An assignment of lease is a transaction in which an existing tenant transfers their entire interest and obligations under a lease to a new tenant (the assignee), as opposed to a sublease, which retains the original tenant's ongoing liability. Depending on the landlord's consent terms, an assignment can fully release the original tenant from further lease obligations once the assignee takes over.
Assignment vs sublease liability
| Structure | Original tenant's ongoing liability |
|---|---|
| Assignment (with release) | Released from further obligations once assigned |
| Assignment (without release) | May remain secondarily liable if assignee defaults |
| Sublease | Remains fully liable to landlord under original lease |
What to watch for before committing
Release language specificity
Confirm whether the assignment agreement explicitly releases you from further liability, or whether you remain secondarily responsible.
Landlord consent requirements
Understand the landlord's consent process and any conditions they can impose on approving an assignment.
Assignee creditworthiness
If assigning your lease, understand that a financially weak assignee may make the landlord reluctant to grant a full release.
Recapture rights
Check whether the lease gives the landlord the right to recapture the space instead of approving your proposed assignment.
Use restrictions transfer
Confirm whether the assignee's intended use complies with both the original lease's permitted use clause and any zoning requirements.
Documentation and legal review
Given the significance of transferring lease obligations, ensure proper legal documentation and review before finalizing an assignment.
When you need to know this
- Exiting a lease completely — transferring full lease responsibility to a new tenant rather than remaining liable through a sublease
- Business sale or acquisition — transferring lease obligations as part of a broader business transaction
- Relocating before lease expiration — fully exiting a lease obligation rather than managing an ongoing sublease relationship
- Evaluating exit strategy options — comparing assignment against subleasing or early termination as ways to exit a lease
Frequently asked questions
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