Assignment of Lease
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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 .
Get Help with an Assignment of Lease
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Meet some of our Assignment of Lease Lawyers
Berkson is a dedicated, practical, and detail-oriented attorney licensed to practice in every state court of Oklahoma and the United States Northern and Eastern District Courts. He graduated from the University of Tulsa College of Law with Honors. While there, he received awards for highest grade in trial practice, legal research, and civil procedure. He was also the Executive Notes and Comments Editor for the Energy Law Journal, the official journal of the Energy Bar Association in Washington, D.C. The Energy Law Journal is one of the few peer-reviewed journals in the legal profession. Prior to becoming an attorney, Howard Berkson held executive positions involving a wide range of business and human resources management functions. He has in-depth knowledge of both business and HR practices. During his business career, Berkson negotiated, wrote, red-lined, and disputed contracts. He has answered charges, handled inspections, and supervised audits involving numerous agencies including the Department of Labor, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, and various state agencies. Berkson honed his analytical and writing skills while earning his Bachelor of Arts degree in Philosophy from the University of Washington. He went on to obtain a Master of Arts in Labor and Industrial Relations from the University of Illinois. Berkson’s work can be found in such publications as The Energy Law Journal, Human Resource Management Review and Personnel Psychology. He is a member of Phi Alpha Delta law fraternity and of Phi Kappa Phi honor society.
Travis counsels individuals and businesses on a broad range of complex topics. His practice centers on producing efficient, client-driven results. He concentrates his practice on real estate, construction, and general business matters with an emphasis on assisting clients both before and after problems occur by drafting contracts designed to best position clients to avoid disputes and litigating matters to a final resolution if problems emerge. Born and raised in Oklahoma, Travis is a triple graduate of the University of Oklahoma, having obtained his Bachelor of Arts, Master of Business Administration, and Juris Doctor degrees from OU. Prior to practicing law, Travis managed the finances and business operations of a successful construction supply company for several years. This insight into sophisticated business dealings, contractual issues, and strategic planning makes him uniquely qualified to handle a wide range of legal matters. Travis lives in Norman with his wife, Haley, dogs, Walter and Poppy, and cat, Ernest. Outside of the office, Travis enjoys playing golf and reading.
Anand is an entrepreneur and attorney with a wide-ranging background. In his legal capacity, Anand has represented parties in (i) commercial finance, (ii) corporate, and (iii) real estate matters throughout the country, including New Jersey, Pennsylvania, Delaware, Arizona, and Georgia. He is well-versed in business formation and management, reviewing and negotiating contracts, advising clients on financing strategy, and various other arenas in which individuals and businesses commonly find themselves. As an entrepreneur, Anand is involved in the hospitality industry and commercial real estate. His approach to the legal practice is to treat clients fairly and provide the highest quality representation possible. Anand received his law degree from Rutgers University School of Law in 2013 and his Bachelor of Business Administration from Pace University, Lubin School of Business in 2007.
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I am a corporate attorney with several years of experience with contracts, corporate and business, government projects, and employment law.
Erik has been a practicing attorney in Florida for over a decade. He specializes in employment and real estate contracts. He has represented clients big and small and can assist with any contract issue.
Have been practicing real property and business law in Nevada for over 40 years. No longer handling any litigation, transactional matters only.
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I am a licensed attorney who specializes in business law, personal injury and contracts.
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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.
References: http://www.questbrook.co.uk/commercial_docs/Assignment_of_Commercial_Lease.html http://www.realtown.com/words/assignment-of-lease
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Free Lease Assignment Agreement
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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
- This is an agreement (the "Assignment") to assign a residential lease in real property according to the terms specified below.
- The Assignor wishes to assign and transfer to the Assignee that lease (the "Lease") dated March 3, 2023, 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 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:
- The Lease governs the rental of the following described premises (the "Premises") to the Assignor: ______________________________________________
- Assigned Lease
- The Assignor assigns and transfers to the Assignee all of the Assignor's right, title, and interest in and to the Lease and the Premises, subject to all the conditions and terms contained in the Lease.
- Effective Date
- This Assignment takes effect on March 4, 2023 (the "Effective Date"), and continues until the present term of the Lease expires on March 5, 2023.
