Notice of Assignment or Transfer of Lease
Notice of assignment of lease, more assignment of leases, notification.
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 .
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Download the PDF: Assignment of lease agreement
Download the PDF: Notice of lease assignment
Download the PDF: Notice of subletting of dwelling
Breaking your lease… without breaking the rules!
Contrary to popular belief, a lessee cannot simply break their lease with three months’ notice at any time during the lease and for any reason.
In fact, there are only four specific situations where the lease can be terminated during its term:
- The lessee has been allocated a dwelling in low rental housing .
- They can no longer occupy the dwelling because of a disability .
- They are a senior who has been permanently admitted to a residential and long term care centre (CHSLD), a seniors’ residence or any other lodging facility where the care and services required by their state of health are provided.
- The safety of the lessee or of a child living with the lessee is threatened because of the violent behaviour of a spouse or former spouse or because of a sexual aggression .
A lessee cannot force the lessor to terminate their lease for other reasons , such as the purchase of a home, divorce, disagreement between joint tenants, formation of a new household, the need for a larger dwelling, financial problems, or moving for work.
The lessee can always try to come to an agreement with the lessor about terminating the lease, preferably in writing.
If there is no agreement, the lessee has two choices : they can assign their lease or sublet their dwelling to another person.
It should be noted that you cannot assign your lease or sublet your dwelling if:
- You are a student renting a dwelling at an educational institution.
- You are a lessee in low rental housing.
- Your dwelling is used as a family residence and the lessor has been notified of this fact by either you or your spouse (married or civil union spouse, not de facto spouse), unless your spouse has given written consent to the assignment or sublet.
Note: In some cases (such as joint tenancy situations), your right to assign or sublet may be restricted. Contact the Tribunal administratif du logement for more information.
Assignment vs. subletting: What’s the difference?
If you are a lessee and you want to leave a dwelling, ask yourself whether you want to have the option to return to the dwelling.
If you are leaving temporarily to travel, study or work for just a few months, and your goal is mainly to avoid paying rent for an empty dwelling, then subletting would be a good solution. You remain the lessee, with all of your rights and obligations intact.
If, on the other hand, you are leaving for a job in another city or moving into a new home, and you would rather be released from your lease and its obligations, you’re better off assigning your lease. When you do this, you waive your right to return to the dwelling.
Assignment and subletting: Similarities
Some of the formalities of these two situations are identical.
Before we go any further, there are a few terms we should define for the sake of clarity:
- The assignor is the lessee who is assigning their lease, i.e., the person who is leaving the dwelling.
- The assignee is the person to whom the lessee assigns their lease, i.e., the person who will be living in the dwelling.
- The sublessor is the lessee who is subletting their dwelling, i.e., the person who is leaving the dwelling.
- The sublessee is the person to whom the lessee sublets their dwelling, i.e., the person who will be living in the dwelling.
Notice of assignment or subletting
Found someone interested in living in your dwelling, either as an assignee or a sublessee? Sign a written agreement right away (either an assignment of lease agreement or a sublet lease), which will be conditional on the lessor granting consent. How to go about entering into this agreement will be explained further on.
Next, give the lessor notice , in writing , with the name and address of the person who is interested in your dwelling. This information is mandatory . Of course, you may also provide the lessor with further information, provided that you have the “applicant’s” consent . The notice should also include the expected date of the assignment or sublet. We suggest using the notice of assignment or subletting templates that are available on the Tribunal’s website or from your local Tribunal office.
Make sure that you can prove the date that the lessor received the notice, because they have 15 days from this date to let you know whether they accept or refuse the proposed lessee. If they do not respond , they are presumed to have accepted the person.
Refusal of assignment or sublet
If the lessor refuses the proposed lessee, they are required to inform you of their reasons for doing so. Their reasons for refusing the proposed lessee must be serious , such as problematic behaviour or an inability to pay the rent. So, it is a good idea for you to thoroughly vet the “applicant” yourself before proposing them to the lessor!
Recourse if the lessor refuses
If the lessor refuses for reasons that do not seem serious, you can ask the Tribunal to assess these reasons or terminate the lease.
If the Tribunal determines that the lessor’s refusal is unjustified, it can declare the assignment or sublet to be valid. The Tribunal can also order the lessor to pay damages if you have suffered harm.
When you come to the hearing , bring all relevant documents supporting your application. Summon your proposed assignee or sublessee as a witness: their presence is essential!
Assignment and subletting: Differences
Implications of lease assignment, for the assignor.
