Assignment of Lease

Jump to section, need help with an assignment of lease.

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

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:

Here is more on an assignment of lease here .

assignment for tenancy

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 .

ContractsCounsel Assignment of Lease Image

Image via Pexels by RODNAE

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.

Meet some of our Assignment of Lease Lawyers

Octavia P. on ContractsCounsel

I am a business law attorney with over 10 years’ experience and a strong background in information technology. I am a graduate of the University of California Berkeley, a member of the Illinois bar and a licensed lawyer (Solicitor) of England and Wales. I actively partner directly with my clients or indirectly, as Of Counsel, to boutique law firms to streamline business practices and manage legal risks by focusing on essentials such as - business contracts, corporate structure, employment/independent contractor agreements, website terms and policies, IP, technology, and commercial related agreements as well as business risk and compliance guidance.

Elizabeth C. on ContractsCounsel

Elizabeth C.

As an experienced contracts professional, I offer an affordable method to have your contracts reviewed! With my review of your contract, you can understand and reduce risks, negotiate better terms, and be your own advocate. I am an Attorney, Board Member, and Freelance Writer with a Bachelor of Arts degree, magna cum laude, in Film, Television and Theatre (“FTT”) from The University of Notre Dame. I was awarded The Catherine Hicks Award for outstanding work in FTT as voted on by the faculty. I graduated, cum laude, from Quinnipiac University School of Law, where I earned several awards for academics and for my work in the Mock Trial and Moot Court Honor Societies. Additionally, in my career, I have had much success as an in-house Corporate Attorney with a broad range of generalist experience and experience in handling a wide variety of legal matters of moderate to high exposure and complexity. My main focus in my legal career has been contract drafting, review, and negotiation. I also have a background in real estate, hospitality, sales, and sports and entertainment, among other things.

Elizabeth R. on ContractsCounsel

Elizabeth R.

Elizabeth is an experienced attorney with a demonstrated history of handling transactional legal matters for a wide range of small businesses and entrepreneurs, with a distinct understanding of dental and medical practices. Elizabeth also earned a BBA in Accounting, giving her unique perspective about the financial considerations her clients encounter regularly while navigating the legal and business environments. Elizabeth is highly responsive, personable and has great attention to detail. She is also fluent in Spanish.

Abby V. on ContractsCounsel

Abby is an attorney and public policy specialist who has fused together her experience as an advocate, education in economics and public health, and passion for working with animals to create healthier communities for people and animals alike. At Opening Doors PLLC, she helps housing providers ensure the integrity of animal accommodation requests, comply with fair housing requirements, and implement safer pet policies. Abby also assists residents with their pet-related housing problems and works with community stakeholders to increase housing stability in underserved communities. She is a nationally-recognized expert in animal accommodation laws and her work has been featured in The Washington Post, USA Today, Bloomberg, and Cosmopolitan magazine.

Brit B. on ContractsCounsel

First in-house counsel for small TX-based company operating in the Middle East. Experienced with drafting, revising, and editing a variety of domestic and international contracts.

Matan S. on ContractsCounsel

Matan is an experienced M&A, corporate, tax and real estate attorney advising closely held businesses, technology start ups, service businesses, and manufacturers in purchases, sales, and other exit strategies. Matan works with founders and first-and-second generation owners to strategically transition businesses.

Sean D. on ContractsCounsel

Accomplished and results-driven business attorney with extensive experience in commercial real estate / project finance, commercial transactions, and entity formations, that possesses a winning blend of subject matter expertise, skill in client relationship management, and practical experience. Leverages a unique mix of legal, strategic, and analytical expertise that consistently meets and surpasses client expectations. Specialties: Commercial Real Estate Law, Contract Negotiation, Entity Formation, Joint Ventures, Procurement, Lease/Buy/Sell Transactions, Business Consultations, Team Leadership, and Economic Development

Find the best lawyer for your project

Assignment of lease lawyers by city.

related contracts

other helpful articles

"ContractsCounsel puts on-demand legal services in the cloud. Not only is their service more convenient and time-efficient than visiting brick and mortar offices, but it’s more affordable too—and I’ve been universally impressed by the quality of talent provided. If you’re looking for a modern way for your small business to meet legal needs, I can’t recommend them enough!"

