Need to know
- Tenants can have someone take over their lease through sublet or assignment.
- With a sublet, the original lease stays in place. Both the original tenant and the new tenant (subtenant) are responsible for obligations to the landlord.
- With an assignment, the new tenant takes over the lease and the responsibilities in it. The original tenant may sign a release that discharges them from obligations to the landlord.
- Before subletting or assigning a lease, the landlord must agree to it.
- There are rules that the landlord must follow when dealing with sublet or assignment.
Sublet
When a rental property is sublet, the original tenant moves out of the rental property and a new tenant (the subtenant) moves in to take their place but the original lease stays in place. Often, the original tenant expects to move back into the unit. For example, students commonly sublet their rental units for the summer from May to August with plans to return in September.
The original tenant is still legally responsible for all of the obligations under the lease and under the Residential Tenancies Act. For example, if the new tenant fails to pay rent, the landlord can collect unpaid rent from the original tenant. The new tenant who sublets is also responsible for lease obligations.
Before subletting, the original tenant must receive the landlord’s consent to sublet the property. The landlord can only refuse the sublet if there are reasonable grounds to do so. For example, if the potential tenant does not pass a credit check, the landlord may refuse to sublet. If the landlord refuses to sublet, they must give the original tenant written reasons for the refusal within 14 days. If the landlord does not respond to a request to sublet within 14 days, the law says the tenant can assume the landlord consents to the request. The landlord cannot charge the tenant a fee for consenting to the sublet.
The original tenant may want to enter into a fixed term agreement with the tenant who sublets the property. The agreement should include all of the obligations from the original lease, which ensures that the new tenant is aware of all of those obligations. The new tenant can either pay rent to the original tenant or, if the landlord consents, pay the landlord directly.
Assignment
Assignment is when a tenant finds someone to take over their lease. It is a good option if a tenant does not plan on returning to the property.
If a tenant finds someone who wants to take over their lease, the tenant must get written permission from the landlord for the assignment. A landlord can only refuse the assignment if there are reasonable grounds to do so. For example, the new tenant refuses to fill out an application form or cannot pay the rent. If the landlord refuses the request, they must give the original tenant written reasons for the refusal.
A landlord must respond to the request to assign within 14 days. If the tenant does not hear from the landlord within 14 days, the law says the tenant can assume the landlord consents to the request. The landlord cannot charge the tenant a fee for consenting to the assignment.
If a tenant gets permission to assign the lease, a release should be signed between the landlord and tenant. A release is a new agreement that discharges the tenant from all their obligations to the landlord. For example, a signed release would protect the tenant from having to pay rent if the new tenant didn’t pay it in the future.
The benefit of assignment is that the tenant is no longer responsible for anything to do with the rental unit once they assign the lease and sign a release.
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June 2023
