ASSIGNMENT OF LEASE AGREEMENT
How to assign a lease to someone else.
If you are leasing a property such as a house, home unit or commercial premises, you may come to the point where you no longer wish to use the property. Unfortunately you are still obligated to honour your commitment by the terms of the lease to continue paying the rent and maintain the property. If you find yourself in this situation, you may want to consider assigning the lease to someone else. A transfer of lease, although similar to a subletting the property, is a simple contract you can enter with someone else so they accept responsibility for your lease obligations. However before you do, there are a few things you should know;
WHAT IS A LEASE ASSIGNMENT? A lease assignment is an agreement where the current lessee (the person responsible for fulfilling the lease obligations) enters into a contract with a new party “called the assignee”. The assignee essentially agrees to take over the obligations and responsibilities of the original tenant under the original lease. To put it simply, it’s a way to get someone else to take your place in the lease, with the new party taking on all the duties under the original lease.
WHEN CAN I USE A LEASE ASSIGNMENT? You can feasibly use a lease assignment whenever you are leasing a property. Be it an assignment of a real estate lease,an automobile lease or anything else, you can generally assign the rights and duties under the lease to a third party in almost any circumstance. You may or may not have to first get the lessor’s permission before entering into an assignment of lease agreement, but that depends upon the terms of the underlying lease.
WHAT IS THE DIFFERENCE BETWEEN SUBLETTING AND ASSIGNING A LEASE? When you sublet all or part of the premises to another tenant you are still obliged to honour your obligations under your lease contract with the owner of the property. If you choose to Assign all your rights and obligations under the lease to another party, you would use an Assignment of Lease agreement. Under an Assignment of lease agreement, the new tenant agrees to assume all those rights and obligations on your behalf and indemnifies you against any further obligation to the property owner.
HOW DO I ENTER INTO A LEASE ASSIGNMENT? As with any business agreement, to ensure there are no misunderstandings, you are best advised to have your assignment of lease agreement in writing. The agreement should refer to the terms of the original lease, as well as state what each party will or will not be responsible for under the terms of the assignment. For example, you may enter into contract of assignment where by the new party “the assignee” agrees to do everything required by the tenant under the original lease, except pay the rent. The original tenant “the assignor” might agree to pay the rent and accept a smaller (or even larger) payment from the assignee.
WHAT DO I NEED TO KNOW BEFORE I ENTER INTO A LEASE ASSIGNMENT? At a minimum, you’ll need to know the terms of the original lease, including the length of the lease, any legal regulations regarding the assignment and the new terms. You’ll also want to make sure each party reads the Assignment, completely understands their obligations and signs it.
Assigning real-estate or property leases to other people can be a very effective tool in the right situation. Whether you want torelocate your business, travel the world, or simply don’t want the responsibility under the lease any longer, you can use lease assignments to your benefit. A well-crafted Assignment of Lease Agreement will spell out each parties duties and shield you from potential liability.
Sublease Agreement Template
Assignment of Lease Agreement Template