assignment for tenancy

"This was an easy way to find an attorney to help me with a contract quickly. It was easy to work with Contracts Counsel to submit a bid and compare the lawyers on their experience and cost. I ended up finding someone who was a great fit for what I needed."

assignment for tenancy

"ContractsCounsel suited my needs perfectly, and I really appreciate the work to get me a price that worked with my budget and the scope of work."

assignment for tenancy

"I would recommend Contracts Counsel if you require legal work."

assignment for tenancy

"ContractsCounsel helped me find a sensational lawyer who curated a contract fitting my needs quickly and efficiently. I really appreciated the ease of the system and the immediate responses from multiple lawyers!"

assignment for tenancy

"ContractsCounsel came through in a big way for my start up. Their platform put me in touch with the right lawyers for my industry and the team was as responsive as humanly possible during the whole process. I'll be back for more contract work in the future, as the lawyers they've vetted for these services are top tier."

assignment for tenancy

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Jonathan Attorney serving CA 8 years experience

Kelly Attorney serving NC 7 years experience

Navigating the assignment of a residential lease by Ronna L. DeLoe, Esq.

Navigating the assignment of a residential lease

A landlord can assign his leases to a new buyer of his building. Likewise, a tenant may be able to assign his lease if he needs to relocate. Find out how to assign your lease and what you can do to protect yourself when doing so.

by Ronna L. DeLoe, Esq. updated  February 02, 2023  ·  3 min read

As a tenant, you may want to get out of your residential lease without paying the remaining rent. Likewise, if you're a landlord and sell your rental property, the buyer must now collect rent from the tenants, who may have no idea you sold the property. In both situations, assignment of a lease with a release for the tenant and assignment of leases with notice by the landlord accomplish these goals.

A pair of glasses, a blue ballpoint pen, and a calculator resting on a residential lease agreement

Assignment of lease by the tenant

If you're the tenant and want to leave before the end of your lease term, you may be able to assign your lease to a third party if the landlord doesn't let you out of the lease. The third party then becomes the new tenant, who is bound by the terms of the original lease and pays rent to the landlord.

Most often, the lease won't permit assignment without the landlord's approval, but leases often state that the landlord cannot unreasonably withhold consent. As long as you produce a tenant who's shown a history of payment under prior leases and has been a model tenant, a landlord should consent to assignment.

The assignment of lease form should include places for the tenant-assignor, the new tenant-assignee, and the landlord to sign. If the master lease allows assignment, then the tenant doesn't need the landlord's permission; the tenant can sign an assignment of lease agreement without the landlord's signature.

If the landlord allows an assignment of the lease, you, as the tenant, also want him to sign a release stating that you're not responsible for the new tenant's failure to pay or for any damage she causes. Without such a release, you may still be liable for both.

When you, as the tenant, assign the lease, you sign an agreement that either reads “Assignment of Lease," “Lease Assumption Agreement," or “Assignment and Assumption Agreement." An assumption of the lease means that the new tenant assumes your obligations, such as paying rent and keeping the apartment in good condition.

Assignment of lease vs. sublease

An assignment of a lease transfers the tenant's entire rights in the property to a third party. With a sublease, on the other hand, the tenant transfers only a portion of the remaining lease. For example, if the original tenant has six months remaining on his lease and he gives the entire six months to a third party, the tenant is permanently assigning his rights to live on the property to the third party. If, however, the tenant allows that third party to stay at the premises for only three months, and the tenant intends to return after three months, he is subleasing the premises.

Assignment of lease by the landlord

A landlord can assign the right to collect rent to someone who has purchased the property. An assignment of lease from the seller to the buyer allows the new landlord to collect rent from any and all current tenants in the building. The language in the landlord's assignment of lease agreement can include assignment of security deposits, if the parties agree to it. An assignment of leases by the landlord to the buyer affords protection to the buyer so he can collect rent.

An assignment of leases by the landlord to the buyer is meaningless if tenants aren't aware the landlord sold the property, which is why it's important for the assignor-landlord to give tenants proper notice. A notice of assignment of lease, which is a form signed by both the assignor-landlord and the assignee, or new landlord, is one way to give notice. Another way is to send a letter on the landlord's letterhead. Either way, the notice must include the new landlord's address and how rent is to be paid.

