The terms assigning and subleasing are often used in a commercial leasing context, to refer to when a tenant transfers their rights under a commercial lease to another party.  It is important to understand the distinctions between them and how they might be relevant in different situations.

Assigning a Lease

If a tenant wishes to move premises prior to the expiry of their lease, or if they have sold the business that is trading out of those premises, they would generally need to assign their lease to a new tenant.  This essentially means the new tenant takes over the lease.

Important things to be aware of when assigning a lease are:

  • You cannot assign a lease without landlord’s consent.  The landlord is entitled to ask for financial information about the in-coming tenant as part of deciding whether to consent, but cannot arbitrarily withhold consent.
  • The original tenant (the ‘assignor’) remains liable for the obligations under the lease for the rest of the term of the lease (including any renewals contemplated by the lease).


A sublease differs from an assignment in that the original tenant (the “head tenant”) continues to be responsible for all lease obligations, but under a Deed of Sublease the subtenant occupies the premises and pays to the head tenant a contribution towards the rent (often a specific portion of a total area marked out on a floor plan).  Often subleases will only be for part of the whole premises.

Important things to be aware of when subleasing are:

  • As with an assignment, you generally cannot sublet a premises without the landlord’s consent.
  • The head tenant remains liable to the landlord for the entire premises, even if only a portion has been subleased. If a subtenant fails to make payments, the head tenant will need to cover the rental or risk being in breach of the head lease.   
  • The subtenant must comply with the terms of the head lease as well as their own sublease arrangement, so a subtenant should review the head lease prior to signing.

If you are unsure about your responsibilities under your lease, it pays to take advice from your legal advisor.

Claire Tyler
Commercial Lawyer