- Assignor's Interest
- the Assignor is the lawful and sole owner of the interest assigned under this Assignment;
- this interest is free from all encumbrances; and
- the Assignor has performed all duties and obligations and made all payments required under the terms and conditions of the Lease.
- Breach of Lease by Assignee
- Consent to this Assignment will not discharge the Assignor of its obligations under the Lease in the event of a breach by the Assignee.
- 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 Lease provided the Assignor will pay all accrued rents and cure any other default.
- Governing Law
- 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 South Carolina, without regard to the jurisdiction in which any action or special proceeding may be instituted.
- Miscellaneous Provisions
- This Assignment incorporates and is subject to the Lease, 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 Lease.
- 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.
- All rents and other charges accrued under the Lease 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 Lease after the Effective Date.
- There will be no further assignment of the Lease 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 ________ 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 4, 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:
- Assignment Agreement
- Lease Assignment Form
- Lease Transfer
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:
- The Assignor: this is the tenant(s) listed on the property's current lease (the master lease) who, using the Lease Assignment Form, is transferring their rights and obligations from themselves to another tenant
- The Assignee: this is the tenant who is taking over the original tenant's (the assignor's) rights and obligations
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:
- If a tenant was renting residential property, they may wish to transfer their lease because they need to relocate for work or personal reasons, reduce living costs, increase their living space, or purchase a home.
- If a tenant was renting commercial property, they may want to assign their lease because of company relocation, expansion, downsizing, or seasonal closure.
What is included in a Lease Assignment?
Typically, a Lease Assignment will contain information regarding:
- The type of lease (residential or commercial)
- The property's location
- Details about the assignor, assignee, and landlord
- The original lease term (start and end dates)
- The start date of the lease transfer
- Details about the assignor's continuing liability (i.e. whether the assignor will continue to be liable to the landlord after the lease is assigned to the assignee)
- Lead paint disclosure for residential rentals, if required
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:
- Landlord's Consent to Lease Assignment : this consent is used when tenants need to obtain written approval from their landlord before they assign their lease to a new tenant
- Commercial Sublease Agreement : this agreement is used by commercial property tenants and allows them to rent out all or a portion of their rented property to another tenant
- Residential Sublease Agreement : this agreement allows a residential tenant to rent all or a portion of a leased property to another tenant
- Landlord's Consent to Sublease : this consent is used when tenants need to obtain written approval from their landlord before creating a Sublease Agreement
Frequently Asked Questions:
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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.
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Assignment of commercial lease with landlord consent — How to guide by LegalZoom Staff
Assignment of commercial lease with landlord consent — How to guide
by LegalZoom Staff updated February 06, 2023 · 11 min read
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.
An assignment is the transfer of one party’s entire interest in and obligations under a lease to another party. The new tenant takes on the lease responsibilities, including rent and property maintenance, and the original tenant is released from most (if not all) of its duties.
Successful property management begins with good documentation, and a properly-drafted and executed assignment will ensure that all parties – new and old – understand the obligations that are being transferred and the responsibilities that each will have under the new arrangement. In every way, this lays the foundation for a great (and long-lasting) landlord/new tenant relationship.
2. Dos & don’ts checklist
- An assignment is the complete transfer of one party’s interest in an agreement to a third party. In this case, the original tenant is giving all of his or her interest to a new tenant. That new tenant steps into the shoes of your old tenant, and your old tenant is released from most of his or her obligations under the lease (although this can be changed by agreement). This is not the same as a sublease. Under a sublease, a third party is granted only those specific rights provided in the sublease. The original tenant still remains ultimately liable for residual obligations under the lease, or any failures of the new tenant to meet his or her obligations. This means that the original tenant will be responsible (in equal measure with the new tenant) for any skipped rent payments or damage to the property.
- Be sure the Assignee gets a copy of the original lease. He or she will be bound by its terms, and should know what his or her new obligations and rights are. A copy should be attached to the Assignment as Exhibit A.
- The original tenant cannot assign more rights than it has under the original lease. For example, if the term of the lease is 1 year, the term of the assignment cannot be 2 years.
- Most leases will require the landlord’s written consent before an assignment becomes effective. Review the original lease agreement for additional information, and to see if there are other requirements that must be met to make the transfer valid.
