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 .

notice of assignment of lease to tenant

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.

Meet some of our Assignment of Lease Lawyers

Travis D. on ContractsCounsel

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.

Justin C. on ContractsCounsel

Justin Camper is a small business and trademark attorney, entrepreneur, public speaker, and writer. Justin has been practicing law close to 5 years and has done various areas of law from criminal work as a Prosecutor, to business and civil litigation at private law firms.

Domonick G. on ContractsCounsel

Domonick G.

I am a licensed attorney who specializes in business law, personal injury and contracts.

Deborah W. on ContractsCounsel

Williamson Health Law is an established and trusted law firm focused on representing hospitals, health plans, physician groups, physicians, physical therapy businesses, psychologists and other health care providers and businesses in all aspects of health law. including the Stark law, the Anti-Kickback Statute (“AKS”), the Health Insurance Portability and Accountability Act (“HIPAA”), regulatory compliance, Medicare and Blue Cross audits and overpayment appeals, payer departicipation and disaffiliation appeals, payer and provider disputes, reimbursement and billing, compliance plans, health care industry contracts and professional licensure. We represent clients throughout Michigan and the U.S. with certain federal matters such as federal regulatory analysis and Medicare audits.

Bolaji O. on ContractsCounsel

Bolaji O. Okunnu is an entertainment lawyer and founder of the Okunnu Law Group, PLLC based in New York, New York. His practice includes work in the area of copyright, trademark, contract, intellectual property and business law. As an entertainment attorney, Bolaji represents a diverse roster of celebrities, record labels, music publishers, artists, bands, entrepreneurs, authors, songwriters, artist managers, record producers and entertainment executives concerning their intellectual property, business affairs and creative assets. He is an expert at solving complex and sophisticated legal and business issues relating to contracts, copyrights and trademarks. With his background in both the law and the music business, he brings a broad perspective to problem-solving and business plan strategies. He also has an extraordinary ability to speak to the hearts of creatives while helping them discover their voice and clarify their creative dreams and assignments.

Matt M. on ContractsCounsel

I love to learn, and I love solving problems. That's why I became a lawyer, and learned to solve legal problems for individuals and businesses and help them fix things when there's a snag. Touch base if you think I could have something to offer for you or your company. Experienced, results-oriented legal professional whose background and education have established him as a valuable resource in areas of corporate law, franchising, litigation, compliance, mortgages and banking, and more. Practice Areas Include: Corporate law, Franchising, Litigation, real estate, corporate law, civil disputes, insurance representation, corporate counseling, dispute resolution, risk management, regulatory counsel, compliance. Experience involves sophisticated as well as routine corporate structuring and transactions, simple and complex litigation, and written and oral advocacy such as depositions, mediated settlement conferences, trials, appeals, written pleadings and discovery, and case strategy and analysis. Experience managing and litigating disputes between parties and negotiating settlements across the spectrum of civil litigation, including probative discovery, successful motions practice, legal research and writing, appellate practice, and legal consultation to individuals and business entities. Further experience includes digesting and monitoring updates to the legal landscape to advise clients or departments and successfully adapt policies and procedures to assure compliance with applicable laws and regulations as well as to manage risk effectively. For those needing a skilled commercial or corporate lawyer, or for individuals whose rights need persuasive advocacy, I am a valuable resource. Representative work also has involved success on the appellate level, as in Baker Construction Company, Inc. v. City of Burlington and Hawthorne, LLC, North Carolina COA09-13.

Madeline P. on ContractsCounsel

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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.

notice of assignment of lease to tenant

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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ASSIGNMENT OF LEASE AGREEMENT

WITH NOTICE OF ASSIGNMENT

FOR VALUE RECEIVED, the receipt and sufficiency of which are hereby

acknowledged, the undersigned,_______________________ , “Assignor”, Lessor of that certain lease agreement described below, does hereby grant, bargain, sell, convey and assign unto __________________ , “Assignee”, all his/her right, title and interest in and to said Lease Agreement. The monthly rental payments as provided in said lease agreement are __________________ per month with the next payment being due on the ____ day of ____________ , 20____.

Lease Agreement executed by __________________, “Lessor”, and _________________________, “Lessee”, concerning premises located at __________________________________________________, and provided for lease payments of ________________ per month, dated the ____ day of ____________, 20___. Payments commenced on the  ____ day of ___________, 20___  and end at the termination of the lease on the ____ day of _____________, 20____.

Assignee is further assigned all rights and obligations of Lessor in the Lease subject to the laws of the State of _____________ relating to Landlord’s and Tenants. Assignee is only acquiring the rights of Lessor during the term of the lease assigned and all rights in the real estate, including ownership of same, is retained by Assignor.

NOTICE OF ASSIGNMENT

Lessee,_______________________ , of said Lease Agreement is hereby advised that the above referenced Lease Agreement has been assigned to ______________________, Assignee, and Lessee is hereby directed to make all future rental payments to Assignee at the following address:

________________________________

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed on this the ____ day of _____________ , 20____ .

___________________________

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Lease Assignment Agreement

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Lease Assignment Agreement

Rating: 4.9 - 137 votes

A Lease Assignment Agreement is a short document that allows for the transfer of interest in a residential or commercial lease from one tenant to another. In other words, a Lease Assignment Agreement is used when the original tenant wants to get out of a lease and has someone lined up to take their place.

Within a Lease Assignment Agreement, there is not that much information included, except the basics: names and identifying information of the parties, assignment start date, name of landlord, etc. The reason these documents are not more robust is because the original lease is incorporated by reference , all the time. What this means is that all of the terms in the original lease are deemed to be included in the Lease Assignment Agreement.

A Lease Assignment Agreement is different than a Sublease Agreement because the entirety of the lease interest is being transferred in an assignment. With a sublease, the original tenant is still liable for everything, and the sublease may be made for less than the entire property interest. A Lease Assignment transfers the whole interest and puts the new tenant in place of the old one.

