withhold this consent if you find a financially stable replacement.
Step 2: Securing a Qualified Subtenant
You must actively market the space and find a business willing to take it over. The proposed subtenant must be reputable. Once you find an interested party, your lawyer will draft a formal “Sublease Agreement.” This contract outlines that the subtenant will follow all the rules of the original “Head Lease” you signed with the building owner.
Step 3: Submitting the Consent Request Package
You cannot just text the landlord your plan. 📁 You must submit a formal consent package. This usually includes a copy of the drafted Sublease Agreement, the new company’s corporate background, and their recent financial statements. The landlord needs proof that this new business can actually afford the monthly rent.
Step 4: Executing the Landlord’s Consent Agreement
If the landlord approves, their law firm will draft a three-party document called a “Consent to Sublease.” 🔮 You, the subtenant, and the landlord all sign this document. It officially permits the new business to occupy the space while firmly reminding you that if the subtenant stops paying rent, the landlord will still hold your original company legally responsible.
How Much Does it Cost in Alberta?
Subleasing a commercial space is an administrative burden for the landlord, and they will pass those costs entirely onto you. Here is what you should budget for closing the deal in 2026:
| Landlord Review Fee | $1,000 to $2,500 CAD | A non-refundable fee required by the lease for the landlord to review your subtenant’s financials. |
| Your Lawyer’s Fees | $1,500 to $3,500 CAD | Fees to draft the Sublease Agreement and negotiate the terms with the landlord’s legal team. |
| Commercial Broker Commission | Varies (Percentage) | If you hire a commercial real estate agent to find the subtenant, they charge a fee based on the sublease value. |
Remember that even though you are leaving the space, you may still have to pay the rent during the months it sits empty while you search for the subtenant. 💰
How Long Does the Process Take?
The timeline heavily depends on the current Calgary real estate market. Finding a qualified business to take over an office or retail location can take anywhere from 2 to 6 months.
Once you actually find the subtenant and submit the formal paperwork, commercial leases usually grant the landlord a specific review window. 🕑 Under Alberta law, landlords generally have 15 to 30 days to review the financial package and either grant or deny their written consent to the sublease.
Frequently Asked Questions (FAQ)
Can the landlord refuse my subtenant just because they want to?
Usually, no. Most commercial leases contain a clause stating consent cannot be “unreasonably withheld.” If the proposed subtenant has excellent credit and a solid business plan, the landlord must generally approve them. They can only refuse for valid business reasons, like terrible credit or if the new business directly competes with another tenant in the plaza.
What is the difference between an Assignment and a Sublease?
A sublease means you are renting out part or all of the space, but your original company remains the primary tenant on the hook for the lease. An “Assignment” means you are completely transferring the entire lease to the new company, stepping away entirely. Assignments are much harder to get a landlord to approve.
Who pays for damages caused by the subtenant?
You do. Under a standard sublease, you remain fully liable to the primary landlord. If your subtenant destroys the walls or causes water damage, the building owner will sue you, and you will then have to sue your subtenant to recover the money.
Can I charge the subtenant more rent to make a profit?
Many commercial leases in Alberta explicitly state that if you sublease the space for a higher rate than your current rent, the landlord gets to keep 100% of the “bonus profit.” You must carefully review your specific contract to see if this restrictive clause exists.
What happens if I sell my entire business?
If you sell the shares of your corporation, the tenant name technically remains the same. However, commercial leases almost always contain a “Change of Control” clause, which treats selling your company as an Assignment. You still need the landlord’s written consent before finalizing the business sale.
Leave a Reply