- Although a landlord is not required to consent to a lease assignment, in some cases your lease will state that a landlord’s consent will not be “unreasonably” withheld. This is more common in commercial leases. What is considered unreasonable varies from jurisdiction to jurisdiction and you should review the laws in your area (and the language in your original lease agreement) for additional information. On the other hand, if the lease states that the landlord may use his or her “sole discretion” to evaluate the new tenant, he or she can veto this assignment without any reason.
- Depending on your jurisdiction or the terms of your original lease, a landlord’s failure to respond to your request for consent to assignment within a certain time may itself be deemed consent. In some cases, it may give a tenant grounds to terminate the lease. Review the original lease and your state’s laws for additional details.
- A landlord may consider only proper factors when deciding whether or not to consent to an assignment. Some criteria will be considered impermissible by courts (e.g., refusal is based on race or sex of the proposed new tenant). If your landlord does not consent to your attempted assignment, make sure he or she gives you clear written reasons for the decision. Failure to provide such reasons can itself be deemed unreasonable.
- Sign three copies of the assignment, one for you, the other party, and the landlord.
- Depending on the nature of its terms, you may decide to have the document witnessed or notarized. This will limit later challenges to the validity of a party’s signature.
- State laws governing real estate, renting, leasing, and assignments vary widely, and can have a tremendous effect on your arrangement. In some cases, specific information must be included in the assignment and in others, language must be excluded form your agreement. Review your state and local laws for additional information about what is required in your area.
- If your agreement is complicated, do not use the enclosed form. Contact an attorney to help you draft a document that will meet your specific needs.
3. Assignment of commercial lease (with landlord consent) instructions
The following provision-by-provision instructions will help you understand the terms of your assignment. The numbers below (e.g., Section 1, Section 2, etc.) correspond to provisions in the form. Please review the entire document before starting your step-by-step process.
- Introduction. Identifies the document as an assignment of lease. Write in the date on which the assignment will become effective (often the date on which it is signed). Identify the parties and, if applicable, what type of organization(s) they are. Note that each party is given a name (e.g., “Assignor”) that will be used throughout the agreement. The current tenant is called the “Assignor,” because he or she is the person who is assigning the interest. The new tenant is called the “Assignee.”
- Recitals. The “whereas” clauses, referred to as recitals, define the world of the agreement and offer key background information about the parties. In this Assignment, the recitals include a simple statement of the parties’ intent to assign the Assignor’s interest in the Lease and the Assignee’s intent to assume it. Provide a brief description of the property being rented, and the name of the landlord under the Lease. Attach a copy of the Lease to the Assignment as Exhibit A. Describe the property that is being assigned. You don’t need to include a full legal description, but provide enough information so it can be clearly identified. For individual houses, the address will usually be sufficient. If the property has a specific name (e.g., “Lincoln Towers”), include that as well. If only a section of the Premises is being assigned, make that clear in this description.
- Section 1: Assignment. The Assignor’s assignment of its right and interest in the Lease to the Assignee. This paragraph allows you to determine whether all of the Assignor’s interest in the Lease is being assigned, or only part of it. For example, if interest in only one half of the Premises is being assigned, this should be clearly noted in the space provided. Delete the bracketed phrase that does not apply to your arrangement.
- Section 2: Assumption of rights and duties. Provides that the Assignor is no longer responsible for the duties listed under the Lease (e.g., rent, maintenance of property, etc.). There are two options provided regarding the continuing liability of the Assignor. In the first, the Assignor is completely released from any liability it had under the Lease. If the Assignee defaults, for example, the Landlord cannot seek payment from the Assignor. In the second, the Assignor will be liable to the Landlord if the Assignee defaults. Select the option that best suits your arrangement, and delete the other. Note that, in any event, the Assignor will remain responsible for any obligations that occurred before the assignment. In other words, if damage happened to the apartment before the transfer, or if the Assignor did not fulfill another obligation under the Lease, the Assignor remains responsible.
- Section 3: Reimbursement. In many rental relationships, amounts are paid in advance or deposited as security for the landlord. At the end of the lease, this money (with deductions subtracted or interest added) is returned to the tenant. If a lease interest is assigned, the lease does not end and the assigning party cannot get this money back. This paragraph requires the Assignee to pay those amounts to the Assignor, and any later return of that money by the Landlord will be made to the Assignee.
