Important to Note
- A tenant must get the landlords written permission to assign a tenancy.
- A landlord does not have to give permission for an assignment.
Understanding Assignments
Assignment is where a tenant transfers their entire interest in a tenancy to a third party. The original tenant then ceases to have any interest or involvement in the tenancy and the assignee becomes the tenant who now deals directly with the landlord and is responsible for the tenancy.
When does an Assignment Happen?
It can occur when a tenant in a fixed term tenancy wants to relinquish and leave the tenancy and no long be responsible for any obligations of the tenancy.
Typically, it arises when a tenant sharing with other tenants on a lease where each tenant is jointly and severally liable wishes to leave the tenancy. In this case the tenancy continues, and the tenant is liable for the rent until an assignment occurs or the tenancy is ended. In practice as each tenant is equally liable the full rent must be paid to the property owner and each tenant is equally responsible.
The new assignee will require 6 months of continuous occupation in the dwelling before qualifying for Part 4 tenancy rights.
Assignment can only take place with the consent of the landlord. Where a landlord refuses an assignment of a fixed term tenancy, a tenant can serve a notice of termination on the landlord. However, this does not apply in a shared tenancy situation if the other tenants are remaining and the tenancy is continuing. The full rent is contractually liable until the tenancy is terminated.
Landlord refuses to allow Assignment
Where a landlord refuses an assignment of a fixed term tenancy, a tenant can serve a notice of termination on the landlord.
Procedure for Landlord willing to allow Assignment
- Meet with tenant and discuss the situation. Explain the process. Confirm that you are willing to allow an assignment subject to the suitability of the applicant tenant vis a vis, ability to pay, and references.
- Due diligence should be done on the prospective assignee. The normal checks and balances should be done.
- Prior to the assignment an inspection should be carried out on the property to ensure that all is in order.
- All being well, photograph prior to the prospective assignee taking possession.
- Take the deposit from the assignee and refund the previous tenant their deposit.
- The replacement tenant will pay the rent in same manner as the previous tenant (in a shared tenancy normally one person collects and forwards to landlord), and this is done in advance.
- Clarification on the rights and obligations under the tenancy should be given to the new tenant.
- A letter of assignment can be signed (sample below), a copy of the lease should also be given or alternatively an addendum can be made to the original lease agreement confirming the assignment and noting the date.
- All parties to the tenancy should be made aware that the new assignee will require 6 months of continuous occupation in the dwelling before qualifying for Part 4 tenancy rights.
Suggested Addendum Wording
(Outgoing tenant) is assigning his/her rights and obligations in this tenancy on the (date) to (Replacement tenant)
Signed: Outgoing tenant date
Signed: Replacement tenant date
Click HERE for Sample Assignment Agreement Form