what is assignment and subletting

What is Assignment of Lease and How It Differs from Subletting

The assignment of lease (and rent) is a foggy topic that is often confused with subletting. Let's clear the air once and all right now. Learn the differences between a lease assignment and sublease so you can make the right choice.

What is Assignment of Lease? - The Important Basics

Let's begin by introducing the 3 players in a lease assignment - The landlord, the original tenant (assignor) and the new tenant (assignee). The original tenant has an unexpired lease agreement with the landlord and he wants out. Since the original tenant can't just break the agreement and walk off, what he does is to get a new tenant to swap places... and take over all his rights and obligations for the remainder of the lease period. So if the original tenant signs a 1 year commercial lease and the business goes bust after 8 months, the new tenant will be assigned a 4-month commercial lease (with the same terms and conditions as the original agreement). Now here's the big catch: Even though the original tenant has handed over all his duties and obligations to the new tenant, he is not off the hook... unless the landlord agrees to release him from all liabilities. If the new tenant stirs up trouble, our dear original tenant will find himself in hot soup as well. Of course, whether the original tenant is allowed to pull this assignment trick out of his hat is a whole new matter. Knowing for sure is actually simpler than most people think: First, examine your local landlord tenant laws for any lease assignment rules. Most of the time, landlords are given the right to allow or disallow assignments but once in a while, the local law let tenants have the final say instead. If there's no mention of lease assignments in your law text, then your rental lease agreement shall dictate the terms.

Difference Between Lease Assignment and Subletting

When it comes to subletting vs assignment of lease, there's often a massive mix-up. Sometimes even real estate professional get it wrong by assuming them to be one and same thing. However if you dig deeper, you will find that the differences are not just numerous, but important as well. Let's begin by dragging the landlord into the picture. An assignment of lease launches the new tenant into a direct relationship with the landlord - The landlord collects rent straight from the new tenant and deals with the new tenant directly on all lease issues. So in this case, the original tenant gets to take back seat and doesn't have to manage the new tenant actively. On the other hand, there's no direct relationship between the landlord and new tenant (subtenant) in a sublease. Instead the original tenant plays mother goose and is responsible for collecting rent from the subtenant and making sure that he's following the lease rules. When you compare the two, a sublease is a lot more hands-on for the original tenant. No matter which path you take, you will still want a good new tenant who pays the rent on time and follows the lease rules to the agreement. For the golden rules on screening tenants and running credit checks, Click here for our guide to running tenant credit checks. When you have a lease assignment, the terms and conditions of the lease remains largely unchanged - It's almost like taking the original lease agreement and swapping the tenant's name with another. With a sublease, there's more breathing space - The original tenant can decide how much rent to charge, how long the subtenant is going to stay or even collect security deposit... as long as it stays within the boundaries drawn by the original lease agreement between the landlord and original tenant.

Should You Choose Assignment of Lease or Sublease?

You are the Landlord - A lease assignment is recommended in most cases. You will have more control over your new tenant (instead of leaving matters in the original tenant's hands and hoping that he would do a good job)... plus you still have the original tenant to cover your back in case anything goes wrong. You are the Original Tenant - Now this is a tricky one. If you want to someone to take over the entire lease and property for its remaining duration (e.g. your business goes belly-up and you no longer need the office), then help yourself to a lease assignment. If the landlord's consent is required for assignment (and he doesn't give the nod), you can always try offering him a lease assignment fee as a deal sweetener. However, if you are looking for someone to share the place (and rent)... or perhaps you need someone to cover the rent while you are overseas for a few short months, then a sublease would be ideal. You are the New Tenant - An assignment of lease works better for you most of the time. You won't be at the mercy of the original tenant (for example if he screws up and the landlord terminates the original lease agreement, your sublease might also go up in flames). But if you only want to rent part of the property... or don't want to tie yourself down for the remaining lease duration, then you are better off sticking to a sublease. Now that we have covered the topic of assignment vs sublease, go ahead and take your pick - Click here for an assignment of lease form or Click here for a sublet agreement instead.

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Assignment vs Subletting - What is the difference?

Assignment vs subletting – what are the differences.

Assigning a residential lease agreement and subletting are two distinct ways of transferring tenancy rights in a rental property, each involving different legal and practical implications. Here’s a breakdown of their differences:

Assignment of a Residential Lease Agreement:

Definition:

Transfer of Responsibility: Assigning a lease involves transfer of the original tenant’s entire interest in the lease to a new tenant. The original tenant ceases to have any rights or obligations related to the property.

Consent from Landlord: Typically requires the landlord's explicit permission or consent. The landlord is often involved in vetting and approving the new tenant.

Replacement Tenant: The original tenant may find a replacement (assignee) who takes over the lease entirely. The landlord may also market for a new tenant and vet any potential replacement tenants.

Legal Responsibility:

Liability: The assignor (original tenant) is usually released from all liabilities and obligations once the lease is assigned to the new tenant.  This may key off of the new tenant taking possession of the rental unit.

Direct Relationship with Landlord: The new tenant (assignee) becomes directly responsible to the landlord for rent payments, property maintenance, and adherence to lease terms by effectively “stepping into the shoes” of the departing tenant.

Implications:

End of Original Tenancy: For the assignor, once the lease is assigned, their association with the property generally ends. They may not have recourse if the assignee defaults on payments or breaches the lease.

Subletting of a Residential Lease Agreement:

Partial Transfer: Subletting occurs when the original tenant rents out all or part of the property to a subtenant while retaining some rights and responsibilities under the original lease.

Consent from Landlord: Usually requires the landlord's permission, as outlined in the lease agreement. Some leases explicitly prohibit subletting.

Ongoing Relationship with Landlord: The original tenant (sublessor) maintains responsibility to the landlord for lease obligations.

Obligations: The sublessor remains responsible for rent payments and adherence to lease terms, acting as an intermediary between the landlord and subtenant.

Relationship with Subtenant: The sublessee has a legal relationship with the sublessor rather than the landlord. The sublessee must adhere to terms agreed upon in the sublease.

Ongoing Responsibility: The original tenant (sublessor) remains liable to the landlord for the property and its condition. They're responsible for any damages or lease violations caused by the sublessee.

Continued Tenancy: The original tenant maintains an ongoing relationship with the property and the landlord.

How Much Would Your Home Rent For?

Key Differences: 

• Transfer of Responsibility:  Assigning a lease completely transfers the tenant's interest to a new tenant, while subletting involves the original tenant retaining some rights and responsibilities.
• Direct Relationship : In assignment, the new tenant has a direct relationship with the landlord, whereas in subletting, the original tenant maintains this relationship. 
• Liability and Obligations:  Assigning a lease typically releases the original tenant from obligations, while subletting keeps them responsible for the property.