Both landlords and tenants who become assignors should sign a formal assignment of lease agreement, which an online service provider can prepare for you. If you're the tenant who has assigned your lease, try to get a release or you'll still be liable to the landlord. If you're the landlord, make sure you can count on the new tenant to pay the rent before you release the primary tenant from his obligations under the lease.

About the Author

Ronna L. DeLoe, Esq.

Related Topics

You may also like.

Understanding an assignment and assumption agreement

Business Management

Understanding an assignment and assumption agreement

Need to assign your rights and duties under a contract? Learn more about the basics of an assignment and assumption agreement.

Feb 08, 2023 · 3 min read

Assignment Of Residential Lease With Landlord Consent - How to Guide

Assignment Of Residential Lease With Landlord Consent - How to Guide

1. Overview Occasionally, tenants want to leave a rental property before the end of their lease. Individuals may take new jobs in new cities, and companies may go out of business or sell their enterprise to a third party. Whatever the reason, tenants can transfer their lease interests to new parties by completing an assignment of the lease.

May 02, 2022 · 11 min read

Assignment Of Commercial Lease With Landlord Consent - How to Guide

Assignment Of Commercial Lease With Landlord Consent - How to Guide

10 Terms to Include In Your Rental Agreement

10 Terms to Include In Your Rental Agreement

The terms of your rental agreement are important for protecting your rights as a property owner.

May 25, 2022 · 4 min read

Assignment And Assumption Agreement - How to Guide

Assignment And Assumption Agreement - How to Guide

1. Overview After a contract has been signed, a change in business climate or in a party’s liquidity can necessitate an assignment of that agreement. If both of the original parties agree to the change and sign documents transferring existing interests and obligations, an agreement can be assigned and assumed by a third party.

May 02, 2022 · 5 min read

Before you sublease, be sure to get a landlord consent to assignment

Before you sublease, be sure to get a landlord consent to assignment

Need to sublease your rented apartment? Here's why you should obtain your landlord's consent first.

Feb 09, 2023 · 2 min read

18 terms to include in a simple lease agreement

Managing Your Business

18 terms to include in a simple lease agreement

Are you a landlord who just wants a one-page lease or who wants to write your own lease? You can prepare one by following the tips listed here.

Feb 21, 2023 · 5 min read

Tenants’ rights: Knowing your rights as a tenant

Tenants’ rights: Knowing your rights as a tenant

There are specific laws that provide protection for tenants. Being informed when you are a renter allows you to know your rights and stand up for yourself when necessary.

Mar 03, 2023 · 5 min read

Lease agreement vs. rental agreement: which should you use for your property?

Property Owners

Lease agreement vs. rental agreement: which should you use for your property?

Wondering whether you should be renting out your property by using a lease agreement or a rental agreement? Read on to learn the crucial differences between these two common types of rental contracts.

Feb 10, 2023 · 3 min read

Giving your landlord a lease termination letter

Giving your landlord a lease termination letter

If you're terminating your lease early, you'll need to draft a letter explaining yourself and provide additional information.

Feb 03, 2023 · 4 min read

Navigating the Assignment of a Commercial Lease

Real Estate and Business

Navigating the Assignment of a Commercial Lease

Special circumstances can require a tenant or a landlord to assign a commercial lease. Find out the most common situations for a commercial lease assignment and whether it's right for your situation.

May 02, 2022 · 3 min read

Creating a residential sublease agreement with landlord consent

Creating a residential sublease agreement with landlord consent

Need to move out of your home before the lease is up? Find out whether subleasing might work for your situation and how to go about it.

Feb 02, 2023 · 3 min read

assignment for tenancy

Real Estate Terms Dictionary

Assignment of Lease

Definition of "assignment of lease".

The Assignment of Lease is a title document (also referring to the process itself) whereby all rights that a lessee or tenant possesses over a property are transferred to another party.