- Section 4: Indemnification. The Assignee’s promise to bear the financial cost of any injury the Assignor suffers as a result of its assignment, and any lawsuits that may arise from its activities on the Premises. Note that there is an exception carved out for things done by the Assignor before the Effective Date of the Assignment – the Assignor remains responsible for those actions.
- Section 5: Continuing effectiveness of lease. Emphasizes that except for the assignment, the original terms of the Lease are still effective.
- Section 6: Assignor’s representations and warranties. Lists the Assignor’s promises under the Assignment. Note that this is not a detailed list of services to be provided. Rather, this is the Assignor’s assurance that the Lease and the rental interest it’s providing is useful (i.e., no one else lives or has an interest in the place, the lease is still in effect, the Assignor is not behind in rental payments, etc.). If there are additional representations you think the Assignor should be making, feel free to include those here.
- Section 7: Condition of premises. Notes that the Premises are not being warranted to be perfect or useful in a particular way. Rather, the Assignee is taking the rented property for what it is, and is accepting it in that state.
- (Optional) Section 8: Additional terms of assignment. An optional provision allowing the Assignor and the Assignee to include any representations, warranties, or other provisions particular to their situation. If you remove this section, correct the section numbers and the references in the document.
- Section 9: Interpretation. Provides that both Parties were on equal footing in the negotiation of the consent to assignment. In many cases, contracts are interpreted in favor of the individual who did not draft it. This clause makes clear that both Parties were involved in the drafting, and so the document should not be read in favor of (or against) either.
- Section 10: Notice. Lists the addresses to which all official or legal correspondence should be delivered. Write in a mailing address for both the Assignor and the Assignee.
- Section 11: Modification. Indicates that any changes to the document are ineffective unless they are made in writing and signed by both Parties.
- Section 12: Governing law. Allows the parties to choose the state laws that will be used to interpret the document. Note that this is not a venue provision. The included language will not impact where a potential claim can be brought. Write in the applicable state law in the blanks provided. The governing law will almost always be that of the place where the apartment or rental building is located. It’s generally a bad idea to attempt to use a different location.
- Section 13: Counterparts/electronic signatures. The title of this provision sounds complicated, but it is simple to explain: it says that even if the Parties sign the Assignment in different locations, or use electronic devices to transmit signatures (e.g., fax machines or computers), all of the separate pieces will be considered part of the same agreement. In a modern world where signing parties are often not in the same city — much less the same room — this provision ensures that business can be transacted efficiently, without sacrificing the validity of the agreement as a whole.
- Section 14: Entire agreement. The Parties’ agreement that the document they’re signing is “the agreement” about the issues involved. Unfortunately, the inclusion of this provision will not prevent a Party from arguing that other enforceable promises exist, but it will provide you some protection from these claims.
- Landlord’s consent [and release]. Review the terms of the original lease agreement to determine whether or not the Landlord’s consent is required to make the assignment effective. This is usually the case. If so, have the Landlord sign the document in the space provided. Note that there are two options provided at the end of the consent. You may choose only one of these and should delete the one that you do not use. The first option corresponds to the brackets in Section 2 of the Assignment. If the Assignor will remain responsible under the Lease, even after the Assignment, include this first bracketed language in the consent. For example, if the Assignee doesn’t make rent payments, the Landlord will be able to get these payments from the Assignor. Delete the phrase “and Release” from the title of this paragraph if you choose this option. If the Assignor will not be responsible under the Lease, select the second bracketed phrase, which releases the Assignor from any remaining liability. In other words, the Landlord cannot look to the Assignor for damages or rental payments if the Assignee doesn’t perform any of its obligations under the Lease. If you include this clause, you can keep the bracketed language in the title of the paragraph (i.e., the title will be “Landlord’s Consent and Release”).
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Assignment of Lease Form
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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.
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What Is a Commercial Lease Assignment?
A commercial lease assignment happens when a tenant transfers all of the rights to a lease to someone else but remains liable for rent payments to the landlord. 4 min read
A commercial lease assignment happens when a tenant transfers all of his or her rights to a lease to someone else but remains liable for rent payments to the landlord.
