How to assign a lease to someone else.
If you are leasing a property such as a home, unit or commercial premises you may come to the point where you no longer wish to use the property but are obligated by the terms of the lease to continue paying the rent. In these situations, you may want to assign the lease to someone else. A lease assignment, though similar to a sub-lease, is a simple agreement you can enter into with someone else so they take responsibility for the lease obligations. But before you do, there are several things you need to know;
WHAT IS A LEASE ASSIGNMENT? A lease assignment is an agreement where the current lessee (the person responsible under the lease) enters into an agreement with a new party (called the assignee) whereby the assignee essentially agrees to take on the duty 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 responsibilities under the original lease.
WHEN CAN I USE A LEASE ASSIGNMENT? You can potentially 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 potentially assign the rights and duties under the lease to a third party in almost any situation. You may or may not have to first get the lessor’s permission before entering into an assignment of lease agreements, but that depends upon the terms of the underlying lease.
HOW DO I ENTER INTO A LEASE ASSIGNMENT? A lease assignment should be entered into in writing. It should state 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 an assignment of a real estate lease 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 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 and signs it.
Assigning real-estate or property leases to other people can be a very useful tool in the right situations. Whether you want to travel, are forced to re-locate for a new job, or just simply don’t want to obligated under the lease any more, you can use lease assignments to your benefit. But in order to do so, you’ll need to plan ahead and make sure your lease assignment is sufficiently precise. You first want to ensure you are protected, and drafting a lease assignment that covers all the important points is the best way to allow you peace of mind.
Assignment of Lease Agreement (real estate)