The one major thing to be aware of with a Lease Assignment Agreement is that in most situations, the lease will require a landlord's explicit consent for an assignment. The parties should, therefore, be sure the landlord agrees to an assignment before filling out this document.

How to use this document

This Lease Assignment Agreement will help set forth all the required facts and obligations for a valid lease assignment . This essentially means one party (called the Assignor ) will be transferring their rights and obligations as a tenant (including paying rent and living in the space) to another party (called the Assignee ).

In this document, basic information is listed , such as old and new tenant names, the landlord's name, the address of the property, the dates of the lease, and the date of the assignment.

Information about whether or not the Assignor will still be liable in case the Assignee doesn't fulfill the required obligations is also included.

Applicable law

Lease Agreements in the United States are generally subject to the laws of the individual state and therefore, so are Lease Assignment Agreements.

The Environmental Protection Agency governs the disclosure of lead-based paint warnings in all rentals in the States. If a lead-based paint disclosure has not been included in the lease, it must be included in the assignment. Distinct from that, however, required disclosures and lease terms will be based on the laws of the state, and sometimes county, where the property is located.

How to modify the template

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At the end, you receive it in Word and PDF formats. You can modify it and reuse it.

A guide to help you: Tenants and Subtenants Obligations under a Sublease Agreement

Other names for the document:

Assignment Agreement for Commercial Lease, Assignment of Commercial Lease, Assignment of Lease, Assignment of Residential Lease, Assignment Agreement for Lease

Country: United States

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Free Landlord's Consent to Lease Assignment

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Landlord's Consent to Lease Assignment

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transfer lease

When the Tenant rents the property to someone else, it's known as subletting. Use a  Consent to Sublease to obtain the Landlord's consent to sublet the property.

Your Landlord's Consent to Lease Assignment

LANDLORD'S CONSENT TO LEASE ASSIGNMENT

THIS CONSENT TO LEASE ASSIGNMENT (the "Consent") dated this ________ day of ________________, ________ BETWEEN:

_________________________ (the "Landlord") AND _________________________ (the "Assignor") AND _________________________ (the "Assignee")

  • The Assignor entered into a lease (the "Lease") with the Landlord on May 6, 2024 with respect to the following premises (the "Premises"): __________.
  • The Assignor has assigned or will be assigning (the "Assignment") all of its rights and obligations under the Lease to the Assignee starting from May 6, 2024 until the end of the term of the Lease.

IN CONSIDERATION OF the Landlord consenting to the Assignment, the Assignor transferring all of the Assignor's rights and obligations under the Lease, and the Assignee agreeing to assume the Lease and all of the obligations of the Assignor under the Lease, the parties agree to keep, perform and fulfill the promises, conditions and agreements below:

  • CONSENT TO ASSIGNMENT
  • The Landlord consents to the Assignment and the transactions contemplated by that Assignment.
  • The Landlord's consent to the Assignment will not be deemed to be a consent to (i) the terms of the Assignment, (ii) any further assignment of the Premises, (iii) any assignment of any other portion of the Premises, or (iv) the assignment of any portion of the Premises to any other assignor or on any other or different terms than those stated in the Assignment. The Assignor will provide the Landlord with a fully executed copy of the Assignment promptly after execution.
  • LIABILITY OF ASSIGNOR
  • The Assignor acknowledges that the Landlord's consent to the Assignment will discharge the Assignor of its obligations under the Lease in the event of a breach by the Assignee.
  • ASSUMPTION BY ASSIGNEE
  • The Assignee acknowledges that it has agreed or will agree to assume all of the applicable obligations and responsibilities of the Tenant under the Lease starting from May 6, 2024 until the end of the Term of the Lease.
  • BINDING EFFECT
  • This Consent will be binding on and will inure to the benefit of the Landlord, the Assignor, the Assignee and their respective heirs, executors, administrators and successors in interest and assigns.
  • ASSIGNMENT AND SUBLETTING
  • The Assignee will not sublet, transfer, or further assign the Premises or any part of the Premises without the prior written consent of the Landlord.
  • GENERAL PROVISIONS
  • In the event of any legal action concerning this Consent, the losing party will pay to the prevailing party reasonable attorney's fees and court costs to be fixed by the court and such judgment will be entered.
  • This Consent will not be valid and binding on the Landlord, Assignor and Assignee unless and until it has been completely executed by all of the parties.

IN WITNESS WHEREOF the Assignor, the Assignee and the Landlord have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.

Last Updated October 16, 2023

Landlord's Consent to Lease Assignment Information

What is a landlord's consent to lease assignment.

With a Landlord's Consent to Lease Assignment, landlords and property managers can give formal approval to tenants who wish to exit their lease agreement and transfer it to a new tenant before the rental term is complete.

In most cases, a tenant must have their landlord's approval before assigning their rights and responsibilities to a new renter and being free of all liabilities.

By obtaining a Landlord's Consent to Lease Assignment, tenants can properly and professionally transfer their entire interest in a lease while ensuring that landlords and property managers can continue to operate their rental property smoothly.

Why do I need the landlord's consent to assign my lease?

Without the proper consent, a landlord is likely to consider an assignee (i.e. the new tenant) to be an unauthorized occupant of the property. In this case, landlords often have the option to evict or remove the unauthorized occupant, terminate the original lease agreement, and hold the original tenant liable for any breached lease terms. However, keep in mind that in this situation landlord rights may vary by state .

Generally, landlords can only refuse consent under reasonable circumstances—a subjective term that courts may define based on the facts of a particular situation. In some states, a tenant may have the option to terminate their lease early if their landlord unreasonably withholds consent to a lease assignment.