Both assignment and subletting can offer flexibility to tenants but come with distinct legal and practical implications that tenants and landlords should carefully consider before proceeding. Understanding these differences helps individuals choose the appropriate option based on their circumstances and lease agreement terms.

In most cases, assignment is the best course as it avoids the main pitfall of subletting, namely that the subletting tenant has no direct relationship or responsibility to the landlord/owner of the rental unit.  For that reason, professional property managers normally recommend termination of the original lease and negotiation of a new lease with the replacement tenant.  The outgoing tenant will normally absorb some of the costs associated with securing a replacement and the property manager makes sure the turnover is handled property.  Having experience when these issues arise is important to protect the landlord’s interests.  If you need management of an investment property, call one of our managers today to learn why so many landlords believe TREG is the RIGHT CHOICE for property management.

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How Does Subleasing Work? How to Sublet and Not Get Burned

Also known as a subletting, this arrangement allows someone to rent a home from someone else who is already  renting the property. It can be a lifesaver for both tenants seeking short-term digs, as well as those who must vacate their apartment (temporarily or permanently) before their lease is up. Solution: subletting!

Let’s say, for instance, you have a one-year lease, but you get a job offer in another city six months into your lease. You could break your lease—that is, if your landlord allows it—or you could find someone to rent your apartment from you, and you become  this person’s  landlord (technically sublandlord).

Although arranging to sublet might seem like an easy way to get out of a lease on short notice, it could leave you on shaky legal ground if you don’t handle subletting appropriately. Read on to find out more about the pros and pitfalls of this practice and how to protect yourself.

Sublease vs. rental: What’s the difference?

Setting up a sublease is different from traditional renting because it adds another layer to the tenant-landlord relationship. If you rent a home, you rent from the property owner. You typically pay a security deposit, sign a lease, and pay your rent directly to the property owner or the property’s representatives.

A sublet situation is more like a sandwich. If you rent a home from the property owner and then sublet it to someone else, you’re in the middle between your subtenant and your landlord.

What are the benefits of subletting a house?

• Not having to break your lease.  Breaking an apartment lease can be an expensive proposition. You may have to pay a hefty fee or continue paying rent until your landlord finds another renter, which is expensive and frustrating.
• Not paying for an empty apartment.  It seems silly to pay rent on an apartment that’s not occupied. Finding a subtenant allows you to recoup at least some of your costs.
• Having a built-in house sitter.  If you find a trustworthy subtenant, you can leave your furnishings behind, knowing that someone’s there to keep an eye on things and deal with property-related emergencies.

What are the drawbacks to a sublease agreement?

It comes down to one word: liability.

“As a landlord, you’re not crazy about the idea of a subtenant, because you have someone in between you and the person who’s occupying your space,” says  William C. Vogel , president of Vogel Advisors, in Royal Oak, MI. “As a tenant, you’re still liable for the lease. If the subtenant doesn’t pay, you still have to make the payment.”

Liability issues go beyond monthly payments, though. Leases also typically address the overall condition of the apartment or property you’re leasing.

“The obligation is that you’re going to get the house, or the apartment, back in the same or better condition than you found it, and the risk is really significant with the wrong subtenant,” says Vogel.

If your subtenant trashes the kitchen or forgets to maintain the pool, it could cause thousands of dollars in property damage. Who’s on the hook for that? Often it’s the person in the middle.

Alternatives to sublets

Before you sublease your apartment, Vogel recommends you try a couple of alternatives. The first option is to find a new tenant to present to your landlord. This may work better if you’re renting from a property owner instead of an apartment management company, but it can’t hurt to try in either scenario.

Essentially, you find a new tenant who is willing to sign a brand-new lease. The tenant should meet your landlord’s requirements in terms of credit and rental history. Ideally the landlord says yes, and you’re released from your lease (and potential liability).

Another option is to find someone who is willing to finish your lease. You have six months left, and the new tenant is willing to sign the lease for six months. Note: Such an agreement doesn’t automatically relieve you of liability. Vogel recommends including language in the assignment that specifically relieves you of liability.

If those options don’t work, though, subletting may be your best alternative.

How to protect yourself when subletting

Brian Davis , director of education for Spark Rental in Baltimore, recommends starting by reviewing your lease.

“Some leases include a clause prohibiting a sublease, and others have a clause requiring the landlord’s written approval before the tenant can sublet,” Davis says. Even if your lease prohibits this practice, though, Davis still recommends asking your landlord.

“Most landlords are amenable, on the condition that the sublessee qualifies just like any other tenant,” he says.

If your landlord won’t budge, you can check out your local laws about subletting. Some states and cities have laws that state landlords can’t prevent subletting to qualified renters.

If your landlord is on board, there are some additional steps you should take to protect yourself:

• Screen your subtenant.  Don’t just take the word of a friend or relative on this person being wonderful. Check references. Run a background check. Do your due diligence to ensure you have someone who is responsible and financially stable.
• Sign a subletting agreement.  There are sample agreements online, or you could consult with a lawyer. Your subletting agreement should clearly spell out how long you’re subletting the space, how much rent is, when rent is due, and how the property should be maintained.
• Get a security deposit.  A security deposit can help cover any damage that occurs while someone else is occupying the space.

Subletting isn’t perfect, but if you get everything in writing and look for a responsible tenant, it could free you up to pursue other opportunities.

Melinda Sineriz is a writer living in Bakersfield, CA. She writes about personal finance and real estate for several websites and businesses.

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• Handling Subleases and Assignments as a Landlord

After you have completed the often long process of screening and moving in a new tenant, sometimes tenants inform you that they wish to end their lease early, typically due to reasons such as a job change or moving in with a significant other. This can be disheartening when you have put in the work to get the vacancy filled, and it may be tempting to minimize the additional work you may have to do to get the unit rented again by agreeing to a tenant’s proposal to sublease or assign their tenancy to a new person of their choosing. While there can be benefits to subleases and assignments, and in some places you cannot outright ban or unreasonably refuse a sublease, there are some pitfalls to be aware of with both options, as well as an alternative that may be preferable. It has also become increasingly popular for tenants to use their units for short-term vacation rentals, a practice which additionally carries a number of downsides for landlords.

When a tenant wants to leave their lease early or temporarily, and proposes to have a substitute tenant of their choosing live in the rental in their place and pay rent to the original tenant, this is called a sublease. For example, your original tenant may be a college student who plans to study abroad for a semester, but wishes to return after that. Another example may be if the original tenant wishes to rent out part of the unit, perhaps just one bedroom, in order to help them cover their expenses. In order to give you more control of these situations should they arise, it is best to have a clause in your lease specifying whether subleases are allowed, and if so, setting forth a requirement for the tenant to obtain your written permission or meet other criteria before subleasing the rental. Be sure to check state and local law regarding subleases, as some jurisdictions do not allow you to unreasonably deny requests to sublease, even if your individual lease does not permit them. It is also wise to require a subtenant to undergo the same screening process as the original tenant with regard to credit history, income, and other factors, but as always you should not make your decisions based on discriminatory factors.

