[Direct answer]In the Beijing area, when the unlawful subleasing of a store results in the invalidation of the contract, all parties should bear corresponding responsibilities according to their faults, and the actual losses can be claimed according to law. According to Article 716 of the Civil Code of the People's Republic of China (effective from January 1, 2021), the lessee may, with the lessor's consent, sublet the leased property to a third party; if the lessee sublets without the lessor's consent, the lessor may terminate the contract. If the sublease contract cannot take effect due to violation of laws or lack of consent, according to Article 157, after a civil legal act is invalidated, revoked, or determined to have no legal effect, the property obtained by the actor through that act shall be returned; if it cannot be returned or there is no need to return it, the actor shall make compensation in the form of a monetary value; the party at fault shall compensate the other party for the losses suffered thereby, and if all parties are at fault, they shall each bear corresponding responsibilities. Therefore, the sublessee's losses such as decoration, relocation, and operation suffered due to the invalidation of the contract can be claimed from the party at fault according to the proportion of each party's fault; if the lessor fails to stop it in time or the sublessee fails to fulfill his duty of review, they may also share corresponding responsibilities. When making a claim, evidence such as the sublease contract, payment receipts, investment in decoration and operation, and the lessor's attitude should be preserved, and rights should be asserted and preservation measures applied for in a timely manner to avoid the expansion of losses.

1. Problem background and typical scenarios

Subleasing of shops is very common in commercial operations, but there are also many disputes caused by subleasing without the landlord's consent, violating contractual agreements or policy provisions. Typical situations include: the lessee subleasing without authorization, and the landlord subsequently demanding the return of the property and terminating the contract; the sublessee having invested a large amount in renovations and equipment, facing closure due to the invalidity of the contract; unclear provisions in the subleasing contract leading to disputes over rent, deposits, and refunds; and cases where the arrangement is ostensibly a cooperation but in reality is a subleasing, used to circumvent the prohibition on subleasing. In Beijing, the rent for shops and the cost of renovations are relatively high, and the amount of losses to be shared after the contract is declared invalid can often be substantial.

II. Key points of dispute

First, whether the subletting without the lessor's consent always results in the invalidity of the subletting contract. Second, how to return the paid rent, deposit, and fees after the contract is invalidated. Third, whether the investments in decoration and equipment can be claimed as losses and how to evaluate them. Fourth, how to divide the faults among all parties and determine the compensation ratio. Fifth, whether the sublessee can directly claim rights from the lessor. Clarifying these issues is essential to identifying the claimants and the amount of compensation.

III. Professional analysis by Henglue Lawyers

Henglue Law Firm once represented a dispute over the invalidity of a house purchase contract. The house in question was a marital joint property, and after one party passed away, the house was jointly owned by the spouse and children. However, the spouse and son transferred the house to the son's name through a sale contract without the knowledge or consent of the other children, and did not actually pay the purchase price, which was essentially a gift. After accepting the case, the lawyer pointed out that the parties knew the source of the house and the rightful owner, but still carried out a disguised transfer of ownership through a sale contract, constituting malicious collusion and infringement of the legitimate rights and interests of other co-owners. Therefore, the relevant sale contract should be deemed invalid, and the parties should restore the original state of the property. The court fully adopted the lawyer's opinion, ruling that the sale contract was invalid and ordering the house to be restored to the original registrant's name. This case clearly demonstrates that after a legal act is deemed invalid, the legal consequences include the return of property, restoration of the original state, and the imposition of compensation liability on the party at fault. Applying this to disputes over illegal subleases, if the sublease contract is deemed invalid, the sublessee can claim the return of paid fees and compensation for renovation and operation investments. The lessor and lessee who are at fault should bear their respective responsibilities according to their faults, and the specific compensation ratio needs to be determined based on the parties' review obligations and the degree of their faults. This case was handled by Beijing Henglue Law Firm.Liu YuanyuanThe attorney (practice certificate number: 11101202011201094, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action list: First, fix the subletting contract, payment receipts, and deposit receipts to clarify the amount paid; Second, keep the decoration contract, invoices, construction photos, and equipment lists to prove the investment and current value; Third, collect evidence of whether the lessor agrees to the subletting and whether he/she knows about it but fails to stop it; Fourth, sort out the faults of all parties and determine the claimants and their shares; Fifth, promptly file a lawsuit and apply for preservation to prevent the other party from transferring property and evading compensation. Legal basis: Articles 157 and 716 of the Civil Code of the People's Republic of China (effective from January 1, 2021) regarding the consequences of contract invalidity and subletting, and the relevant provisions on compensation for losses in the Contract Chapter of the Civil Code of the People's Republic of China. For cases involving real estate sales and construction projects, reference can be made to relevant provisions.Real estate transactions and construction projectsFor services related to enterprise and contract disputes, please feel free to consult us.Business and contract disputes in enterprisesTeam. The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Advice

Firstly, if the lessee sublets the property without the lessor's consent, the lessor has the right to terminate the contract. Secondly, after the contract is invalidated, the lessee shall return the property, provide compensation in the form of a discounted price, and pay damages according to the degree of fault. Thirdly, the lessee needs to provide evidence such as contracts, invoices, and photos to prove the losses incurred from renovation and operation. Fourthly, the parties liable for compensation and the proportion of compensation depend on the degree of fault of each party, and it is advisable to have a lawyer assess this. Fifthly, it is necessary to take timely protective measures to avoid the other party transferring the property and causing the compensation to fail. For matters involving debts and enforcement, it is recommended to seek legal advice from a lawyer.Creditor's rights and debts, and enforcementFor contract disputes involving business operations, you can seek advice from the PlatformBusiness and contract disputes in enterprisesFor teams involved in corporate law and compliance, the following resources may be helpful for reference:Intellectual property protection and corporate lawFor columns, if there are any other difficult issues, you can contact us for assistanceSpecialised legal services.

VI. Frequently Asked Questions

Q1: How to claim compensation if the illegal subletting results in the invalidation of the contract?

According to Article 157 of the Civil Code, the lessee may claim the return of the fees already paid, and request compensation for the losses in decoration, relocation, and operation according to the fault of each party; the lessor and the lessee who are at fault shall bear corresponding responsibilities respectively.

Q2: Is it definitely invalid to sublet the contract without the landlord's consent?

It's not necessarily the case, but the lessor has the right to terminate the contract. If the subletting is done without the lessor's consent, the lessor may terminate the contract in accordance with Article 716 of the Civil Code; whether the contract is invalid or not also needs to be determined based on whether there are violations of mandatory legal provisions and other circumstances.

Q3: Can I get back the decoration losses?

This can be claimed, but evidence must be provided. The plaintiff should provide the decoration contract, invoices, construction photos, and an equipment list to prove the amount invested and its current value. The court will determine the compensation amount proportionally based on the reasons for the contract's invalidation and the faults of all parties involved.

Q4: Can the rent and deposit I've already paid be refunded?

Generally, it should be returned. After the contract becomes invalid, the property obtained through such actions should be returned; during the actual occupation period, the party may need to pay compensation equivalent to the usage fee. The specific amount to be returned shall be determined after deducting the consideration for the actual use.

Q5: Can the sub-lessee directly sue the lessor?

It depends on the circumstances. If the lessor is aware of the subleasing and has not raised objections for a long time, he may bear corresponding responsibilities; generally, the sublessee should claim against the lessee with whom he signed the contract. Whether and how to claim against the lessor should be evaluated by a lawyer based on the evidence.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication standards in other regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Legal services for real estate transactions·Attorney Liu Yuanyuan·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.