If a tenant believes their landlord unreasonably withheld consent , they may be able to seek legal remedies such as filing a claim for damages or getting a court order for consent to be given.

How does transferring a lease work?

Tenants should first check the original lease agreement for clauses that specify how an assignment can take place. In addition, it's important to research how local landlord and tenant laws may affect the enforceability of a Lease Assignment Agreement.

The next step is asking the landlord for consent. With LawDepot's Consent to Lease Assignment template, tenants provide landlords with all of the necessary information to transfer their interest in a lease, including:

  • Information about the original lease
  • The name of the new tenant (i.e. the assignee)
  • The date the assignee takes over the lease

In this agreement, the landlord may also specify whether or not they release the original tenant from all liabilities. Once the landlord signs the consent form to show approval, the tenant can proceed with drafting or executing a Lease Assignment Agreement .

Who prepares the Lease Assignment Agreement?

The original tenant should prepare the Lease Assignment Agreement because the contract is between the assignor and the assignee. The landlord is not a party to this agreement.

The original tenant should attach the Landlord's Consent to Lease Assignment to the Lease Assignment, along with a copy of the original lease.

What is the difference between subletting and assigning a lease?

A lease assignment is where a new tenant takes over a lease, while subleasing is where an original tenant creates a new lease with a subtenant.

With a sublet agreement, the landlord may still consider the original tenant liable for upholding the terms of the lease. For example, if a subtenant misses one month's rent, the original tenant is still responsible for paying the landlord on time.

With an assignment, the landlord can choose to release the original tenant from all liabilities. So, if the new tenant misses a rent payment, the landlord would not seek payment from the original tenant but from the new tenant.

Related Documents:

  • Lease Assignment Agreement : transfers a tenant's entire interest in and obligations under a lease to a third party, who then assumes the rights and responsibilities of the original agreement
  • Landlord's Consent to Sublease Agreement : provides a landlord's formal, written approval to a tenant who wishes to sublease their rental property
  • Commercial Sublease Agreement : allows a tenant to transfer their remaining rights and obligations under a commercial lease to a subtenant, without breaking the original lease
  • Residential Sublease Agreement : allows a tenant to transfer property rights and obligations to a subtenant for some of their residential lease term, without breaking the original agreement

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How To Properly Document Changes to a Lease Agreement

Last reviewed or updated 06/08/2023

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Why is it important to document lease changes?

A lease is a legally binding contract between a landlord and one or more tenants. If there's ever a dispute, the judge will go by the written lease unless there's evidence that the lease was changed. For example, a lease might say no pets but the landlord verbally allowed the tenant to bring home a dog. If the landlord later tries to evict the tenant for violating the no pets provision of the lease, it's the tenant's word against the landlord's and the signed lease. Or, one party might say there was a verbal change when there wasn't. That's not a position you want to be in. Even if you both agree now and you don't think it will be a problem, get it in writing, and signed, just to be sure.

How do I make changes to my lease?

There are two main ways to change a lease.

  • You can replace the lease with a new lease.
  • You can sign an amendment to the original lease.

Signing a new lease is just like starting from the beginning. The landlord and tenant write up and sign a completely new lease covering all of the new terms, if any, that they are agreeing to. This will often be mostly the same wording of the original lease with a few terms added or removed, but the original lease will no longer be valid if you've replaced it. That applies even if a term from the original lease wasn't considered by the new lease. To show that you're canceling the original lease and putting a new lease into effect, you'd want to include language that both parties agree to cancel the original lease.

You can also agree to sign a Lease Amendment . This is often called an addendum, and gets attached to the original lease. It is important that both the landlord and tenant sign a document stating that they intend to make a specific change to an existing lease. For example, the original lease might say no pets. The landlord might agree to allow the tenant to have a dog if they pay $50 per month in pet rent. If the landlord and tenant sign a Pet Addendum to that effect, all the original terms of the lease remain in effect except the no pets provision, which gets replaced by the addendum.

How do I add a pet to my lease?

It's pretty common for a tenant who didn't have pets when they moved in to want to bring one home. Landlords, of course, may have concerns about damage or disturbing other tenants. Whether you agree to sign a new lease or add a Pet Addendum , consider including these terms:

  • Types of pets allowed.
  • Additional refundable or nonrefundable deposit.
  • Number of pets.
  • Size and type restrictions.
  • Requiring individual pets to be on the lease.

How do I sublease or add another tenant to my lease?

Most leases require any additional tenants to be on the lease and often limit a tenant's right to sublease their space. That's because a landlord usually doesn't want anyone who hasn't passed their screening process to obtain tenant rights. In this case, amending a lease  to add a new tenant may be the right way to accomplish this change. Some areas may have restrictions on charging additional rent for an additional person. Landlords usually want the new tenant to complete a full application with a credit check and background check before agreeing to add them.

How do I assign my lease to someone else?

When a tenant wants to leave their rental early, assigning the lease to someone else usually helps them avoid or reduce the financial penalties for breaking their lease. The advantages to the landlord include continuous payment of rent, avoiding the hassle and expense of finding a new tenant, and the acquisition of a potentially longer-term tenant. Unlike a sublease, an assignment means the new tenant takes on all rights and obligations of the lease and the old tenant is no longer responsible. A Lease Assignment  might include the following terms:

  • A release of the old tenant from their lease in exchange for the new tenant signing a lease.
  • Any financial responsibilities of the old tenant, such as paying for a reduction in rent given to the new tenant.
  • Whether the landlord keeps the old tenant's security deposit or gets a new deposit from the new tenant.
  • The date of the transfer.

How do I cancel my lease?

Landlords and tenants can offer the option to cancel a lease early. Both tenant and landlord must agree for this to be a viable option. For example, the tenant may want to move and the landlord can easily find a replacement tenant. Both parties would sign an Agreement to Cancel Lease document stating the new end date for the lease, plus any prorated rent or early termination fees.