A Tenant's Right to Assign or Sublet a Commercial Lease
Due to difficult financial times, businesses have been forced to downsize.
Often these businesses find themselves in commercial leases for more space than they need. In order to save money, these businesses will consider a commercial lease assignment or subletting the extra space. Both options have pros and cons, but the first step is examining the current lease in order to figure out whether there are any restrictions on assignment or subletting.
Commercial leases are contracts and, as such, are subject to their terms. Thus, the language of the lease will dictate whether or not the tenant is able to assign the lease to someone else or sublet the space.
If a lease doesn't contain any rules against assignment or transfer, then a tenant is allowed to assign or sublet. Unless your lease says otherwise, you do not have to get your landlord's consent to sublet or assign your lease.
Businesses might sublet or assign office or retail space to help with costs or to avoid a penalty if they need to end their commercial lease earlier than their contract stipulates. Sometimes, this may be their only option, regardless of their financial position.
Legal Considerations
When considering your options, you should be aware of the legal differences between assignment and subletting.
There are also several legal and practical aspects to consider when negotiating an assignment or sublease. This includes any legal consequences the tenant may face if the landlord ends the lease.
It is in your best interest to consult an experienced real estate attorney so that you can protect yourself and understand all of your options . Whether you sublet or assign your lease, you will need to find a new tenant. However, there are still differences between the two.
Before subletting or assigning your lease, you should review your lease agreement and talk about your options with your landlord.
It is also important to check your state's laws regarding subleases and assignment because some states require the landlord's consent in order to complete this transfer.
What Happens If I Breach the Lease by Subleasing or Assignment?
Breaching your lease can carry severe consequences, including the following:
- Paying damages to your landlord
- Termination of the lease agreement
What Is an Assignment of Lease?
A lease assignment happens when the tenant transfers all of his or her rights and interest in a lease to another party. Although the new tenant takes on these rights and interests, the assigning tenant is still liable to the landlord.
If the new tenant breaches the lease, the landlord can enforce the terms of the lease on both the new tenant and old tenant. The former, or assigning, tenant is still liable to the landlord according to the original commercial lease agreement.
A lease assignment can also be called:
- A lease transfer
- Assignment agreement
- Assignment of lease
- Lease assignment
Sometimes, a tenant has to leave before their lease is up. In this case, they might be allowed to assign, or transfer, their lease to a new tenant. The old tenant, or assignor, transfers his rights to a new tenant, the assignee.
You can assign both residential and commercial leases. In an assignment, the assignor transfers their lease to a new tenant using a lease assignment agreement. The new tenant then takes the place of the assignor, but the former tenant is still responsible for missed rent checks and damages.
What Does a Lease Assignment Agreement Contain?
A lease assignment agreement is a document that transfers a commercial or residential lease from one party to another. When a tenant needs to break a lease and has a new tenant lined up, they can use a lease assignment agreement.
A lease assignment agreement contains basic information:
- Identifying information
- Assignment start date
- Landlord name
Lease assignment agreements are pretty simple because they reference the original lease. This means that all of the terms in the old lease are automatically included in the new agreement.
A lease assignment agreement transfers the entire lease, whereas sublease agreement does not. Assignments transfer the whole lease from one tenant to another.
The most important thing to know about lease assignment agreements is that they usually need the landlord's permission. If you're considering assigning your lease, you should make absolutely sure that your landlord agrees to the arrangement because you are transferring your lease to a new party.
If you need help with commercial lease assignment, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.
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IMAGES
VIDEO
COMMENTS
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
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
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
An assignment is the transfer of one party's entire interest in and obligations under a lease to another party. The new tenant takes on the
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
An assignment of leases is useful when someone would like the rental space or land that another is leasing and the current leaseholder cannot continue to
A lease assignment allows a tenant to “assign” and transfer the name of the lease, often the tenant, to someone else.
A lease assignment, often called a lease takeover or a lease transfer, is the legal term for when your landlord allows you to pass
A lease assignment agreement is a document that transfers a commercial or residential lease from one party to another. When a tenant needs to break a lease and
Change in corporate ownership: A well-drafted assignment clause will provide that a change in the majority of the stock or the partnership