Assignment of Lease

Legal ScalesWhether you are the landlord or the tenant, and whether the lease in question is of commercial or residential property, you are sure to find the appropriate assignment of lease form.  Simply select your State and choose the form best suited to meet your individual needs.



Your Answer When You Need to Terminate a Lease

What a Lease Assignment Is

Assignment of the lease is a contract assignment tool that can benefit a tenant looking to relocate and end a lease early or a landlord looking to use rent payments to pay creditors. An assignment of lease form can be used to create a commercial or residential lease assignment by a tenant or landlord.

In an assignment agreement, the person seeking to assign the lease to a third party is called the assignor. The new third party who steps into the lease agreement to take over occupancy of a former tenant or receive rent payments by landlord assignment is called the assignee.

If local landlord tenant laws are silent on assignment of leases, then any consent to assignment or lease assignment information and requirements in the master lease will govern. If the master lease is also silent on the issue of subleasing and assignment, typically the courts have held that the tenant has the right to assign the lease.

Assignment Agreement by a Tenant

A lease assignment by a tenant is an assumption of lease by a third party, called the assignee or subtenant, through a contract assignment of the lease in effect between the current tenant, also called the assignor, and landlord. In this lease assignment situation, a transfer of lease is made so that the new tenant can take over lease occupancy rights and make rent payments. However, unless the landlord will agree to release the current tenants, they will remain liable under the master lease if there is a breach of lease by the assignee. Therefore, an assignment of lease sample form may include an assumption of the lease by the assignee or subtenant, as well as a release of the assignor tenant from the terms of the master lease by the landlord. However, this isn't standard and typically the landlord will require compensation for such an agreement.

Landlord Assignment of Rents

Lease assignments may also refer to when a landlord agrees to pay a creditor through an assignment of rents due under leases on rental property. It is often used to pay a mortgage lender in case the landlord defaults on the mortgage loan. If the landlord defaults on the mortgage, or files bankruptcy, any rental income from the property gets paid directly to the lender through the lease assignment agreement. Courts are divided on whether assignment of rents creates a security interest in the property in favor of the assignee.

Differences Between an Assignment of Lease and a Sublease

  • In a sublease, the subtenant pays rents to the original tenant, whereas the assignee in a lease assignment pays rent directly to the landlord.
  • In an assignment of lease, the tenant transfers all of the rented premises for the remainder of the lease term and is typically used when the tenant wants to permanently get out of the lease. In contrast, a sublease is more commonly used when the original tenant is away for a short period and wishes to transfer less than the full term of the lease or just needs a roommate to share the space.
  • A sublease allows the original tenant or assignor to walk away without ties when release and assumption of lease agreements are included with the lease assignment document or assignment of lease example.

Lease Assignment FAQs

Can I sublease my rented property?

Yes, you can sublease your leased property with the permission of the landlord. This is called lease assignment. Assignment of leases or assignment of contract is the process by which the original tenant transfers his/her rights for using the leased property to a subtenant. The person who transfers the rights is called the assignor and the one who receives the rights is called the assignee. Usually, lease assignments or a contract assignment take place over commercial use of a property. In such cases, although third parties take over lease or take an assumption of lease and assignment of rents, the original assignor will still be liable under the original lease agreement.

Can I get a third party to take over lease of my rented property?

You can assign lease of your rented property to another by entering into a lease assignment agreement. It is a legal transfer of lease by which you shift your rights over the leased property to somebody else. This is done by signing an assignment of lease form or an assignment lease. All the terms and conditions of the sublease shall be added to the lease assignment form. The landlord's consent is essential for assignment of the lease. In a sublease, the lessee or tenant has the right to lease the whole or some part of the leased property to somebody else. The original tenant may hold some interest/right prescribed in the master lease.

Is it possible to get an assignment of lease template?

You can find templates and information on subleasing and assignment by following the links below:

Lease Assignment

Sublease

Deed of Sublease


Do I need to sign any document for a residential lease?

You need to enter into an assignment of lease agreement for transferring your rights over the leased property to somebody else. This is also called a sublease agreement. You should obtain the landlord's consent to assignment before contracting with the third party. However, bear in mind that you will still be liable to adhere to the terms and conditions laid down in the master lease. In case of a breach by the assignee, the landlord will have the right to initiate legal action against you.

Can I transfer my rights over a leased property?

You cannot transfer the rights over a leased property without the expressed consent of the landlord. The landlord's consent for carrying out assignment of leases or a landlord assignment is required. Lease assignment or sublease is effectuated by entering into an assignment of lease agreement. A lessee may assign the lease to another by laying down the conditions in a document as prescribed by law. This document shall be duly signed by both the parties. The landlord may expressly release the assignor from the liabilities under the original lease agreement. However, there usually may be a clause in the agreement stating that the assignor is not discharged of any obligations under the lease in the event of breach by the assignee.

Assignment of Lease Package