Landlords should thoroughly screen potential subtenants and assignees even if the time left on a lease or periodic rental agreement is short. A bad subtenant or assignee can wreak a lot of havoc in a short amount of time or even refuse to leave once the lease or rental agreement is up.

The primary advantage of allowing a sublease is that you will presumably have an uninterrupted stream of income for the rental unit, which won’t sit vacant while you find a new tenant. Especially if the sublease request has come from a good and trustworthy long term tenant, then it may be worthwhile to grant the request and trust their judgment regarding who the subtenant is, subject to meeting your screening requirements. Your original tenant will also remain responsible for any failure to pay rent during the subtenancy, as well as any damage to the property. The downsides of allowing a sublease include that because the original tenant, rather than you, will be the subtenant’s landlord, it may be difficult to enforce the terms of the lease in the event of any violations. The subtenant may also refuse to leave at the agreed-upon time, potentially making it necessary for you to evict both them and the original tenant.

Assignments

An assignment is similar to a sublease in that it involves someone new taking the place of the original tenant, but the original tenant in these cases does not intend to return. The assignee assumes the legal place of the original tenant in the lease, meaning that they are renting from you rather than the original tenant. This means that the assignee is typically responsible for all of the original tenant’s general obligations under the lease, which allows you to pursue legal action against them in the event of a violation. Further, if the assignee fails to pay rent , you can actually pursue payment from the original tenant. Therefore, an assignment allows you the advantage of an uninterrupted supply of income for the unit without requiring you to do as much work to find a new tenant, and permits you to hold the original tenant responsible if the assignee does not follow through on their obligation to pay rent.

• The original tenant remains liable for the rent (the subtenant is liable to the original tenant)
• The original tenant remains liable for lease violations
• The landlord must evict the original tenant in order to evict the subtenant

Assignment:

• The assignee becomes liable for the rent, and the original tenant is only liable if the assignee does not pay
• The assignee becomes liable for lease violations
• The assignee can be evicted for any reason for which the original tenant could have been evicted

Creating a New Tenancy

While allowing a sublease or assignment may be advisable in some situations, in many cases the best and simplest option is to terminate the original tenant’s lease in writing and begin a new lease with the new tenant. This may still allow you to take advantage of the original tenant’s legwork in identifying a replacement tenant provided that the new tenant meets your requirements, but gives all the parties the added benefit of clarity when it comes to the legal relationship between you and the new tenant, especially if things go awry after they move in.

Short-Term Rentals

Particularly in competitive rental markets and large cities, tenants are turning to short-term rental services like Airbnb to rent out the units they themselves rent, and make a profit by collecting a fee from their guests. Many landlords disfavor this practice due to the increased wear and tear on the rental, people they haven’t screened using their property, and possible liability issues, among other things. Further, a number of cities have begun to highly regulate if not outright prohibit short-term vacation rentals of this nature. If you do not wish to allow tenants to host short-term vacation renters, once you have checked your local laws on the topic, it is best to clearly prohibit this practice in your written lease or rental agreement, and distinguish this type of rental from more standard subleases.

Last reviewed October 2023

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Ryan Rauner's Real Estate Blog

The abcs of cre.

Assignment vs. Subletting: What’s the Difference?

According to the Bureau of Labor Statistics, 20% of small businesses fail in their first year, 30% fail in their second year, 50% fail after five years, and 70% of small business owners fail in their 10th year in business. Yikes! Despite these grim statistics, commercial leases are generally a minimum of 5 years and contain severe, default penalties. In some cases, landlords will require the tenant to personally guarantee the lease, effectively using the tenant’s personal assets, i.e. home, as collateral to secure the lease.

Most tenants understand the implications of defaulting on their lease and enter into the agreement, eyes-open, and with every intention of abiding by the terms and conditions. The road to hell (and default) are paved with good intentions. Economic downturns, lost contracts/clients, sequestration, etc. can disrupt even the best laid plans; leaving tenants struggling or unable to meet their monetary obligations under their lease. In such cases, tenants’ most powerful tool/strategy to avoid default is to sublease or assign their lease.

Most, if not all, commercial leases contain Assignment and Sublease provisions and while the specific language and conditions can vary there are general, shared principles. Subletting and assigning are similar in that they both involve a transfer of the tenant’s right or interest in the lease that allow another (3 rd ) party to occupy the leased premises. Under the terms of most lease agreements the original tenant will remain responsible for the terms of the lease in the case of either a sublease or an assignment. This means that the landlord can proceed against the tenant in the case of a default by the subtenant or assignee; including but not limited to, rental payments, damage to the leased premises, etc. As a result, it is in both the tenant and landlord’s interest to carefully vet the proposed subtenant or assignee.

If subleases and assignments are similar in that they essentially allow the tenant to “rent out” their space to a 3 rd party, what’s the difference ?

Under a sublease, the tenant is either (sub)leasing a portion of the leased premises for the remainder of the lease term, all of the leased premises for a portion of the lease term, or a portion of the leased premises for a portion of the lease term. Subleases do not necessarily indicate financial hardship on behalf of the tenant or a likelihood of default. In fact, in some cases, companies may choose to lease more space than needed upon the lease commencement date in order to reserve the space for future growth. This is more common with large companies, i.e. Google, that can afford the lease payments but may seek to reduce expenses by subleasing the unused space. Another situation in which a tenant may request to sublease their space is in the case of a downsizing, consolidation, etc. where the they no longer need their entire space but do not want to move and can offset their rental obligations by renting the unused portion to another party.

Under a lease assignment, the tenant transfers all of its rights and responsibilities under the lease to the assignee along with its right to occupy the entire leased premises for the remainder of the lease term. A lease assignment is a much more serious request on behalf of the tenant than a request to sublease the space. While not always the case, a request to assign the lease may indicate that the tenant is unable or unwilling to continue to make lease payments and is likely to default on its lease then or at some point in the future. As stated earlier, most leases require the original tenant to remain liable for the lease (payments, responsibilities, etc.); however, with lease assignments the landlord may release the tenant and enter into a direct relationship with the assignee. The landlord’s decision will be based on a number of factors, most notably the financial strength of the assignee and the difference between the contract rent and market rents. Assignments are not necessarily indicative of financial trouble and can simply be the result of tenants relocating or consolidating; resulting in them no longer needing the leased premises.

