What is a Sublease or Sublease Agreement?

What is a sublease or sublease agreement? I've been to some companies and I always wondered how those companies were able to share office space with another company. I always described our office to other people as "an office within another company's office". Then, I encountered about this term not too long ago. I actually blogged about it on my first ever true blog about finance, gadgets, toys... Actually... It was about everything so I just decided to make a more focused blog on finance.

Sublease Agreement Defined

A sublease agreement is an understanding between two parties, usually companies that they will share a the same rented space. The first tenant rents and then also puts the rented place for rent to a third party tenant. My father actually did this as we used to rent a house from our uncle and then we allowed a friend to rent a small room in our rented house.

Now, this could present a conflict of interest so it's best discussed with the owner or manager of the property first. How can this be useful? Well... You might have rented an apartment that is too big for you, but you already gave a down-payment and already moved-in. It might not be practical to pull out anytime soon so one of the things you can do is to sublease your apartment.

Just clarify some confusion... A lease or leasing as I learned back in school is "renting with the intent to buy". Somehow today, leasing is just associated with renting without having any intention to buy the property.