What is a sublessee in a leasing agreement?

In a leasing agreement, a sublessee refers to a tenant who rents the property from the original leaseholder, also known as the sublessor. This arrangement occurs when the original tenant has the right to lease all or part of the premises to another person, effectively creating a secondary lease. The sublessee occupies the premises under the terms agreed upon with the sublessor, rather than directly with the landlord.

This concept is fundamental in real estate and property management as it allows the original tenant to retain some degree of interest in the property, while also transferring certain rights of occupancy to the sublessee. Such arrangements can be beneficial for both parties, enabling the original tenant to fulfill their lease obligations while also potentially generating income from renting out their space.