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What is the Difference Between an Assignment and a Sublease?

by Pam Pester | Sep 17, 2019

Commercial real estate clients frequently ask how an assignment of a lease differs from a sublease.  The difference is primarily a legal one, although each achieves a similar practical result.

Assignment .  An assignment of a real estate lease is a complete transfer of the right to be the tenant under the lease.  The third-party assignee becomes the “tenant” under the lease, taking over all of the leased premises, and is substituted for the old tenant. The new commerial real estate tenant pays the rent required under the lease directly to the landlord and is treated as the tenant under the lease for all purposes.  However, the catch is that the assignor tenant, unless released from liability by the landlord, remains liable for the obligations under the lease if the new tenant defaults. The old tenant can be sued by the landlord for back rent and other obligations imposed by the lease if the new tenant fails to pay or perform as required by the lease.  Given that a commercial real estate tenant who assigns a lease remains liable for the default of the new tenant, tenants should try to negotiate an automatic release provision.  Unfortunately, many landlords are unwilling to make this concession. An alternative strategy is to ask the landlord for a release if the proposed new tenant is of similar financial strength and creditworthiness.

Sublease. A sublease is a new lease agreement between the real estate tenant as sublessor and a third party as sublessee for all or a portion of the leased premises. The original commercial real estate lease between the tenant and the landlord remains in place, unaffected by the sublease. This means that the tenant remains liable for monthly rent under the original lease, while collecting rent from the subtenant under the sublease, which may be more, less or the same as the rent due under the main lease.

A sublease can be for less than all of the leased premises, while an assignment that transfers the entire lease must be for all of the premises. A sublease is a more involved transaction, as it requires a full sublease document between the commercial tenant as sublessor and the sublessee.

Reasonable Consent .  The landlord must be reasonable in consenting to the proposed assignment or sublease. Under Florida law a landlord cannot be unreasonable or arbitrary in withholding consent to an assignment or sublease. Nonetheless, it is still better to state in the text of the lease that the landlord will be reasonable.

In drafting an assignment or sublease clause, the tenant’s goal is flexibility. Being able to assign or sublet excess space with minimal interference from the landlord and minimal liability in the event the new tenant defaults can be a tremendous benefit to the tenant as the business climate changes from year to year.

When you need assistance with your commercial  lease in Tampa, FL and surrounding areas contact Pam Pester, Owner and President of Mobiliti CRE.  Mobiliti CRE is an independently owned commercial real estate company specializing in exclusive tenant and buyer representation.

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What’s the difference between a sublet and an assignment?

With both a sublet and a lease assignment, the departing tenant remains responsible for the rent unless a landlord explicitly releases you. 

When Ismail Mustafa, a tenant in Dumbo, wanted to break his lease recently, the landlord gave him three options: He could arrange a sublet, transfer the lease to someone else, or end the lease by paying two months of rent upfront.

There’s obviously a financial cost to paying two months rent as a penalty for breaking your lease but it is also the most clear-cut break with your landlord. If you're considering the same options as Mustafa, it's important to know the difference between transferring your lease to someone else (also known as an assignment) and subletting. Neither are without risk.

"The bottom line is—none of the options is perfect—each has advantages and disadvantages," says  attorney Steven Kirkpatrick, a partner at the law firm  Romer Debbas.

It's worth pointing out that a fourth option might be  offered to you: To move out and pay rent until the landlord finds a tenant. This is highly "problematic," says  Catherine Grad, a tenant attorney with her own practice.  "You no longer have control over the process and you are still on the hook for the rent and you’ve given the power to someone who’s incentive is less than yours." 

Subletting vs. assignment

When you sublet your place it's typically because you intend to return to the apartment. A sublet will usually end a week—but it could be just a day—before the actual end of your original lease.

Subletting for the entire length of the lease is an assignment. An assignment allows you to hand off the rental to a new tenant for the rest of the lease term. This is what Mustafa ended up doing.  What's important is that either way—with both a sublet and an assignment—you are giving up your rights to the rental  but in both scenarios you are often still liable if there is damage to the apartment or the next tenant fails to pay. The risks are "tremendous," Grad says. 

When you assign a lease, the person you are assigning to would pay the landlord directly and deal with the landlord for repairs. 

If you are subletting you stand in the shoes of the landlord. The subtenant pays you the rent and you then pay the landlord. "If there are problems in the apartment, it is your duty to get it fixed," Grad says. This is the case, even if you are not authorized to make the repairs.  So while a sublet and an assignment are technically different, in terms of the risk for the departing tenant, Grad  says,  "it is the same." 

"The fact that you assign your rights does not eliminate your obligation to pay," Kirkpatrick  says.

The only situation in which you wouldn't be responsible for the apartment in any way is if you were released by the landlord from your original lease in writing. In practical terms, Grad says, "y ou will never get that with a sublease but might get it for an assignment. The landlord has no incentive to give that to you. Why not have two people on the hook—both you and assignee?" she asks.

A payment or additional security might be the incentive a landlord needs to release you. Security deposits are capped at one months rent making this type of payment "problematic," says Kirkpatrick but he adds there might be ways to structure it as a quid pro quo to release you of liability.  

Negotiations around lease breaks

A landlord cannot unreasonably deny your request to sublet or assign a lease in a residential situation.  If your landlord isn’t responding to your request to assign the lease, that silence becomes default consent within 30 days of you alerting them or of them receiving any additional information about the arrangement. If a landlord's refusal to assign is unreasonable, that terminates your lease.

If the refusal is unreasonable for a sublet, you aren't released from the lease but you are able to sublet the apartment and can fight it out in court. 

Grad says seeking to sublet or to assign your lease often leads to discussions about lease termination. Landlords know they cannot unreasonably deny your request but they also entered an agreement with you and want you to pay up. Yes, the  landlord has a duty to mitigate—which means they must do all they can to find a replacement tenant if you want to break your lease—but as Grad points out, this benefit isn't a given. 

"You have to fight for it—that's the nature of legal rights. It  doesn’t mean you have a right to break your lease, it just gives you a defense when you get sued for all the rent," she says. 

Insurance considerations

Without release from your own lease you will want to set up a separate agreement with the incoming tenant. Kirkpatrick advises having an indemnification agreement although points out that for practical purposes if the person stops paying the rent, there are no guarantees they will still be able to pay you. "If it were me, I’d want a guarantor," Kirkpatrick says. 

To protect yourself, run a credit report on a prospective subtenant or assignee. Phil Horigan, founder of  Leasebreak,  a website where you can find renters to take over an unwanted lease tells Brick, "in most cases I have heard where a tenant has gotten burned by a sublet, the tenant did not run credit."

You also need to make sure the subtenant or assignee has apartment insurance and that you too have apartment insurance, Grad says. If your landlord has not released you from the lease you remain liable if the tenant, for example, floods the apartment below or there's a fire in the place. 