Changing a lease affects important legal rights for both the landlord and the tenant. Rocket Lawyer lease documents are vetted by lawyers and legal staff, so you can use them with confidence. If you have more questions or want to make sure you're doing it right, reach out to a Rocket Lawyer network attorney  for affordable legal advice.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer .

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Transfer Of Lease To New Owner Form

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Assignment of leases and rents form form rating, assignment of lease agreement form popularity, landlord assignment of lease form other form names, lease assignment agreement faq, can leases be assigned.

An assignment of a lease is a complete transfer of the right to be the tenant under the lease. The third-party assignee becomes the "tenant" under the lease, taking over all of the leased premises, substituting for the old tenant.

What does assignment by lessor mean?

Can a lessor assign a lease.

Most often, the lease won't permit assignment without the landlord's approval, but leases often state that the landlord cannot unreasonably withhold consent. As long as you produce a tenant who's shown a history of payment under prior leases and has been a model tenant, a landlord should consent to assignment.

Are leases transferable?

Under a typical lease assignment, you transfer all of your space to someone else for the entire remaining term of the lease, and the new tenant pays rent directly to the landlord.Once your landlord has agreed to allow a full assignment, you'll need to secure what the law so often requires: a piece of paper.

How does lease assignment work?

An assignment of a lease is a complete transfer of the right to be the tenant under the lease.This means that the tenant remains liable for monthly rent under the original lease, while collecting rent from the subtenant under the sublease, which may be more, less or the same as the rent due under the main lease.

What is a lease assignment agreement?

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.

Who prepares the assignment of lease?

The landlord's lawyer usually prepares the agreement. However, the outgoing tenant or the incoming tenant pays these costs, not the landlord.

Who pays for assignment of lease?

There is an agreement about who is liable for the costs of the deed of assignment. The landlord's lawyer usually prepares the agreement. However, the outgoing tenant or the incoming tenant pays these costs, not the landlord.

Can a landlord refuse to assign a commercial lease?

Can the landlord refuse consent to an Assignment? Most leases will say that the Landlord cannot unreasonably withhold consent. According to section 19 (1A) of the Landlord and Tenant Act 1927 the landlord can insert conditions in the lease, which need to be met in the case of an assignment.

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Assign to a new tenant

Question & Answer

Another legal way to move out early is to assign your place to a new tenant.

Assigning means that the new tenant replaces you and takes over your rental agreement. The amount of rent and all other details of the agreement stay the same. You are not responsible if the new tenant causes damage or owes rent. But when you assign, you do not have the right to move back in later.

You must ask your landlord for permission to assign. It is best to ask in writing and keep a copy of your request. Your landlord must answer within 7 days.

If your landlord agrees to let you assign, they are allowed to charge you a fee. The fee can't be more than your landlord had to spend on things like a credit check, and advertising if the landlord found the new tenant.

Your landlord can refuse to let you assign to a particular person if there is a good reason. For example, if the person caused problems for a landlord in the past, such as damaging property or not paying rent.

Write a letter asking to assign

Use this tool to write a letter to your landlord asking if you can assign your unit.

If your landlord won’t let you assign to anyone

If your landlord won't let you assign at all or does not give you an answer within 7 days, you can move out with 30 days' notice .

To do this, give your landlord a Tenant’s Notice to End the Tenancy (Form N9) no later than 30 days after you asked for permission to assign.

In this situation, the usual rules about the timing of your notice do not apply. You can choose any termination date , as long as it is at least 30 days after the day you give your landlord the notice.

You can mail or fax the notice, or give it to your landlord in person. You can also give the notice to your landlord's agent. An agent can be someone who works for your landlord, for example, the superintendent or someone who works in the property manager's office.

NOTE: If you mail the notice you must do this 5 days before the day you need to give it to your landlord.

You might not have a right to assign if you live in

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  • housing provided by a school where you work or are a student

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Assigning Your Lease

When you assign a lease, you move out permanently and a new tenant moves in for the remainder of the lease term. An assignment of a lease differs from a sublet. With a sublet, the original tenant gives up an apartment temporarily. With an assignment, the original tenant gives up the apartment permanently . 26

The person to whom you assign your lease is referred to as the "assignee." Both you and the assignee remain responsible to the landlord for the obligations contained in the lease. 27 As the original tenant, you can escape such responsibilities only if the landlord clearly releases you from them. 28

To be valid, an assignment must be in writing. 29 While your lease may say that you need the landlord's permission to assign, many leases also state that the landlord cannot unreasonably deny her consent. If this is the case, the landlord cannot unreasonably deny you permission to assign. 30

Where a lease does not specifically prohibit a landlord from unreasonably denying consent, she can deny her consent for any reason. If a lease forbids assignment, you assign anyway, and the landlord objects to it, the landlord can terminate your lease. 31 If you then move out, the landlord will have a duty to make reasonable efforts to find a new tenant. If the landlord attempts to sue you for any rent or costs she has incurred because of your breach of the lease, you can argue that you had a person willing to take over the lease who could have paid the landlord the rent. Also, even if you do not get the landlord's permission before assigning the lease, if the landlord knowingly accepts rent from the assignee, then she is probably required to accept the assignment. 32

If you are moving out, you should also arrange with the landlord to get your security deposit back if you paid one. See Chapter 3: Security Deposits and Last Month's Rent .

26 . Marcelle, Inc. v. Sol & S. Marcus Co. , 274 Mass. 469, 472 (1931) .

27 . Dwyer v. Lavigne , 319 Mass. 26 (1946) , cases cited therein, and Carlton Chambers Co. v. Trask , 261 Mass. 267 (1927) .