What is an Assignment of Leases:

If a tenant wants to get out of a lease that is not expired, one of the legal options is to assign or transfer the lease to somebody else. For example, if somebody signs a commercial lease for 12 months and the business stops working after 10 months, that person can still opt not to pay for the remaining 2 months by assigning the lease. The document attesting the transfer (from the original tenant to the incoming tenant) is called an "Assignment of Lease Agreement". Depending on the lease, there may be different requirements that need to be satisfied before the original tenant can be released of any lease-related responsibilities. The most important one is that, in most cases, the landlord needs to consent to the lease transfer through a document called "License to Assign". It is important to have this form signed before moving on to the next steps of the "Assignment of Lease", otherwise the landlord might refuse to approve the assignment later. Other circumstances that may allow the landlord to withhold consent can usually be found under the "Alienation" section of the lease agreement. Assigning a lease is not the same thing as subletting, although the two terms are often confused. In the case of an assignment of lease, there is a direct relationship established between the new tenant and the landlord, as the landlord collects rent directly from the new tenant after the latter's assumption of lease. In the case of a sublease, the original tenant is still responsible for all the conditions stated in the lease agreement even if there is a new tenant who pays the rent.

Assignment of leases

References: http://www.questbrook.co.uk/commercial_docs/Assignment_of_Commercial_Lease.html http://www.realtown.com/words/assignment-of-lease

Start researching a property!

Property Search

Disclaimer: The glossary is intended to provide real estate professionals and home buyers with a basic understanding of various specialized terms related to legal rights over a property. All terms appear in public records such as ACRIS. We do not take responsibility for the legal accuracy of the definitions provided and ask that use of these explanations in a legal setting be made only after checking with a lawyer or another specialist in the field.

assignment for tenancy

What are you looking for?

Javascript required.

You are reading this message because your browser either does not support JavaScript or has it disabled. Please enable JavaScript and Cookies in order to use this site.

If your browser is not JavaScript capable, you can obtain either Firefox or Microsoft Internet Explorer . Under Linux, any browser using the latest Mozilla engine should work.

Free Lease Assignment Agreement

Create your free lease assignment agreement.

assignment for tenancy

Your Lease Assignment Agreement

ASSIGNMENT OF LEASE WITH CONSENT OF LANDLORD

THIS ASSIGNMENT OF LEASE dated this ________ day of ________________, ________

_________________________

(the "Assignor")

OF THE FIRST PART

_______________________

(the "Assignee")

OF THE SECOND PART

IN CONSIDERATION OF the Assignor agreeing to assign and the Assignee agreeing to assume the Lease for the Premises, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, both parties agree to keep, perform and fulfill the promises, conditions and agreements below:

IN WITNESS WHEREOF the Assignor and Assignee have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

CONSENT OF LANDLORD

The Landlord in the above Assignment of Lease executed on the ________ day of ________________, ________, consents to that Assignment. The Landlord also agrees to the Assignee assuming after March 5, 2023, the payment of rent and performance of all duties and obligations as provided in the Lease.

Lease Assignment Information

Alternate names:.

A Lease Assignment is also called a/an:

A Lease Assignment can also be called a Commercial Lease Assignment or a Residential Lease Assignment depending on the type of property it is being used for. LawDepot's Lease Assignment can be used for residential or commercial properties.

What is a Lease Assignment?

A Lease Assignment transfers the rights and obligations of an existing lease from one tenant to another.

Who are the parties in a Lease Assignment?

Generally, there are two parties involved in a Lease Assignment:

Typically, a landlord does not sign the Lease Assignment itself, but their information may be included in the document and they may need to sign a consent allowing the assignor to assign the lease.

Why do I need a Lease Assignment?

A Lease Assignment is typically used when a tenant wishes to vacate a property before their lease expires . There are many reasons why tenants would need to use a Lease Assignment, for example:

What is included in a Lease Assignment?

Typically, a Lease Assignment will contain information regarding:

A Lease Assignment should also include a copy of the master lease (the original lease for the property, signed by the landlord and assignor) or a copy should be provided to the assignee for the assignee's records.

Is a landlord's consent required for a Lease Assignment?

You should have the consent of your landlord when you assign a lease.

The master lease may state whether a tenant is permitted to assign their lease and if consent is needed. However, if it does not, it is a good idea to speak with your landlord and create a Landlord's Consent to Lease Assignment before transfering the lease to a new tenant.

Who is liable in an assigned lease?

Your Rental Agreement may contain a clause about assignment and continuing liability. If it does not, the landlord usually decides whether the assignor will be responsible for damages or other breaches of the lease caused by the assignee (or the assignee's guests, clients, or customers).