You also want your tenant to know you are not covering their contents or liability. Jeffrey Schneider, president of Gotham Brokerage (a Brick Underground sponsor) says, "there are various ways to cover this, depending on whether you are an owner or former tenant."

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Emily Myers

Emily Myers is a senior writer, podcast host, and producer at Brick Underground. She writes about issues ranging from market analysis and tenants' rights to the intricacies of buying and selling condos and co-ops. As host of the Brick Underground podcast,  she has earned four silver awards from the National Association of Real Estate Editors.

• What is RE Optimization

Apr 07, 2021

The differences between assignment and sublease.

By Don Catalano

An assignment is the transfer of the commercial tenant’s entire responsibilities in a lease. When a corporate tenant assigns its lease, the assignee takes over the tenant’s responsibilities under the lease and communicates directly with the landlord.

When a tenant decides to assign a lease, all his rights and responsibilities in the original lease agreement are released to the third-party assignee. Hence, the original tenant (the "assignor") will have to leave the unit and allow the new tenant to take over all of the leased building.

It is important to check the clauses in the original lease agreement before committing an assignment arrangement. In some leases, the original tenant will remain responsible for the terms of the lease, especially if the new tenant defaults on the lease agreement or causes damage to the property. You may want to check your lease agreement for the option to pursue a permanent assignment so you won't be responsible for expenses or damages.

When a corporate tenant subleases an office , the tenant is transferring all or a portion of the premises for less than the entire term of the lease. Subletting is when a corporate tenant gives another tenant the right to occupy a portion of the entire rental unit for a specific period.

Corporate tenants often sublease when market rents have fallen and parties needing space typically sublease to get space already built-out at a much lower rate than they could as a direct tenant.

Do Both Options Need a Landlord’s Consent?

Both subletting and assigning a commercial lease require the permission of the landlord or a representing agent; this is often expressly indicated in the lease agreement itself. Although most state laws prohibit landlords from withholding consent unreasonably. If the landlord objects to the sublet or assignment, then they must do so on reasonable grounds.

In the case of assignment, a vetting procedure which usually includes credit checks may be completed before formalizing the arrangement with the associated documentation.

Is Subletting or Assignment Right For My Company?

Whether to sublet your commercial property or assign a commercial lease depends entirely on your business situation. By subletting unused space, tenants can recover vital running costs and even improve the viability of their own business. Also, the original tenant remains the tenant and is responsible for all clauses in the original lease.

Assigning your commercial lease to a third party is a good option if you want to terminate your tenancy before the end of your agreement and vacate the premises completely. This is often a good idea if you are planning to sell or relocate your business . With an assignment, you will be absolved of all responsibilities as the original tenant from the date of assignment.

Here are a few other articles to check out:

8 working from home tips you should know, 4 site selection tips when looking for office space, 5 tips when moving your office from big cities to the suburbs, subscribe for more great cre tips hbspt.cta._relativeurls=true;hbspt.cta.load(121314, 'cd3ad71f-75e1-4533-9c5a-8e82767e7aba', {"usenewloader":"true","region":"na1"});.

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What is subletting and how does it differ from subleasing.

Subleasing and subletting are two terms that are often used interchangeably in the world of renting, but they actually have different meanings. In this article, we’ll explore the differences between subleasing and subletting and help you understand which option may be right for you.

What is subleasing?

Subleasing occurs when a tenant who is currently renting a property from a landlord decides to rent out the property to another person, known as the subtenant. The subtenant pays rent to the original tenant, who in turn pays rent to the landlord. The original tenant is still responsible for the terms of their lease with the landlord, including paying rent and maintaining the property.

What is subletting?

Subletting is similar to subleasing in that it involves a tenant renting out a property to another person. However, there is one key difference: the tenant who is subletting the property is not responsible for the terms of their lease with the landlord. Instead, the subtenant enters into a new lease agreement directly with the landlord. Let’s get the basics out of the way. Put simply, to sublet means to rent out the room or apartment that you’re currently renting to another person. That person (the sublessee) essentially takes over the remainder of your lease and agrees to pay you (the sublettor)  for all bills and payments moving forward. To sublet can also mean that you personally rent out someone else’s room, but we’re going to walk you through what it means to sublet your own room or apartment.

Let’s say you’ve signed a 1-year lease and, with 6 months left, suddenly find that you need to move out of the state or to a new city for a job or personal reasons. Breaking your lease is one option, but it can be costly for myriad reasons. That’s where subletting comes in. Renting your apartment to someone else for those 6 months is a great alternative and one that can save you a bundle of money. 

Which option is right for you?

eciding whether to sublease or sublet a property depends on your specific circumstances. If you’re a tenant who needs to leave your rental property temporarily but plans to return, subleasing may be the best option for you. This allows you to keep your lease with the landlord while still offsetting the cost of rent. However, it’s important to note that subleasing may not be allowed under your lease agreement, so it’s essential to review your contract carefully.

If you’re a landlord and your tenant wants to sublease, it’s important to review your lease agreement to determine whether subleasing is permitted. You may also want to consider requiring the subtenant to submit a rental application and undergo a background check to ensure they’re a reliable tenant.

On the other hand, if you’re a tenant who needs to leave your rental property permanently, subletting may be a better option. This allows you to transfer your lease to the subtenant and remove yourself from any obligations to the landlord.

5 steps to sublet or sublease your apartment

If you’re considering subletting or subleasing your apartment, here are five steps you should take:

The first step is to review your lease agreement to determine whether subletting or subleasing is allowed. Some landlords do not allow either option, while others may require written permission before you can proceed.

Once you have permission to sublet or sublease, the next step is to find a subtenant. You can advertise your apartment on various platforms, such as social media, online classifieds, and word-of-mouth.

Before choosing a subtenant, it’s essential to screen potential candidates. Interview all candidates and get a feel for who they are. You may even want to ask for references or proof of employment if entering into a subleasing agreement where you are still responsible for the rent payments to the landlord.

Once you’ve found a suitable subtenant, it’s time to sign a sublet/sublease agreement. This document should outline the terms of the agreement , including the rent amount, the duration of the sublet/sublease, and any other conditions.

Finally, it’s important to notify your landlord about the sublet/sublease agreement. You should provide them with a copy of the signed agreement and ensure that the subtenant is aware of their responsibilities under the lease agreement.

By following these five steps, you can sublet or sublease your apartment in a legal and responsible manner. Remember to always review your lease agreement carefully and seek permission from your landlord before proceeding with either option.

Before you go

Once you and the sublessee have agreed to the conditions of your sublet, here are a few things to remember to do before your move.

• Choose a move-in/move-out date that works for both of you
• Make a copy of your key or give your own to your sublessee
• Determine how you will receive payment for rent and utilities (Venmo, Apple Pay, etc.)

