Generally, when you enter into a lease you are bound to observe the terms of the lease until it expires. If your circumstances have changed and you need to end your lease early, you will still be obligated to honour your commitments under the terms of the lease and to continue paying the rent. If you don’t, you may be liable to pay the losses of the landlord, and costs to secure a replacement tenant.
Assigning, or transferring the lease , is a simple contract whereby a third party (the assignee ) agrees to take your place under the lease. The assignee accepts full responsibility for your obligations, and receives all of the rights you enjoyed, under the lease from the date of assignment.
If you sublet , you will still be liable to the landlord under the lease, even for damage or loss caused by the sub-tenant. This is because, you remain bound by the terms of the lease as the tenant.
The sub-tenant has contractual obligations to you to pay rent to you (not to your landlord) and to act in accordance with your sub-letting agreement. You continue to be bound by the terms of the original lease and must ensure your obligations are complied with, including payments to the landlord and upkeep and care of the property.
If the sub-tenant defaults, the landlord can seek to recover costs directly from you. And you in turn, will have rights to recover these costs from your sub-tenant.
Whether you wish to assign or sublet your lease, you should first refer to your Lease Agreement and make yourself familiar with the clauses dealing with assignment.
It is likely your lease will require you to get the landlord’s approval to the proposed new tenant (or sub-tenant). It should set out the steps you need to take to obtain the landlord’s approval.
If your lease does not stipulate this, you may still be required to obtain landlords consent under the tenancy laws applicable in your State – so check the appropriate tenancy legislation , such as the Residential Tenancy Act or Retail Tenancy Act. Commercial leases are not regulated by legislation.
Before the landlord gives their consent, they will first need to satisfy themselves that the proposed new tenant will be able to satisfy their financial obligations and other requirements. The landlord may ask for references and other information so that they can decide whether the proposed new tenant or sub-tenant is satisfactory.
You can use this whenever you are leasing a property and need to assign your rights to someone else. Whether you need to assign your rights under a real estate lease, a vehicle lease or anything else, you can assign the rights and duties to a third party in almost any circumstance.
At a minimum, you’ll need to know the terms of your original lease dealing with assignment, any applicable legislation regarding assignments and the proposed new terms. You’ll also want to make sure each party reads and completely understands the assignment documentation and of course that it is signed correctly.
Assigning real-estate or property leases to someone else can be a very effective tool in the right situation. Whether you want to relocate your business, sell your business, travel the world, or simply don’t want the responsibility under the lease any longer, you can use an assignment to your benefit. A well-crafted agreement will spell out each party’s duties and shield you from potential liability .Assignment of Lease Kits Available