The Lease Assignment should note whether the assignor is liable for the assignee's conduct (for instance, paying for property damages, missed rent payments, fines from not complying to noise ordinances, etc.). If the assignor has been released from liability, the landlord can only seek compensation for property damage or other lease breaches from the assignee.

In contrast, if the assignor remains liable under the original lease, then the landlord can seek recourse from both the assignee and assignor.

If the assignee is liable but the landlord tries to collect payment from the assignor, the Assignment Agreement will help protect the assignor by stipulating that the assignor can seek recourse from the assignee.

What is the difference between assigning and subletting a lease?

Both assignment and subletting involve finding a new tenant, but there are some key differences.

An assignment is when the tenant transfers their lease interest to a new tenant using a Lease Assignment. The assignee takes the assignor's place in the landlord-tenant relationship, although the assignor may remain liable for damages, missed rent payments, and other lease violations.

A sublease is when the tenant temporarily hands over the rights and obligations of a lease to a third party by using a Sublease Agreement. Although the landlord typically isn't a party to the agreement, they can still hold the tenant responsible for the terms of the original lease.

Before deciding to assign or sublet your rental property, it's important to review your Lease Agreement (the master lease) for any rules and discuss your options with your landlord.

Related Documents:

Frequently Asked Questions:

Share this contract on Facebook

©2002-2023 LawDepot® (Sequiter Inc.). All Rights Reserved. Disclaimer. Communication between you and LawDepot® is protected by our Privacy Policy and not by attorney-client privilege. LawDepot® is not a law firm and cannot provide legal advice. We provide information and software, and you are responsible for appropriately using this material. Your use of this site is subject to our Terms of Use . This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

©2002-2023 LawDepot® (Sequiter Inc.). All Rights Reserved. About Us | Privacy Policy | Disclaimer LawDepot® is not a law firm and cannot provide legal advice. Use of this site is subject to our Terms of Use . This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Your use of this site is subject to our Terms of Use , Disclaimer and Privacy Policy . LawDepot® is not a law firm and cannot provide legal advice. We provide information and software and you are responsible for appropriately using this material. ©2002-2023 LawDepot® (Sequiter Inc.). All Rights Reserved. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

©2002-2023 LawDepot® (Sequiter Inc.). All Rights Reserved. LawDepot® is not a law firm and cannot provide legal advice.

Use of this site is subject to our Terms of Use . This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Your use of this site is subject to our Terms of Use , Disclaimer and Privacy Policy . LawDepot® is not a law firm and cannot provide legal advice. ©2002-2023 LawDepot® (Sequiter Inc.). All Rights Reserved.

Note: Your initial answers are saved automatically when you preview your document. This screen can be used to save additional copies of your answers.

Assignment by Tenant Sample Clauses

Assignment of Lease Form

Create a high quality document online now!

assignment for tenancy

Updated July 11, 2022

A lease assignment allows a tenant to “assign” and transfer the name of the lease, often the tenant, to someone else. The landlord must approve the tenant and, if accepted, an assignment will be executed by both parties. The assignee will be the new tenant and the original tenant will be released from the lease.

Residential (Example)

When a tenant can no longer make the monthly rent payments and knows someone that can replace them in the apartment. The landlord will be contacted and the new tenant will be screened by their credit score and background. If approved, an assignment will be written and ready for signature.

Commercial (Example)

When a business is purchased and the old owner has no interest in the property. The landlord will be notified that the business is no longer owned by the tenant and will issue a lease assignment to make the new owner personally liable for the lease.

assignment for tenancy

By using the website, you agree to our use of cookies to analyze website traffic and improve your experience on our website.

Law Self logo

A Project of National Paralegal College

EARN COLLEGE CREDIT FOR ONLY $20 A CREDIT WITH LAWSHELF!

LawShelf courses have been evaluated and recommended for college credit by the National College Credit Recommendation Service (NCCRS), and may be transferred to over 1,500 colleges and universities .

We also have established a growing list of partner colleges that guarantee LawShelf credit transfers, including Excelsior College , Thomas Edison State University , University of Maryland Global Campus , Purdue University Global , and Southern New Hampshire University .

GET STARTED TODAY!