Frequently asked questions

Subletting involves renting out your apartment to someone else for a period of time while you are still responsible for the lease. Subleasing is similar, but you transfer the lease to the subtenant for the duration of their stay.

No, you should always seek permission from your landlord before subletting or subleasing your apartment. Failure to do so can result in legal action and even eviction.

It’s important to screen potential subtenants by checking their credit history, rental history, employment status, and conducting a background check to ensure they have no criminal history.

The agreement should include the rent amount, the duration of the sublet/sublease, and any other conditions. It should also outline the responsibilities of the subtenant, including their obligation to adhere to the terms of the original lease agreement.

It depends on the terms of your lease agreement and local rental laws. In some cases, you may be able to charge more than you pay for rent, but in other cases, you may not be allowed to charge more than the original rent amount.

If the subtenant damages the apartment, you may be held responsible and could face legal action. It’s important to include provisions in the sublet/sublease agreement that outline the responsibilities of the subtenant in maintaining and repairing the apartment.

It depends on the terms of the sublet/sublease agreement. In most cases, you will need to provide written notice to the subtenant and seek their agreement to end the agreement early. You may also be required to pay any fees or penalties outlined in the original lease agreement.

If your landlord denies your request to sublet or sublease, you may need to seek legal advice or negotiate with your landlord to reach a compromise. It’s important to remember that you are legally bound by the terms of your lease agreement and may face consequences for violating these terms.

Final thoughts

Subleasing and subletting are two options for tenants who need to rent out their rental property to another person. Understanding the differences between these two options can help you make an informed decision about which option is right for you. Remember to review your lease agreement carefully before deciding to sublease or sublet and consider working with a professional property management company to ensure a smooth rental process.

Make sure you have your new place lined up before moving to your new city. Search thousand s of apartments for rent on Zumper and get ready for your next move.

Julie is an avid sports enthusiast, beer drinker, city runner, and non-fiction reader. She's been a renter for 10 years, and has learned a thing or two in the process.

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What Is the Difference Between Subletting and Assigning Your Lease?

By Sarah Roberts Head of Client Success

Updated on September 1, 2020 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

Why Would I Need to Assign or Sublet?

• What is an Assignment? 
• What is Subletting? 
• How Do I Assign or Sublet? 
• Which Option is Best for Me? 

Assigning and Subletting Retail Premises

Key takeaways.

If you are looking to exit your lease before the date set out in the lease agreement, it is important to understand the options available. Understanding the difference between subletting and assigning the lease is important because it can have an ongoing impact on your obligations to the landlord. This article will outline the differences between subletting and assigning your lease.

There are a number of reasons you may want to assign or sublet your lease. This includes because you are:

• selling your business; 
• needing to move to a new premises; 
• winding down your business; or 
• looking for extra revenue through a sublease. 

What is an Assignment? 

An assignment of lease usually occurs when you want to assign your interest in the lease to another party – the assignee. 

For example, this could mean assigning the whole of the shop or leased space.

When you assign your lease, you are transferring your entire proprietary interest to the assignee. Once the lease is properly assigned, the assignee will assume your obligations under the lease, and you should be released from these obligations.

What is Subletting? 

Subletting occurs when you transfer  part  of your interest in the property to another party. This party is known as the ‘sub-tenant’. Here, you can sublease part of the property, like a room or section of the tenancy. This means you do not have to give up the entire property. Alternatively, you can sublet the entire premises for a fixed period of time within the lease period.

Usually, the sub-tenant will pay you rent under a sublease agreement and treat you as their landlord. As the head-tenant, you will assume liability on behalf of the subtenant for any damage or loss that may occur.

It is important to understand that a sublease does not release you from your obligations under the lease. You still retain your lease with the landlord, irrespective of any issues that may arise with the sublease.

How Do I Assign or Sublet? 

The process for assigning or subletting your lease should be set out in your lease agreement. Unless otherwise stated, you will need the written consent of the landlord before you can assign or sublet your lease.

In the case of an assignment, the landlord usually has the right to approve the new assignee. The landlord is likely to request information such as:

• financial statements;
• a CV or business history; and
• identity documents of the proposed assignee.

This way, they can determine whether or not they think they will be suitable to maintain the lease.

In both cases, it is a good idea to have either a:

• deed of consent and assignment; or 
• deed of consent to sublease and a sublease drafted.

Ensuring that the terms of the sublease or assignment are in writing can be key in ensuring your lease is properly assigned or subleased. 

Which Option is Best for Me? 

Your reason for needing to assign or sublet will determine what the best option for you is. Assignment is best when you want to completely release yourself from your obligations under the lease. Conversely, subleases are more suitable when you still want to retain your interest in the property or are unable to assign. 

Subleasing can be an effective way of managing some changes in business needs and may be the best option for you if you want to temporarily vacate your premises or are looking to downsize. Subleasing can also be a good option for businesses seeking to earn extra revenue, or for growing businesses leasing premises larger than what they currently need.

If your premises are considered retail premises, the relevant retail leases legislation in your state likely governs the conditions of your assignment or sublease. This is likely to include laws:

• stipulating what is required to gain the landlord’s consent;
• preventing landlord’s from unreasonably withholding consent; and 
• outlining what happens if the landlord fails to respond to a request for consent.

It is important to understand the difference between assigning and subletting a lease, so you can choose the best option for your business.

The key differences are that:

• assignments transfer your entire interest in the property and usually releases you from your obligations;
• subleases do not release you from your obligations and allow you to transfer part of your interest in the property and retain your entire interest;
• in both cases, your lease will set out when and how you can assign or sublet. 

If you need assistance with assigning or subletting your lease, contact  LegalVision’s leasing lawyers  on 1300 544 755 or fill out the form on this page. 

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Assignment of Lease

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What is an assignment of lease.

The assignment of lease is a title document that transfers all rights possessed by a lessee or tenant to a property to another party. The assignee takes the assignor’s place in the landlord-tenant relationship.

You can view an example of a lease assignment here .

How Lease Assignment Works

In cases where a tenant wants to or needs to get out of their lease before it expires, lease assignment provides a legal option to assign or transfer rights of the lease to someone else. For instance, if in a commercial lease a business leases a place for 12 months but the business moves or shuts down after 10 months, the person can transfer the lease to someone else through an assignment of the lease. In this case, they will not have to pay rent for the last two months as the new assigned tenant will be responsible for that.

However, before the original tenant can be released of any responsibilities associated with the lease, other requirements need to be satisfied. The landlord needs to consent to the lease transfer through a “License to Assign” document. It is crucial to complete this document before moving on to the assignment of lease as the landlord may refuse to approve the assignment.

