ARTICLE
2 July 2025

Subleasing for medical practices: A simple guide and checklist

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Avant Law

Contributor

Avant Law is a doctor-focused law firm that was originally established for our members in 2009 to provide the highest level of defence and protection in medical indemnity. It is now the largest medico-legal firm in Australia and continues to protect members for medical indemnity and employment issues and provide expert advice to help reduce the risk of a complaint or claim. With our deep understanding of medical practitioners and their practices and to help support doctors across life’s opportunities and challenges, we provide tailored legal services to address their personal, professional and business legal needs. Avant Law is a subsidiary of Avant Mutual (Avant) – Australia’s leading doctor organisation with a proud heritage of protecting the Australian medical professional for 130 years.
Guide & checklist - the key considerations & steps involved in subleasing commercial spaces.
Australia Real Estate and Construction

Subleasing can be a practical solution for medical practices looking to optimise their space and reduce costs. This guide and checklist will help you understand the key considerations and steps involved in subleasing commercial spaces.

Subleasing

Subleasing occurs when a tenant rents out part or all of their leased space to another party (the subtenant). This arrangement can be beneficial for both parties, but it is important to navigate it correctly to avoid legal issues.

Risks

As the primary tenant, you remain liable to the landlord for the entire leased space. Ensure that the subtenant adheres to the terms of the original lease.

It is also important to choose a subtenant whose business activities are compatible with your medical practice to avoid disruptions.

Original Lease Agreement

Before you consider subleasing, review your original lease agreement. Ensure that subleasing is permitted and understand any conditions or restrictions imposed by your landlord. Some leases may require landlord consent before you can sublease, while others may restrict subleasing altogether.

Landlord Consent

If required, seek written consent from your landlord. Provide details about the proposed subtenant and the terms of the sublease. Landlords typically want to ensure that the subtenant is financially stable and that the sublease will not negatively impact the property.

Checklist

A "no" or "unsure" response to any of the questions in the checklist indicates that you have identified an area that your sublease may not be legally compliant or market standard. You should seek independent legal advice on the relevant area.

The checklist is not an exhaustive list of all legal matters that should be considered and is not a substitute for obtaining specific legal, tax and accounting advice.

Related Subleases

Where the landlord and tenant are related entities, such as in a self-managed super fund (SMSF) arrangement, and the tenant subleases to a third party, it is crucial to ensure that the sublease incorporates all the required terms to protect both the landlord and the tenant. This ensures potential disputes with the third-party subtenant are minimised. Properly drafted sublease agreements help maintain the integrity of the leasing arrangement and provide legal clarity and protection for all parties involved.

We can help you

Avant Law is a full-service commercial law firm specialising in the medical sector. Feel free to contact us to ensure that your sublease agreement complies with the relevant laws and regulations. We can help you address any potential legal issues and ensure that your rights are protected.

To organise a confidential discussion at a time that suits you, please click here

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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