Assignments and Sub-Leases

Video-course: tenant’s duties - module 4 of 5, video-course: warranties and limits on sales contracts - module 3 of 5.

Assignments and subleases are terms for situations in which a tenant in possession of property transfers his or her right to possess that property to a third party. If the lessee transfers his or her entire remaining interest in the tenancy, then the transfer is known as an assignment. If the lessee transfers only part of his or her interest, then the transfer is known as a sublease. For example:

Barney leases Rubbleacre from Fred for two years, beginning January 1, 2013 and ending on December 31, 2014 at the rental price of $1,000 per month. On January 1, 2014, with one year remaining on the lease, Barney and Kazoo agree that Kazoo will occupy the land for the remainder of the lease, and that Kazoo will pay the $1,000 per month rent to Fred. In this case, Barney has “ assigned ” his lease to Kazoo. Barney leases Rubbleacre from Fred for two years, beginning January 1, 2013 and ending on December 31, 2014 at the rental price of $1,000 per month. On January 1, 2014, with one year remaining on the lease, Barney and Kazoo agree that Kazoo will occupy the land for the next six months and pay the rent for those months. At the end of six months, Barney will move back onto the land and finish out the remainder of the lease. In this case because Barney and Kazoo have agreed that Kazoo will assume less than the full remainder of the lease, Barney has “ sublet ” part of his interest in Rubbleacre to Kazoo.

See McClain Airlines, Inc. v. Republic Airlines, Inc. , 1991 U.S. App. LEXIS 18047 (1991) .

As a general principle, both assignments and subleases are allowed, and so any tenant can assign his or her lease to a third party or sublease his or her interest in the property to a third party at any time. However, as a practical matter, many lease agreements specifically prohibit assignments or subleases. Of course, any agreement between landlord and tenant that prohibits assignments or subleases is fully binding and enforceable.

The key issue to be discussed, then, is what affect the transfer of interest has on all the involved parties. Since there are several parties involved in these transactions, we will start by defining the parties. In an assignment, there is the landlord/ lessor (the property owner), the tenant/ assignor (the person who leased it from the landlord and then assigned his or her interest to a third party) and the assignee (the person who received the assignment). In a sublease, there is the landlord/ lessor, the tenant/ sublessor (the party who leased the property from the landlord but is now subleasing the property to a third party), and the sublessee.

As a further necessary introduction, there are two forms of relationship between every landlord and tenant. There is a contractual relationship that took effect and exists by virtue of the lease agreement itself. That relationship is known as “ privity of contract ”. In addition, there is a property ownership relationship, by virtue of their sharing of the ownership of the property. That relationship is known as “ privity of estate ”. “Privity of estate” exists between two parties when those two parties have successive ownerships in the same property (i.e., one holds a present interest while the other holds a future interest or they both hold future interests, one after another).

The Assignment

An assignment is a full transfer of the lease between the tenant and the assignee. Therefore, since the tenant no longer has any ownership interest in the property, there is no longer any relationship between the landlord and the tenant as far as the property ownership is concerned. Therefore, there is no longer “privity of estate” between the landlord and the tenant. On the other hand, there now is privity of estate between the landlord and the assignee. This is because the assignee now owns the present interest in the property. This present interest will end only at the end of the lease when it will go back to the landlord. Since the landlord’s right to possession is now successive to the possession of the assignee, the landlord and assignee are in privity of estate.

Privity of contract, on the other hand, still exists between the landlord and the tenant. This is because the original contract that existed between the landlord and the tenant is still fully valid even after the assignment. In other words, the landlord does not give up his or her right to enforce the lease agreement with the tenant just because the tenant transfers his or her interest to the third party. There is no privity of contract, of course, between the landlord and the assignee because those two parties never agreed to anything between themselves. For example:

Ethel owns Blackacre. She leases Blackacre to Lucy for 5 years. During year 2, Lucy assigns her interest in Blackacre to Ricky. Ethel is in privity of estate with Ricky and not Lucy and in privity of contract with Lucy and not Ricky. Also note that Lucy and Ricky are in privity of contract (because they made an agreement with each other), but not in privity of estate (Lucy has no possession interest in Blackacre, and so she does not have an interest that either follows or is followed by Ricky’s interest).

The sublease.