Difference Between Assignment of Lease and Subletting

A transfer of the remaining interest in a lease, also known as assignment, is possible when implied rights to assign exist. Some leases do not allow assignment or sharing of possessions or property under a lease. An assignment ensures the complete transfer of the rights to the property from one tenant to another.

The assignor is no longer responsible for rent or utilities and other costs that they might have had under the lease. Here, the assignee becomes the tenant and takes over all responsibilities such as rent. However, unless the assignee is released of all liabilities by the landlord, they remain responsible if the new tenant defaults.

A sublease is a new lease agreement between the tenant (or the sublessor) and a third-party (or the sublessee) for a portion of the lease. The original lease agreement between the landlord and the sublessor (or original tenant) still remains in place. The original tenant still remains responsible for all duties set under the lease.

Here are some key differences between subletting and assigning a lease:

• Under a sublease, the original lease agreement still remains in place.
• The original tenant retains all responsibilities under a sublease agreement.
• A sublease can be for less than all of the property, such as for a room, general area, portion of the leased premises, etc.
• Subleasing can be for a portion of the lease term. For instance, a tenant can sublease the property for a month and then retain it after the third-party completes their month-long sublet.
• Since the sublease agreement is between the tenant and the third-party, rent is often negotiable, based on the term of the sublease and other circumstances.
• The third-party in a sublease agreement does not have a direct relationship with the landlord.
• The subtenant will need to seek consent of both the tenant and the landlord to make any repairs or changes to the property during their sublease.

Here is more on an assignment of lease here .

Parties Involved in Lease Assignment

There are three parties involved in a lease assignment – the landlord or owner of the property, the assignor and the assignee. The original lease agreement is between the landlord and the tenant, or the assignor. The lease agreement outlines the duties and responsibilities of both parties when it comes to renting the property. Now, when the tenant decides to assign the lease to a third-party, the third-party is known as the assignee. The assignee takes on the responsibilities laid under the original lease agreement between the assignor and the landlord. The landlord must consent to the assignment of the lease prior to the assignment.

For example, Jake is renting a commercial property for his business from Paul for two years beginning January 2013 up until January 2015. In January 2014, Jake suffers a financial crisis and has to close down his business to move to a different city. Jake doesn’t want to continue paying rent on the property as he will not be using it for a year left of the lease. Jake’s friend, John would soon be turning his digital business into a brick-and-mortar store. John has been looking for a space to kick start his venture. Jake can assign his space for the rest of the lease term to John through an assignment of lease. Jake will need to seek the approval of his landlord and then begin the assignment process. Here, Jake will be the assignor who transfers all his lease related duties and responsibilities to John, who will be the assignee.

You can read more on lease agreements here .

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Assignment of Lease From Seller to Buyer

In case of a residential property, a landlord can assign his leases to the new buyer of the building. The landlord will assign the right to collect rent to the buyer. This will allow the buyer to collect any and all rent from existing tenants in that property. This assignment can also include the assignment of security deposits, if the parties agree to it. This type of assignment provides protection to the buyer so they can collect rent on the property.

The assignment of a lease from the seller to a buyer also requires that all tenants are made aware of the sale of the property. The buyer-seller should give proper notice to the tenants along with a notice of assignment of lease signed by both the buyer and the seller. Tenants should also be informed about the contact information of the new landlord and the payment methods to be used to pay rent to the new landlord.

You can read more on buyer-seller lease assignments here .

Get Help with an Assignment of Lease

Do you have any questions about a lease assignment and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from real estate lawyers who specialize in lease assignment.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Corporate Attorney that represents startups, businesses, investors, VC/PE doing business throughout the country. Representing in a range of matters from formation to regulatory compliance to financings to exit. Have a practice that represents both domestic and foreign startups, businesses, and entrepreneurs. Along with VC, Private Equity, and investors.

Attorney Skelly is a midwestern transplant from Iowa. She has been in Florida for the past 11 years. She went to undergrad at Buena Vista University, which is a small liberal arts college in Storm Lake, Iowa. After graduating with her Bachelor's degree in criminal justice, she went on to obtain her Master's degree in criminal justice from Kaplan university, which is now Purdue Global. While attending school full time for her Master’s degree, Attorney Skelly worked full time in social services helping children and their families who were involved in the dependency system. Attorney Skelly has a professional background in child welfare and social services having worked for 18 years in the field. Attorney Skelly always had a lifelong dream of becoming a lawyer and decided to fulfill her goal in May of 2019 by starting law school at Western Michigan University Thomas M. Cooley Law School at their Riverview campus. She did their accelerated program and completed law school in just over two years and graduated magna cum laude with honors. Attorney Skelly also received certificate of merit awards, which means attaining the highest grade in the class in secured transactions, research and writing, and family violence practice. While in law school Attorney Skelly was a teaching assistant to two tenured professors as well as a note taker for those students who had accommodations. She was also awarded the Alumni Association’s Distinguished Student Award. In her legal career, Attorney Skelly started out at the State Attorney’s Office in Fort Myers, FL. She helped prosecute several cases and personally worked as second chair on 9 jury trials and one bench trial. Once Attorney Skelly passed the bar, she worked for a family law firm under a board certified marital and family law practitioner where she gained tremendous knowledge in the area of family law which includes divorce, paternity, child custody/parenting plans, alimony and child support as well as domestic relations issues such as domestic violence injunctions. Attorney Skelly is also certified as a Guardian ad Litem and can serve as a Guardian ad Litem in family court cases. Attorney Skelly is a proud member of the Florida Bar, the Lee County Bar Association, and the American Bar Association.

In my thirteen years of practice, I've had the opportunity to argue cases in state, federal, and tribal courts; in subjects as diverse as gaming, land tenure, water rights, treaty rights, finance, employment, criminal defense, conflict of laws, and tort (among others). But the real value I brought my clients came through avoiding litigation, fostering relationships, and developing long-term strategies.

Christopher I.

Owner at Irak Law Office in Merrillville, Indiana. Licensed attorney since 2015. Primary focuses include business/corporate law, startup formation, and contract drafting. Love working with small businesses and entrepreneurs.

Attorney. I love contracts, estate plans, and prenuptial agreements! I would love to help you on the same.

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Financial Services, Business, Corporate, Personal Injury, and Healthcare. I've represented fortune 100 companies and defended individuals in personal debt litigation. Wide breadth of experience, ready to assist.

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Contract to lease land from a church.

I’m planning on leasing land from a church. Putting a gym on the property. And leasing it back to the school.