28 . Walker v. Rednalloh Co. , 299 Mass. 591 (1938) ; London v. Grossman , 21 Mass. App. Ct., Dec. 91 (1961); and General Properties, Inc. v. Gallo , 19 Mass. App. Ct., Dec. 188 (1960).

29 . G.L. c. 183, §3 .

30 . If a court finds that the landlord did unreasonably deny consent to the assignment, the original tenant is not liable for the rent. Adams, Harkness & Hill, Inc., v. Northeast Realty Corp. , 361 Mass. 552, 557 (1972) . However, where a lease does not specifically prohibit a landlord from unreasonably denying consent before assigning or subleasing, the landlord is free to deny consent for any reason. Slavin v. Rent Control Board of Brookline , 406 Mass. 458, 463 (1990) .

31 . Healthco, Inc. v. E & S Assocs. , 400 Mass. 700, 702 (1987) .

32 . Maybury Shoe Co. v. Izenstatt , 320 Mass. 397 (1946) .

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notice of assignment of lease to tenant

Assignment Of A Lease: Everything You Need To Know! 📃

Sep 04, 2023 | Shakeel Mir

There are are plenty of reasons why you might want to exit your commercial lease early. Perhaps your current premises are no longer suitable for the needs of your growing business, or maybe your business is in financial difficulty and you need to find a lease with more favourable terms.

There are also plenty of options when it comes to deciding how to exit a lease before the specified end date. Some of the most common include: assignment of a lease, which involves passing the lease onto another business; terminating the lease, with the help of a break clause if your contract contains one; or subletting your premises and adopting the role of landlord yourself.

Unfortunately, exiting a lease early is not always a simple process. A lease is a legal contract, and if you break it your landlord could take you to court. Opting to pursue a process such as assigning the lease to a new tenant can make exiting a lease early possible, but there are many factors that should be considered before beginning this process.

If you are thinking of trying to leave your lease early, it is advisable to obtain independent legal advice from an appropriately experienced commercial property solicitor before taking any action.

If you require legal advice or assistance on getting out of a commercial lease please call us on 0800 086 2929 , email [email protected] or complete our Free Online Enquiry Form .

In addition to office meetings, we also offer remote meetings via telephone and video conferencing software so can assist you wherever you are based.

What is assignment of a lease?

The process of assignment of a lease is essentially selling the lease to a third party (the “assignee”).

If you are a commercial property tenant, your contract likely contains a clause that allows you to assign your lease to a new tenant. To do this, you will need to find a potential new tenant yourself. Your landlord will expect this new tenant to meet the same expectations they originally set for you, and you will probably need their consent before the assignment can be completed.

While your landlord cannot reasonably withhold their consent for the assignment, they are under no obligation to give their consent if the new tenant doesn’t meet the terms set out in your contract – so it’s wise to be picky yourself about the tenant you select.

There are likely to be restrictions around when and if you can assign your lease specified in your contract. Some common restrictions include not allowing lease assignments if the contract is for a short period, and not allowing the lease to be assigned if the lease is ending within a few years.

Once a lease as been assigned, the assignee will become the new tenant and will be responsible for ensuring compliance with all of the tenant’s obligations in the lease.

What checks will a landlord make before permitting assignment of a lease?

Financial status

Your landlord will want to see evidence – usually in the form of business bank account statements – that the new tenant is in a strong financial position

Statements from previous landlords that the tenant has leased property from will be required to show that the tenant is reliable and doesn’t have a history of missing payments or otherwise neglecting their responsibilities as a tenant

Proposed use of the premises

Your landlord will probably be looking for a new tenant to intend to use the premises in broadly the same way as you have done in the past as the lease will specify what use is allowed.

Likelihood of requesting alterations to the building

As above, your landlord will require advanced notice of any alterations the new tenant may wish to make to the premises, and in some cases written permission in the form of a Licence to Alter will be required. It is likely that they may withhold their consent for assigning the lease to any tenant intending to make large-scale changes depending upon the type of premises involved.

What liabilities will you have when assigning a lease?

It is important to recognise that the assignment of a lease to a new tenant does not automatically exempt you from all liabilities related to that tenancy going forwards. In fact, once the lease assignment is complete you can still be liable should the new tenant miss any payments or otherwise break the terms of their contract.

Exactly what you will be liable for depends on when your lease began. If your lease began before January 1996 you will remain liable for all payments by any subsequent tenants – even if the lease is assigned several more times after you. This is called “privity of contract”.

For leases that began after January 1996, you will be required to sign an Authorised Guarantee Agreement . This means you guarantee payments for the next tenant, but not any further tenants.

Landlords can only claim payments of rent within six months of the money being due, and only after full notice has already been served to the former tenant.

What does lease assignment cost?

On the other hand, if the rent under the new lease is below the market rate, the new tenant may instead want to pay you a premium. If this is the case, you’ll need to make a decision on whether to charge VAT – or “opt to tax” – something that’s worth getting professional advice on.

A final charge to be considered is the cost of this advice. It is highly recommended to involve your solicitor when opting to pursue a lease assignment so as not to inadvertently break the terms of your contract and leave yourself open to court action. You should therefore also factor solicitors’ fees into your calculations when considering the cost of exiting your lease.

How to get out of a commercial lease – what are the alternatives?

Assignment of a lease is not the only way to get out of a commercial lease and depending on your circumstances and the contract you have with your current landlord, it may not always be the best option.

Some alternative ways to get out of a commercial lease early include:

Using a break clause

Some lease contracts include a “break clause” which offers both parties the opportunity to end the lease early in certain circumstances. Read your contract carefully to check if it contains a clause like this, and if it does, what terms and conditions are involved. Any time limits specified in the lease for giving of notice must be strictly followed.

Negotiating a lease exit

If your contract does not include a break clause, your landlord may still be open to you exiting the lease early. You would need to negotiate the specific terms of your exit and your landlord may require a pay-out to offset the inconvenience of having to market the property again.