The sublease is only a partial transfer of interest from the tenant to the sublessee. The tenant is transferring part of his or her interest in time to the sublessee. Therefore, there is no privity of contract or privity of estate between the landlord and the sublessee in a sublease. The reason that there is no privity of estate between the landlord and the sublessee is that the landlord’s right to possession of the property does not follow the sublessee’s right to possession. Instead, it still follows the tenant’s right of possession. The landlord is, however, still in both privity of estate and privity of contract with the tenant. Privity of contract is still applicable for the same reason as with the assignment (the landlord and the tenant agreed on the terms of the original lease). In addition, there is privity of estate between the landlord and the tenant because the right to possession of the landlord still follows the right of possession of the tenant. For example:

Ethel owns Blackacre. She leases Blackacre to Lucy for 5 years. During year 2, Lucy subleases Blackacre to Ricky for one year. Ethel is not in privity of estate or privity of contract with Ricky because she did not make an agreement with Ricky and because her interest in possession of Blackacre does not follow Ricky’s (it follows the end of Lucy’s five year lease). On the other hand, Ethel and Lucy are in both privity of contract (because their agreement is still valid) and privity of estate (because Ethel’s interest follows the end of Lucy’s lease). Note that Lucy and Ricky are in both privity of estate and privity of contract. They are in privity of contract because they made an agreement with each other. They are in privity of estate because Lucy’s interest (in the remainder of her lease) follows Ricky’s interest (Lucy will get Blackacre at the end of Ricky’s one year sublease).

The ramifications of who is in privity of what with whom can be crystalized in a few rules:

For example:

1. Ethel owns Blackacre. She leases Blackacre to Lucy for 5 years. During year 2, Lucy assigns her interest in Blackacre to Ricky.

2. Ethel owns Blackacre. She leases Blackacre to Lucy for 5 years. During year 2, Lucy subleases Blackacre to Ricky for one year.

Free Lease Assignment Agreement Template for Microsoft Word

Download this free Lease Assignment Agreement template as a Word document to easily assign a lease to another party with consent from the landlord.

Lease Assignment Agreement

THIS ASSIGNMENT OF TENANCY AGREEMENT dated this [Insert date]

[Insert name] (the “Assignor”)

– AND-

[Insert name] (the “Assignee”)

A. This is an agreement (the “Assignment”) to assign a residential tenancy agreement in real property according to the terms specified below.

B. The Assignor wishes to assign and transfer to the Assignee that tenancy agreement (the “Tenancy Agreement”) dated June 11, 2020, and executed by the Assignor as tenant and by _________________________ as landlord (the “Landlord”).

IN CONSIDERATION OF the Assignor agreeing to assign and the Assignee agreeing to assume the Tenancy Agreement for the Premises, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, both parties agree to keep, perform and fulfill the promises, conditions and agreements below:

1. The Tenancy Agreement governs the rental of the following described premises (the “Premises”) to the Assignor: ______________________________________________

Assigned Tenancy Agreement

2. The Assignor assigns and transfers to the Assignee all of the Assignor’s right, title, and interest in and to the Tenancy Agreement and the Premises, subject to all the conditions and terms contained in the Tenancy Agreement.

Effective Date

3. This Assignment takes effect on June 11, 2020 (the “Effective Date”), and continues until the present term of the Tenancy Agreement expires on June 11, 2020.

Assignor’s Interest

4. The Assignor covenants that:

a. the Assignor is the lawful and sole owner of the interest assigned under this Assignment; b. this interest is free from all encumbrances; and c. the Assignor has performed all duties and obligations and made all payments required under the terms and conditions of the Tenancy Agreement.

Breach of Tenancy Agreement by Assignee

5. Consent to this Assignment will not discharge the Assignor of its obligations under the Tenancy Agreement in the event of a breach by the Assignee.

6. In the event of a breach by the Assignee, the Landlord will provide the Assignor with written notice of this breach and the Assignor will have full rights to commence all actions to recover possession of the Premises (in the name of the Landlord, if necessary) and retain all rights for the duration of the Tenancy Agreement provided the Assignor will pay all accrued rents and cure any other default.

Governing Law

7. It is the intention of the parties that this Assignment, and all suits and special proceedings under this Assignment, be construed in accordance with and governed, to the exclusion of the law of any other forum, by the laws of the State of New South Wales, without regard to the jurisdiction in which any action or special proceeding may be instituted.

