When a tenant transfers the rights and responsibilities included in his lease agreement to another party, this is called an assignment of lease. This situation may occur when an individual has to leave town for some reason and cannot maintain the rent on the leased property. Likewise, it may occur when a tenant needs a way out of his lease agreement because of financial hardship. In most places, lease assignment is only legal if the terms of the lease permit it or if the landlord consents to this arrangement.
Often, people confuse a subletting situation with an assignment of lease. These legal arrangements are similar in that they both allow the original tenant a way out of at least some of the responsibilities of his lease. In a sublet, however, the original tenant still retains some of the rights and responsibilities named in his lease. For example, if the new tenant fails to pay his rent, the original tenant may still be required to pay rent to the landlord. With a lease assignment, the new tenant may take on all of the responsibilities the original tenant agreed to, including paying rent directly to the landlord.
When an original tenant signs an assignment of lease, he is essentially transferring possession of the leased property to a new tenant. Unlike in a subletting situation, the original tenant isn’t intending to return to the leased property and take possession of it once more. Additionally, the original tenant doesn't have to fear a lawsuit if the new tenant damages the property or grows unhappy with the agreement. Depending on the terms of the agreement, all of his legal ties to the property may end with the signing of the lease assignment.
The laws regarding lease assignments may vary, depending on the jurisdiction in question. In many cases, however, a person who wants to assign his lease to another party must notify his landlord of his intent before signing an assignment of lease contract. The individual may then advertise the property and interview candidates for taking over his lease.
Once the original tenant settles on a suitable candidate, he may then notify his landlord of his choice. In some places, a landlord may object to a prospective tenant if he has a valid reason for doing so. For example, if the landlord believes the prospective tenant to be financially irresponsible or incapable of paying the rent, he may refuse him. If all goes well, on the other hand, the original tenant signs a lease assignment agreement with the new tenant.