Compared to lease assignment, negotiating an exit from your lease should provide a clean break with no further liabilities, but we would recommend seeking legal advice to confirm that you were exiting the contract cleanly.

Subletting the premises

A final option to consider when looking at how to get out of your commercial lease early is subletting. If your contract allows it, you can take on the role of landlord by finding and leasing your property to a new tenant.

You can use the rent payments from your new tenant to cover your own obligations, but in return you’ll be expected to take a hands-on role managing the property and dealing with the sub-tenant directly.

Need assistance with assignment of lease?

Exiting a lease early can be a complex process, whether you choose to do so by arranging the assignment of your lease or by one of the other means mentioned above.

Lease assignment is an effective way for tenants to get out of a commercial lease early. However, this can be a slow process and you will incur costs.

Contacting a solicitor at an early juncture is advisable so that you are appropriately advised at the outset of any key considerations and potential pitfalls. For example, even though you are selling the lease, you could potentially remain liable afterwards; this will depend on the age of the lease and whether you have entered into an authorised agreement or not.

Shakeel Mir is the Head of our Commercial Property department and has many years of experience in dealing with lease assignment.  He is based in our Amersham office but assists and advises clients all over the country.  In addition to office meetings, Shakeel offers remote meetings via telephone or video conferencing software so can assist you wherever you are based.

Make a Free Enquiry

If you are considering how to get out of a commercial lease or have any queries relating to any of the issues discussed in this article, please get in touch with Shakeel by calling 0800 086 2929 , emailing [email protected] or completing our Free Online Enquiry Form .

The content of this article is for general information only. The information in this article is not legal or professional advice. If you require legal or professional advice you should obtain independent expert advice from qualified commercial property solicitors such as those within our firm .

Call us 24/7 on 0800 086 2929 , email  [email protected] , or complete our Free Online Enquiry Form to arrange a free, no-obligation discussion and let us explain your legal rights and options.

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Notice of assignment or transfer

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  • Assignments, Variations, Surrenders and Termination - Land and Buildings

This commercial lease assignment is between , an individual a(n) (the " Original Tenant ") and , an individual a(n) (the " New Tenant ").

On or about , the Original Tenant and (the " Landlord ") entered into a lease agreement (the " Lease ").

The Lease covers the commercial property located at ,    , and more particularly described as follows: (the " Premises "). The Premises contains feet of interior floor space.

Under section of the Lease, the Original Tenant is permitted to assign its interest in the Lease, with the consent of the Landlord.

The Original Tenant wishes to assign to the New Tenant its rights in, and delegate all of its obligations under, the Lease, and the New Tenant wishes to accept this assignment.

The parties therefore agree as follows:

1. ASSIGNMENT.

The Original Tenant assigns to the New Tenant of all its rights in, and delegates to the New Tenant all of its obligations under, the Lease. This transfer will become effective as of (the " Effective Date "), and will continue until the present term of the Lease ends.

2. ASSUMPTION OF RIGHTS AND DUTIES.

After the Effective Date, the New Tenant shall assume all rights and duties under the Lease, including the obligation to pay rent under the Lease when it is due. The Original Tenant will have no further obligations under the Lease The Original Tenant will remain bound to the Landlord under the Lease, notwithstanding the assignment . However, the Original Tenant remains responsible for obligations accruing before the Effective Date.

3. REIMBURSEMENT.

On or before the Effective Date, the New Tenant shall pay $ to the Original Tenant, which is the sum of:

  • (a)  The security deposit held by the Landlord under the Lease; and
  • (b)  The rent or other deposits paid in advance by the Original Tenant for any period after the effective date of this assignment.

4. INDEMNIFICATION.

  • (a)  The Original Tenant shall indemnify the New Tenant against any award, charge, claim, compensatory damages, cost, damages, exemplary damages, diminution in value, expense, fee, fine, interest, judgment, liability, settlement payment, penalty, or other loss (a " Loss ") or any attorney's or other professional's fee and disbursement, court filing fee, court cost, arbitration fee, arbitration cost, witness fee, and each other fee and cost of investigating and defending or asserting a claim for indemnification (a " Litigation Expense ") arising out of the Original Tenant's breach of its obligations under the Lease before the Effective Date.
  • (b) The New Tenant shall indemnify the Original Tenant against all Losses or Litigation Expenses relating to the Lease, except if those Losses or Litigation Expenses arise from the Original Tenant's failure to perform its obligations under the Lease before the Effective Date.
  • (c)  The New Tenant shall indemnify the Original Tenant against all Losses or Litigation Expenses attributable to the acts or omissions of the New Tenant or its agents, contractors, or employees with respect to the Premises or any activities on the Premises. This indemnification will survive the termination of the Lease and this assignment.

5. CONTINUING EFFECTIVENESS OF LEASE.

This assignment is made on the understanding that all other terms of the Lease remain in full effect, including the prohibition against further assignments and subleases without the Landlord's express written consent.

6. ORIGINAL TENANT'S REPRESENTATIONS.

The Original Tenant represents that it:

  • (a) has the power and authority to enter into and carry out this assignment;
  • (b)  has not previously assigned its rights under the Lease;
  • (c)  is the lawful and sole owner of the interests assigned under this assignment;
  • (d)  the interests assigned under this assignment are free from all encumbrances;
  • (e)  except for the Landlord and the Original Tenant, there are no parties in possession or occupancy of the Premises or any part of them, and there are no parties with possessory rights on the Premises or any part of them; and
  • (f)  has performed all obligations and made all required payments under the Lease.

7. CONDITION OF PREMISES.

The New Tenant has examined and inspected the Premises and accepts them "as is" and in their present condition with all faults. Except as provided in this assignment, the Original Tenant makes no representations, covenants, or guaranties about the status, nature, or condition of the Lease or the Premises.

