assignment of the lease agreement

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Lease Assignment Template

Updated October 8, 2024 Written by Josh Sainsbury | Reviewed by Brooke Davis

A lease assignment is a legal document that facilitates the transfer of lease rights and responsibilities from one party (the assignor) to another (the assignee). It ensures clarity, legal enforceability, and efficiency by including critical details such as lease type, property location, and information on the assignor, assignee, and landlord, along with the original lease term and transfer start date.

Obtaining landlord consent is crucial in this process. A well-crafted lease assignment template can protect all parties’ rights, streamline the process, and prevent future disputes.

Essential Clauses in a Lease Assignment

To create a comprehensive lease assignment, include these essential clauses:

• Parties Identification: List all parties involved—assignor (original tenant), assignee (new tenant), and landlord.
• Property Details: Specify the property address and relevant details.
• Effective Date: State when the assignment takes effect.
• Rights and Obligations Transfer: Outline the rights and responsibilities being transferred, including rent and maintenance.
• Landlord’s Consent: Include a clause requiring the landlord’s consent for validity.
• Assignor’s Continuing Liability: Clarify any ongoing liabilities for the assignor.
• Indemnification Provisions: Protect the landlord against potential losses from the assignment.

Download: PDF or MS Word

How to Transfer a Lease

Transferring a lease—whether residential or commercial—ensures a smooth legal transition of leasehold interest from the assignor to the assignee. The process may vary by local laws and lease terms but generally involves the following steps:

Step 1: Review the Original Lease Agreement

• Check for Clauses: Carefully read the original lease to identify any clauses related to subletting or assignment. Some leases prohibit or restrict the ability to transfer the lease.
• Understand Conditions: Note any conditions that must be met for a transfer, such as obtaining the landlord’s consent.

Step 2: Obtain Landlord Consent

• Written Request: Write to the landlord asking permission to assign the lease. Include reasons for the assignment and information about the prospective assignee.
• Landlord’s Response: Wait for the landlord’s response. Landlords can refuse to assign the lease, but some jurisdictions may require them to have a reasonable cause for denial.

Step 3: Find a Suitable Assignee

• Screen Candidates: Finding a reliable assignee for residential and commercial leases is essential. Conduct interviews and consider running credit and background checks to ensure they can meet the lease obligations.
• Negotiate Terms: Discuss the terms of the lease assignment with the assignee, including any continuing liability you might have.

Step 4: Draft a Lease Assignment Agreement

• Include Essential Information: The lease assignment should detail the responsibility transfer, including all parties’ identities, the property details, the effective date, and any specific rights and obligations being transferred.
• Landlord’s Consent: The agreement should include a clause for the landlord’s consent, which is crucial for the assignment’s validity.

Step 5: Sign the Lease Assignment Agreement

• All Parties Sign: The assignor, assignee, and landlord should all sign the lease assignment agreement to make it legally binding.
• Keep Copies: Ensure each party receives a copy of the signed agreement for their records.

Step 6: Notify Relevant Parties

• Inform Stakeholders: Notify any relevant parties, such as utility companies or service providers, about the lease transfer. This step might be more pertinent in commercial leases where services and utilities are more complex.

Step 7: Finalize the Transfer

• Transfer Security Deposits: Arrange to transfer any security deposits to the assignee, if applicable.
• Update Lease Records: The landlord may need to update lease records to reflect the new tenant’s information.

Frequently Asked Questions

Why would a tenant assign their lease.

Tenants often opt for a lease assignment to exit their lease obligations before the term ends, especially if they face financial difficulties and the landlord does not permit subleasing. This transfer fully hands over the tenant’s lease to another party.

How Do Lease Assignments Differ From Lease Transfers?

The term “assignment” refers to the legal act of transferring property or rights from one individual to another. In contrast, “transfer” generally means arranging for ownership or control of something to be legally taken over by someone else. 

Can a Landlord Refuse to Assign a Lease?

Yes, a landlord can refuse to assign a lease unless prior consent is obtained. Reviewing your lease agreement for any clauses regarding lease assignment is essential. If it’s not addressed, securing written approval from your landlord to transfer the lease to someone else is crucial.

Who is Liable in a Lease Assignment?

In a lease assignment, the assignee assumes responsibility for adhering to the lease terms, taking over the assignor’s obligations.

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Assignment of Lease: How It Works and Parties Involved

Jump to section, 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 .

Get Help with an Assignment of Lease

Do you have any questions about a lease assignment and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from real estate lawyers who specialize in lease assignment.

ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.

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Assignment of Lease

Contract to lease land from a church?

I’m planning on leasing land from a church. Putting a gym on the property. And leasing it back to the school.

Ok; first step is that you will need a leasing contract with the church. Ask them to prepare one for you so you would just need an attorney to review the agreement and that should cost less than if you had to be the party to pay a lawyer to draft it from scratch. You need to ensure that the purpose of the lease is clearly stated - that you plan to put a gym on the land so that there are no issues if the church leadership changes. Step 2 - you will need a lease agreement with the school that your leasing it do (hopefully one that is similar to the original one your received from the church). Again, please ensure that all the terms that you discuss and agree to are in the document; including length of time, price and how to resolve disputes if you have one. I hope this is helpful. If you would like me to assist you further, you can contact me on Contracts Counsel and we can discuss a fee for my services. Regards, Donya Ramsay (Gordon)

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