You transfer all your rights to the assignee, including the right to maintain occupancy. You are released from all obligations as of the date of the assignment, and therefore do not have to give notice of non renewal of the lease to the lessor.
For the assignee
The assignee is not a new lessee in the eyes of the law, and therefore is not entitled to have their rent fixed by the Tribunal. However, once they become the lessee, they acquire all the rights and obligations of the lease. Since they are also bound by all the terms and conditions of the lease assigned to them, they should obtain a copy of the lease from the assignor.
For the lessor
Once the assignment takes effect, the lessor is bound to the assignee. They must give any notice concerning the lease to the assignee and collect the rent from them. The lessor does not have to sign a new lease with the assignee.
Implications of subletting
For the lessee (sublessor).
As the lessee subletting the dwelling, you remain entirely responsible for all of the obligations of the lease.
Before signing any sublet lease, you should give the sublessee a copy of the building rules, if applicable. You should also include all of your main obligations to the lessor (e.g., no smoking) in the sublet lease or include references to these obligations.
As the sublessor, you are also obligated to:
- Ensure that the dwelling is delivered in good habitable condition and in clean condition, and that it is maintained in a good state of repair in all respects
- Provide the sublessee with peaceable enjoyment of the property
For example, if necessary, repairs are not completed, the sublessee could take recourse against you, the sublessor. You would then be responsible for getting the lessor to fulfill their obligations to you.
NOTE: You are still responsible for the lease. If you do not want the lease to be renewed, you must give your lessor notice of non renewal within the appropriate time frame.
In addition, the lessor may decide not to renew your lease if you have sublet your dwelling for more than 12 months (whether consecutive or not). Contact the Tribunal administratif du logement for more information.
For the sublessee
The sublessee is bound by the terms and conditions of the lease they have signed with you, but they do not have the right to maintain occupancy, since you retain the right to return to the dwelling at the end of the sublet.
You also retain the right to terminate your lease in the manner and time provided by law. If you do not renew your lease and the sublessee wishes to remain in the dwelling, they will have to try to sign a new lease with the lessor.
Note: The sublessee is not required to vacate the premises unless they receive 10 days’ notice to vacate from the lessee or lessor. Contact the Tribunal administratif du logement for more information .
Furthermore, as your (their sublessor’s) new lessee, the sublessee is entitled to have the rent fixed by the Tribunal if their rent is higher than the lowest rent paid during the 12 months preceding the sublease or higher than the rent that has already been fixed by the Tribunal.
For this reason, you must give the sublessee the notice to a new lessee specified in the legislation at the time of entering into the lease.
As well, if the lessor fails to perform their obligations, the sublessee may exercise the rights and remedies of the lessee to have them performed.
The lessor retains all their rights and all their obligations to the subletting lessee.
If the sublessee does not fulfill their obligations, causing serious harm to the lessor or other lessees or occupants, the lessor can ask to have the subletting lessee’s lease terminated, or, as is specifically provided for under the law, ask to have the sublet lease terminated.
How do I enter into a lease assignment agreement?
A very simple template for a conditional agreement, entitled Assignment of lease agreement , is available on the Tribunal administratif du logement’s website. We recommend filling out this template before giving the lessor your notice of assignment.
Before signing the agreement, you must provide the assignee with any relevant information you have and let them know if you have received any notice from the lessor+, such as a notice of rent increase.
How do I enter into a sublet lease?
First, obtain the Tribunal administratif du logement’s mandatory lease form . In the box where the parties are identified, cross out the words “lessee” and “lessor” and replace them with “sublessee” and “sublessor,” respectively, Remember, this lease is conditional on the lessor’s acceptance of the sublet.
Some terms and conditions in the sublet lease may be different from those in the main lease, but they should not contradict the main lease in such a way that the sublessee is given more rights than the lessee already has. For example, if the lessee’s lease states that pets are not allowed, the sublessee cannot be allowed to have pets. However, if the main lease allows pets, the sublet lease can still prohibit them. The same is true for parking spaces and so on.
Notice of assignment [and charge]—Tenant
Published by a lexisnexis property expert, notice of [ assignment or transfer ] [ and charge ].
To: [ insert full name of current landlord ] [ of [ insert address ] OR incorporated in England and Wales with company registration number [ insert company registration number ] whose registered office is at [ address ] ] (the Landlord ) [ , c/o [ insert solicitors’ name ] of [ address ], reference [ insert reference ] ]
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