8. INTERPRETATION.

In interpreting the language of this assignment, the parties shall be treated as having drafted this assignment after meaningful negotiations. The language in this assignment will be construed as to its fair meaning and not strictly for or against either party.

9. GOVERNING LAW.

  • (a) Choice of Law.  The laws of the state of govern this assignment (without giving effect to its conflicts of law principles).
  • (b) Choice of Forum. Both parties consent to the personal jurisdiction of the state and federal courts in , .

10. AMENDMENTS .

No amendment to this assignment will be effective unless it is in writing and signed by a party or its authorized representative.

11. COUNTERPARTS; ELECTRONIC SIGNATURES.

  • (a) Counterparts.  The parties may execute this agreement in any number of counterparts, each of which is an original but all of which constitute one and the same instrument.
  • (b) Electronic Signatures.  This agreement, agreements ancillary to this agreement, and related documents entered into in connection with this agreement are signed when a party's signature is delivered by facsimile, email, or other electronic medium. These signatures must be treated in all respects as having the same force and effect as original signatures.

12. SEVERABILITY.

If any one or more of the provisions contained in this assignment is, for any reason, held to be invalid, illegal, or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this assignment, but this assignment will be construed as if those invalid, illegal, or unenforceable provisions had never been contained in it, unless the deletion of those provisions would result in such a material change so as to cause completion of the transactions contemplated by this assignment to be unreasonable.

13. NOTICES.

  • (a) Writing; Permitted Delivery Methods.  Each party giving or making any notice, request, demand, or other communication required or permitted by this assignment shall give that notice in writing and use one of the following types of delivery, each of which is a writing for purposes of this assignment: personal delivery, mail (registered or certified mail, postage prepaid, return-receipt requested), nationally recognized overnight courier (fees prepaid), facsimile, or email.
  • (b) Addresses. A party shall address notices under this section to a party at the following addresses:
  • If to the Original Tenant:
  • If to the New Tenant:
  • (c) Effectiveness. A notice is effective only if the party giving notice complies with subsections (a) and (b) and if the recipient receives the notice.

14. WAIVER.

No waiver of a breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this assignment will be effective unless it is in writing and signed by the party waiving the breach, failure, right, or remedy. No waiver of any breach, failure, right, or remedy will be deemed a waiver of any other breach, failure, right, or remedy, whether or not similar, and no waiver will constitute a continuing waiver, unless the writing so specifies.

15. ENTIRE AGREEMENT.

This agreement constitutes the final agreement of the parties. It is the complete and exclusive expression of the parties' agreement about the subject matter of this agreement. All prior and contemporaneous communications, negotiations, and agreements between the parties relating to the subject matter of this agreement are expressly merged into and superseded by this agreement. The provisions of this agreement may not be explained, supplemented, or qualified by evidence of trade usage or a prior course of dealings. Neither party was induced to enter this agreement by, and neither party is relying on, any statement, representation, warranty, or agreement of the other party except those set forth expressly in this agreement. Except as set forth expressly in this agreement, there are no conditions precedent to this agreement's effectiveness.

16. HEADINGS.

The descriptive headings of the sections and subsections of this assignment are for convenience only, and do not affect this agreement's construction or interpretation.

17. EFFECTIVENESS.

This assignment will become effective when all parties have signed it.The date this assignment is signed by the last party to sign it (as indicated by the date associated with that party's signature) will be deemed the date of this assignment.

18. NECESSARY ACTS; FURTHER ASSURANCES.

Each party shall use all reasonable efforts to take, or cause to be taken, all actions necessary or desirable to consummate and make effective the transactions this assignment contemplates or to evidence or carry out the intent and purposes of this assignment.

[SIGNATURE PAGE FOLLOWS]

Each party is signing this agreement on the date stated opposite that party's signature.

[PAGE BREAK HERE]

LANDLORD'S CONSENT  AND RELEASE

As Landlord under the Lease, I hereby consent to this assignment of the Lease, and to the New Tenant's assumption of the Original Tenant's obligations under the Lease, including the obligation to pay rent when it is due. As of the Effective Date, I release the Original Tenant from all liability for obligations (including rent payments) under the Lease However, the Original Tenant remains primarily obligated as tenant under the Lease and I do not waive or relinquish any rights under the Lease against either the Original Tenant or the New Tenant.

EXHIBIT A Attach copy of Lease

Free Assignment of Commercial Lease Template

Transfer your commercial lease to a new tenant smoothly. create an assignment of a commercial lease to clearly articulate the new tenant's rights, responsibilities, and obligations..

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How-to guides, articles, and any other content appearing on this page are for informational purposes only, do not constitute legal advice, and are no substitute for the advice of an attorney.

Assignment of commercial lease: How-to guide

Occasionally, tenants wish 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 enterprises to a third party. 

Whatever the reason, tenants can transfer their original commercial lease to new parties by completing an assignment of the lease.

An assignment transfers one party's interest and obligations under a lease to another party. 

During these tenant transfers, the new tenant takes on the lease responsibilities, including paying rent and property maintenance of the leased premises, and the original tenant is released from most of their duties.

Successful property management begins with good documentation and a properly drafted, executed assignment: 

Ensures that all parties involved understand the obligations being transferred 

Defines the responsibilities that each party will have under the new arrangement 

Lays the foundation for a long-lasting landlord and new tenant relationship 

Important aspects to consider when drafting commercial leases

Laws about the original commercial lease agreement.

State laws governing real estate, renting, leasing, and assignments vary widely and can tremendously affect your arrangement. 

Since the tenant is legally responsible for this document, they must include specific information like financial statements in the commercial lease assignment. Consider your state and local laws for additional information required in your area.

Criteria for commercial landlords in providing consents

A landlord may consider only proper factors when deciding whether or not to consent to an assignment. 