Miscellaneous Provisions

8. This Assignment incorporates and is subject to the Tenancy Agreement, a copy of which is attached hereto, and which is hereby referred to and incorporated as if it were set out here at length. The Assignee agrees to assume all of the obligations and responsibilities of the Assignor under the Tenancy Agreement.

9. This Assignment will be binding upon and inure to the benefit of the parties, their successors, assigns, personal representatives, beneficiaries, executors, administrators, and heirs, as the case may be.

10. All rents and other charges accrued under the Tenancy Agreement prior to the Effective Date will be fully paid by the Assignor, and by the Assignee after the Effective Date. The Assignee will also be responsible for assuming and performing all other duties and obligations required under the terms and conditions of the Tenancy Agreement after the Effective Date.

11. There will be no further assignment of the Tenancy Agreement without the prior written consent of the Landlord.

IN WITNESS WHEREOF the Assignor and Assignee have duly affixed their signatures under hand and seal on this [Insert date]

SIGNED BY THE ASSIGNOR

_____________________________ Assignor: _________________________

in the presence of (Name of witness) _______________________

(Signature of witness) _____________________________

SIGNED BY THE ASSIGNEE _____________________________ Assignee: _______________________

in the presence of (Name of witness) ___________________

(Signature of witness) _______________________________

CONSENT OF LANDLORD

The Landlord in the above Assignment of Tenancy Agreement executed on [Insert date] consents to that Assignment. The Landlord also agrees to the Assignee assuming after [Insert date] the payment of rent and performance of all duties and obligations as provided in the Tenancy Agreement. Dated: [Insert date]

Landlord: _________________________

Related Documents

Advertising agreement, arbitration agreement, barter agreement, business sale agreement.

IMAGES

  1. Commercial Tenancy Agreement Template Nz

    assignment for tenancy

  2. Tenancy Agreement Sample In Word / Tenancy Agreement Templates Free Download Edit Print And Sign

    assignment for tenancy

  3. Tenancy Notice Letter Template Examples

    assignment for tenancy

  4. Deed Of Assignment Of Tenancy Agreement Form

    assignment for tenancy

  5. Sample Tenancy Agreement Letter

    assignment for tenancy

  6. Tenancy Agreement Example

    assignment for tenancy

VIDEO

  1. Tenancies 2: Lettings Applicants

  2. Tenancies 1 Property and Landlord

  3. 1/293B Trower Road, NAKARA, Northern Territory

COMMENTS

  1. Assignment of Lease: Definition & How They Work (2022)

    The assignment of lease is a title document that transfers all rights possessed by a lessee or tenant to a property to another party.

  2. Navigating the assignment of a residential lease

    A landlord can assign the right to collect rent to someone who has purchased the property. An assignment of lease from the seller to the buyer allows the new

  3. ASSIGNMENT OF LEASE AGREEMENT

    WHEREAS, Assignor desires to assign all of its right, title and interest in the Lease to Assignee and Assignee desires to assume Assignor's obligations under

  4. Assignment of Lease definition and explanation

    The Assignment of Lease is a title document (also referring to the process itself) whereby all rights that a lessee or tenant possesses over a property are

  5. Free Lease Assignment Agreement

    An assignment is when the tenant transfers their lease interest to a new tenant using a Lease Assignment. The assignee takes the assignor's place in the

  6. TENANT ASSIGNMENT Sample Clauses

    TENANT ASSIGNMENT. Tenant shall not assign, in whole or in part, this Lease, or allow it to be assigned, in whole or in part, by operation of law or

  7. Assignment by Tenant Sample Clauses

    Assignment by Tenant. (a) Tenant acknowledges that Landlord has relied both on the business experience and creditworthiness of Tenant and upon the particular

  8. Free Assignment of Lease Form

    A lease assignment allows a tenant to “assign” and transfer the name of the lease, often the tenant, to someone else.

  9. Foundations of Law

    Assignments and subleases are terms for situations in which a tenant in possession of property transfers his or her right to possess that property to a

  10. Free Lease Assignment Agreement Template for Microsoft Word

    Download this free Lease Assignment Agreement template as a Word document to easily assign a lease to another party with consent from the landlord.