Subletting vs assignment: how to read the clause in your lease

Two ways to let someone else take your place

If you need to leave your rental for a summer, or for good before the lease ends, your lease will probably mention two options: subletting and assignment. They sound alike but work differently.

• Sublet (or sublease): you rent all or part of your home to someone else, usually for a set period. You stay the tenant. The subtenant pays you, and you keep paying the landlord.

• Assignment: you transfer your lease to a new tenant, who takes it over and deals with the landlord directly. You usually move out for good.

British Columbia's government describes a sublet as a tenant allowing "someone else to live there temporarily," and an assignment as when a tenant "permanently moves out and transfers their tenancy agreement to a new tenant." Australian states often call an assignment a "transfer."

Who is responsible after the switch

This is the part people get wrong.

With a sublet, you stay on the hook. California's Department of Real Estate (DRE) says that in a sublease, the original lease "remains in full force and effect" and the original tenant is still responsible for paying the rent. If your subtenant stops paying or damages the place, the landlord will look to you.

With an assignment, you may still be on the hook. The DRE says the new tenant becomes directly responsible to the landlord, but the assignment doesn't release the original tenant unless the landlord explicitly agrees. A full release needs a written agreement between the landlord, you and the new tenant, which the DRE calls a novation.

So before you hand over keys, ask the landlord in writing: "Will I be released from the lease once the assignment is signed?"

What the clause in your lease might say

Lease clauses on this topic tend to fall into four types:

1. Silent. The lease doesn't mention subletting. In California, the DRE says a tenant may sublease or assign unless the lease requires the landlord's consent first. Other places differ.

2. Consent required. The most common type.

Sample clause (fictional): "Tenant shall not sublet the premises or assign this lease without Northgate Property Management's prior written consent."

1. Consent "not unreasonably withheld." This adds a standard: the landlord needs a reason to refuse.

2. Outright ban. "No subletting or assignment." Whether a ban holds up depends on where you live, as the examples below show.

Also look for fees, reference checks on the new person, and limits on short-term rentals. The DRE notes most rental agreements prohibit using a unit as a short-term rental through booking websites, and many local laws do too.

Examples of the rules from official sources

These are examples only. Check the rules for your own state, province or territory.

United States

• California. If a lease requires the landlord's consent but gives no standard, the DRE says it is treated as containing an implied standard that consent "will not be unreasonably withheld."

• New York. The state AG's tenants' rights guide says tenants in buildings with four or more apartments have the right to sublet with the landlord's advance consent. If the landlord refuses on unreasonable grounds, the guide says the tenant may sublet anyway. A landlord who doesn't respond in writing within 30 days of the request (or of any follow-up request for information) is treated as consenting. Tenants in buildings with three or fewer apartments don't have this right. An assignment needs the landlord's written consent. If the landlord unreasonably refuses, the guide says the tenant may be released from the lease.

Canada (outside Quebec)

• Ontario. The guide to Ontario's standard lease says the tenant needs the landlord's permission to assign or sublet, and the landlord "cannot arbitrarily or unreasonably refuse consent."

• British Columbia. The government says tenants need the landlord's written permission to sublet or assign. A landlord can't unreasonably refuse if six months or more remain on a fixed term. Landlords must not charge for considering or consenting to an assignment. Subletting or assigning without written permission can lead to a notice to end the tenancy.

Australia

• New South Wales. The Tenants' Union of NSW, a community legal centre, says the landlord's written consent is needed to transfer or sublet. If the request covers the whole tenancy, the landlord can refuse whether or not that's reasonable. If one original tenant will stay, or you'll still live there while subletting part of it, the landlord must not unreasonably refuse. The landlord can only charge the reasonable costs of giving consent.

How to ask for consent

A clear, written request makes a yes more likely and gives you a record if the answer is no.

1. Read the clause first. Note any required form, notice period or fee.

2. Write to the landlord. Say whether you want to sublet or assign, the dates, and who the new person is.

3. Offer information about the new person. References, proof of income or a rental history help. Some landlords will run their own checks.

4. Ask the key questions listed below.

5. Wait for written consent before anyone moves in. In British Columbia and NSW, consent must be written.

6. Put the sublease in writing. The DRE suggests covering rent, due date, where rent goes, utilities, start and end dates, belongings left behind and house rules. Don't give a subtenant more rights than you have. If your lease bans pets, so does the sublease.

7. Keep copies of everything, and take dated photos before the new person moves in.

Questions to ask your landlord

• Does this lease allow subletting, assignment, both or neither?

• What do you need from me and the new person to consider the request?

• Is there a fee, and what does it cover?

• If you agree to an assignment, will you release me from the lease in writing?

• If I sublet, should the subtenant pay me or you?

When the answer is no

If the landlord refuses, ask for the reason in writing. Some places let you challenge an unreasonable refusal through a tribunal or dispute service. NSW, for example, has a deadline for applying, so don't wait. Contact your local tenancy body to find out your options. If you need to leave anyway, our guide to breaking a lease early explains what leases usually say about early exits.

Check your clause before you ask

EasyToDecode, launching soon, is being built to read your own lease, quote the subletting and assignment clauses word for word, flag fees or conditions you might miss, and draft a consent request you can send. See how it works or join the waitlist to hear when it opens.