Understanding the difference between subletting and issuing a lease can help you choose which option best matches your requirements and scenario.
Lease assignment and subleasing a rental unit, whether residential or commercial, may both help you generate money from underused rental property. However, one is much more lasting than the other. Understanding the difference between subletting and issuing a lease can help you choose which option best matches your requirements and scenario.
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Lease Assignment
When a tenant agrees to assign a lease, he is effectively handing up all of his rights and duties under the rental agreement and the unit to a third-party assignee. As a consequence, the previous tenant (the “assignor”) must leave the unit and enable the new renter to take over the whole lease.
Please keep in mind, however, that most lease agreements require the original renter to stay liable for the lease’s provisions. This is critical if the new renter breaches the lease agreement or causes property damage. (Do bear in mind that, occasionally, a landlord may in fact free the original tenant from obligation under a transfer of lease). If you are thinking about a lease assignment, it is a good idea to go with permanent assignment so you are not liable for any charges or damages.
Sublease
When a tenant grants another individual the right to occupy a part or the full rental unit for a certain length of time, he is effectively subletting his property. Under the Residential Tenancies Act, all tenants have the right to sublease their rental unit, subject to the landlord’s approval. Although the law states that the landlord cannot be unfair or capricious in refusing permission to a sublease, you must still get your landlord’s written approval to sublease the property before allowing anybody else in.