Some criteria will be regarded as impermissible by courts, such as refusal based on race or sex of the proposed new tenant. If your landlord does not consent to your attempted assignment, ensure they give you clear written reasons for the decision. Failure to provide such reasons can itself be deemed unreasonable.

Consequences of not providing consent 

It is essential to seek the landlord’s permission for the proposed transfer of the duties. 

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 specific time may be deemed consent. Sometimes, it may give the assigning tenant grounds to terminate the lease. Review the original lease and your state’s laws for additional details.

Although a landlord is not required to consent to a lease assignment agreement, in some cases, your lease will state that a landlord’s consent will not be “unreasonably” withheld. This is more common in commercial leases than in a residential lease. What is considered unreasonable varies from jurisdiction to jurisdiction, and you should review the laws in your area (and the assignment clause in your original lease agreement) for additional information. On the other hand, if the lease states that the landlord may use their “sole discretion” to evaluate the new tenant, they can veto this assignment without any reason.

Rights of the original tenant

The original tenant cannot assign more rights than the original lease. For example, if the lease term is one year, the assignment term cannot be two years.

Review the lease assignments before signing

Most leases require the landlord’s written consent before an assignment becomes effective. Review the assignment provisions and the original lease agreement for additional information and see if other requirements must be met to make the lease assignment agreement valid.

Get the assignment signed

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. 

Be sure the assignee gets a copy of the original lease by attaching it to the assignment. Its terms will bind them, and they should know their new obligations and rights.

If your agreement is complicated, contact an attorney to help draft a document that meets your needs. 

Key components of a commercial lease assignment 

The following instructions will help you understand the terms of your assignment. 

Introduction 

In this section, identify the parties and, if applicable, what type of organization(s) they are. Write down how the document identifies each party. For example, the current tenant can be addressed as the “original tenant” or “assignor” as they assign the lease to the new tenant, and the new tenant can be called the “new tenant” or “assignee.”

Furthermore, add the date on which the assignment will become effective – when it is signed. 

The “whereas” clauses, referred to as recitals, define the world of the agreement and offer essential background information about the parties. 

In this assignment, the recitals include a simple statement of the parties’ intent to assign the original tenant’s interest in the lease and the new tenant’s intent to assume it. Provide a brief description of the rented property and the landlord’s name under the lease.

You don't need to include a complete legal description for the property description, but provide enough information to identify it. 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 assigned, clarify that in this description. 

This section mentions the assignor’s assignment of their right and interest in the lease to the assignee. This assignment clause 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, the document should note this. 

Assumption of rights and duties

This section clarifies the assignor’s responsibilities for the duties listed under the lease (e.g., rent, maintenance of property, etc.). For example, whether:

The assignor is ultimately released from any liability they had under the lease. For example, if the assignee defaults, the landlord cannot seek payment from the assignor.

The assignor will be liable to the landlord if the assignee defaults. 

In any event, the assignor will remain responsible for any obligations that occurred before the assignment. In other words, if the damage happened to the apartment before the transfer or the assignor did not fulfill another obligation under the lease, the assignor remains responsible for the building occupied.

Reimbursement

In many rental relationships, amounts are paid in advance or deposited as security for the landlord. 

At the end of the lease, this security deposit (with deductions subtracted or interest added) is returned to the tenant. If an entire 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.

Indemnification

In such clauses, the assignee promises to bear the financial cost of any injury the assignor suffers due to its assignment and any lawsuits arising from its activities on the premises. Note that there is an exception for things done by the assignor before the effective date of the assignment — the assignor remains responsible for those actions.

Continuing effectiveness of lease 

Here, emphasize that the original lease terms are still effective to the assignee, except for the assignment.

Assignor’s representations and warranties 

List the assignor’s promises under the assignment. Note that this is not a detailed list of services to be provided. Instead, this is the assignor’s assurance that the lease and the rental interest it’s providing are helpful (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 the assignor should be making, feel free to include those here.

Condition of premises

Here, mention that the premises are not warranted to be perfect or valuable in a particular way. Instead, the assignee is taking the rented property for what it is and is accepting it in that state.

Additional terms of assignment

This optional provision allows the assignor and the assignee to include any representations, warranties, or other provisions particular to their situation. 

Interpretation

This section provides information that both parties were on equal footing in negotiating the consent to assignment. In many cases, a contract is interpreted favorably by the individual who did not draft it. This clause clarifies that both parties were involved in the drafting, so the document should not be read in favor of (or against) either.

Here, list the addresses to which all official or legal correspondence should be delivered. This can be the tenant’s business address or the mailing address for both the assignor and the assignee. 

Modification

This section indicates that any changes to the document are only effective if they are made in writing and signed by both parties.

Governing law

This section allows the parties to choose the state laws used to interpret the document. 

Counterparts; electronic signatures

This section explains that even if the parties sign the assignment in different locations or use electronic devices to transmit signatures (e.g., fax machines or computers), 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.

Entire agreement

This clause mentions that the document parties are 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 can 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. 

Frequently asked questions

What is the purpose of an assignment of lease.

Whether it's because it's time to move to a new space or city, business isn't booming, a company gets sold, or otherwise, sometimes commercial tenants must leave a lease before it ends. And sometimes, they may want to transfer the responsibilities of their lease to someone new. A lease assignment occurs in this case.

Here's the information you'll need to have handy to complete your assignment of commercial lease:

Who the old tenant is : Have their name and contact information ready

Who the new tenant is : Have their information available

What is the difference between an assignment and a sublease?

An assignment transfers one party's interest in an agreement to a third party. In this case, the original tenant gives all their interest to a new tenant. That new tenant steps into the shoes of the old tenant and the old tenant is released from most of their 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 remains ultimately liable for residual obligations under the lease or any failures of the new tenant to meet their 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.

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