Ok; first step is that you will need a leasing contract with the church. Ask them to prepare one for you so you would just need an attorney to review the agreement and that should cost less than if you had to be the party to pay a lawyer to draft it from scratch. You need to ensure that the purpose of the lease is clearly stated - that you plan to put a gym on the land so that there are no issues if the church leadership changes. Step 2 - you will need a lease agreement with the school that your leasing it do (hopefully one that is similar to the original one your received from the church). Again, please ensure that all the terms that you discuss and agree to are in the document; including length of time, price and how to resolve disputes if you have one. I hope this is helpful. If you would like me to assist you further, you can contact me on Contracts Counsel and we can discuss a fee for my services. Regards, Donya Ramsay (Gordon)

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Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

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Assigning vs Subletting Your Commercial Lease in the UK

By Rachel King

Updated on 28 November 2022 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

Assigning Your Lease

Subletting your lease, which is most appropriate for your business, other options, key takeaways, frequently asked questions.

If you are leasing commercial business premises in England and Wales, you may consider ending your lease early. In that case, there are a few options available. One option is to check if your lease allows you to assign or sublet it to a new tenant or sublet it. This article will explain how lease assignments and sublets work, the difference between assigning and subletting and how to decide which is most appropriate for your business.

A lease assignment is where you find a new tenant to take over your lease and lease commitments.

To take advantage of this option, you will need to obtain your landlord’s consent. Importantly, you need their express consent to allow you to assign your original lease to someone else. Likewise, they need to consent to the new tenant you find as well. To ensure that you can easily get your landlord’s consent to the new tenant, ensure that you find a tenant who can abide by all the conditions of your original lease. 

Additionally, your landlord will want to see financial records to satisfy themselves that they will pay rent when due. Your landlord may also require references from previous landlords to ensure that they will look after the commercial premises. 

Further, your landlord may want you to enter into an Authorised Guarantee Agreement. This is a document where you guarantee your landlord that you will be liable for any lease breaches the new tenant makes. Whilst one of the benefits of a lease assignment is that the lease assignment releases you from your duties under the commercial lease, in effect, this document makes you responsible for those duties in a different way.

A sublet is different to a lease assignment. Here, your lease agreement with your landlord remains in place, so, legally, you are still the tenant of the property. Likewise, you are still responsible for all commitments contained in your lease . With this option, you find a subtenant to lease the commercial premises (or part of the commercial space you rent) and enter into a sublease with this tenant. 

Importantly, you will still need your landlord’s permission to sublet your original lease. However, since your landlord will not be involved in the sublease, they will not need to approve the subtenant. However, you must satisfy yourself that the subtenant you choose can agree to all the terms and conditions of your lease.

In a sublease, you are still responsible for paying rent on time and that you and your subtenant meet all other responsibilities under your lease agreement. You contract with your subtenant to pay rent and meet these obligations. Additionally, your landlord has no legal contract with your subtenant, just with you. Therefore, if your subtenant does not pay the rent due, your landlord can pursue you for this, and equally, you can pursue the subtenant.

Your commercial lease agreement may have express provisions regarding assigning or subletting your lease. For that reason, it is essential to read your lease and check what it says about these two options. If your lease does not give you permission for these options, you may not feel you have many choices. However, it is always worth talking to your landlord and explaining why you want to assign or sublet your lease.

Additionally, suppose you are not using the whole of the premises that you lease or only want to have a tenant for a short amount of time. In that case, a sublease is likely to be the better option for you. 

Alternatively, you may be looking to move to new premises permanently, or feel you no longer need business premises at all. Here, a lease assignment is likely to be the better option. If you are selling your business entirely, then it is common for the purchaser of your business to take your lease via a lease assignment.

Commercial tenants potentially have other options for ending their commercial leases early . For example, your lease may have a ‘break’ clause in it. A break clause provides a mechanism for you to end your lease early, often after a particular amount of time or within a specific period.  

Another option is to ask your landlord for permission to end your lease early. If you are in financial difficulties, your landlord may be willing to consider this option. Further, it may be better to allow you to leave the tenancy early than potentially have to collect unpaid rent later or the cost of eviction proceedings.

Assigning or subletting your commercial lease are two of the options for ending your commercial lease early. With an assignment of your lease, you will find a new tenant to take over your lease. With a sublet, you are still the tenant of your lease but enter into a new contract with the subtenant that you find. Additionally, with a sublease, you will still be liable for breaches of any of the lease terms in your commercial lease, so it is vital to ensure that the subtenant you choose will abide by these terms. Similarly, your landlord may require you to enter into an Authorised Guarantee Agreement when you assign a lease, which effectively makes you liable if the new tenant breaches the commercial lease terms. Whichever option you choose, make sure you do your homework on prospective new tenants or subtenants.

If you need help assigning your commercial lease, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our  membership page .

You need your landlord’s permission to sublet your lease, but they do not usually need to agree to a particular subtenant. However, you will need to satisfy yourself that the subtenant you choose is appropriate, as you will be liable for any breaches of your commercial lease.

Yes, you are still legally responsible for making sure that the rent is paid fully on time. Otherwise, you will breach your commercial lease, and your landlord can pursue you for this.

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Assignment and Subleasing: Leasing Fundamentals

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• Guide to Ending a Tenancy
• Student Specific Accommodation
• Sample Notices of Termination

Subletting and Assignment

On this page you will find information on what subletting and assignment involve in a tenancy and what the rights and responsibilities of tenants and landlords are in this area. It is important this is understood at outset of a tenancy.

• Types of Tenancies and Agreements

Page contents

What is subletting, what is assignment.

Subletting occurs when a tenant permits another party to lease the rental property that the tenant has leased from the landlord. The tenant then assumes the position of landlord (known as the head tenant) in relation to his or her subtenant. Subletting usually occurs because the tenant has signed a  fixed-term lease  and wants, for whatever reason, to get out of the lease before it expires. Subletting can only take place with the consent of the landlord.

Where a landlord refuses the tenant the option of subletting, the tenant can serve a  notice of termination  to end the tenancy if they so wish.

Subletting is not available in Approved Housing Body tenancies.

What is assignment?  

Assignment is where a tenant transfers his or her entire interest in a tenancy to a third party. The original tenant then ceases to have any interest or involvement in the tenancy and the assignee becomes the tenant who now deals directly with the Landlord.  

If a tenant assigns a Part 4 tenancy to a person other than a sub-tenant, the protection provided by a Part 4 tenancy ceases.  The new assignee will require 6 months of continuous occupation in the dwelling before qualifying for Part 4 tenancy rights. 

If a tenant assigns a dwelling to an existing sub-tenant, the Part 4 tenancy will continue to exist in favour of the new assignee for the remaining period of the original Part 4 tenancy and the assignee becomes the tenant of the Landlord.  

Assignment can only take place with the consent of the landlord.  Where a landlord refuses an assignment of a fixed term tenancy, a tenant can serve a notice of termination on the landlord.  

Tenants of Approved Housing Bodies are not permitted to assign or sublet the tenancy. 

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