Is there really that much difference between a sublease and a lease assignment?
There are basically two different ways to approach transfer of a lease. One is by subleasing, the other by assignment. Each method has advantages and disadvantages.
For a sublease in some states, a landlord may technically have no direct legal relationship with a subtenant and so cannot legally act directly against a subtenant. Theoretically, the landlord must act against the primary tenant who must in turn act against his tenant, the subtenant. However, this issue may depend on the laws of a particular state. In general, however, the primary tenant remains liable on all terms of the lease unless otherwise explicitly released from some or all of them.
If, instead of a sublease, the lease is assigned, then the landlord can act directly against the new tenant assignee because he is the tenant of the landlord rather than of the original tenant. Furthermore, the original tenant can potentially be forced to remain liable on some or all terms of the lease in addition to the assignee. The assignment can even allow the landlord to proceed against the original tenant without proceeding first against the assignee. This can be an important clause because, although the landlord would usually attempt to proceed against both assignor and assignee simultaneously, it allows the landlord to immediately proceed against the original tenant in the event that the assignee cannot be served in any legal action, avoiding any restriction on that action that might be provided by the laws of a specific state or that a judge might mistakenly think exists.
As a summary of key points:
If the landlord permits a sublease:
- Original tenant remains liable to the landlord for the rent.
- Subtenant is liable to the original tenant for rent.
- Original tenant is liable to landlord for rent and for damage caused by the subtenant.
- Lawsuits by either landlord or subtenant against the other for money damages are not allowed.
- Eviction often requires evicting the original tenant who evicts the subtenant.
If the landlord permits an assignment:
- Unless agreed to the contrary, assignee is liable to landlord for rent; assignor is responsible for rent if assignee does not pay.
- Unless agreed to the contrary, assignor is not liable for damages caused by assignee.
- Except as agreed, assignee and landlord are bound by all original lease terms.
- Landlord may sue to evict assignee for any violation of lease terms that would have applied to the original tenant.
- An assignee can sue or be sued by the landlord.