A sublease is a lease agreement wherein the Lessee transfers less than all of his rights to a sub-lessee to use and enjoy the premises while retaining the right to re-enter or re-take the premises. For example, when a lessee “sub-lets” a portion of the premises to a “sub-lessee”, the “master tenant” retains the right to retake the property under certain conditions.  However, the master tenant remains obligated to pay rent to the landlord as provided for in the lease agreement.  The master tenant is also responsible for the sub-lessee’s acts as tenant that may breach the lease agreement.

An assignment is the transfer of all remaining interests in the lease to a third party, called the “assignee”.  For a landlord, an assignment usually entails giving your right to receive rent from your tenant to the assignee, typically a creditor.

Many leases bar tenants from assigning or subleasing the lease.  This is due primarily to landlords wanting to maintain control over who occupies and makes rent payments. Some leases allow assignments and subleases only when the landlord consents.

In most instances, the landlord can’t enforce the lease provisions against the assignee or subtenant unless the subtenant or assignee agrees through an assignment or sublease agreement or some other separate agreement, to assume the assigning tenant’s obligations under the original lease.

It is important to remember, that an assumption agreement does not release the assigning tenant from his or her obligations under the master lease unless the original landlord expressly agrees to such a release.  Preferably in writing.

Under any residential lease, the tenant has the obligation to pay lease payments. After a sublease or assignment is made, the tenant remains obligated, even if there was an assumption agreement. If the landlord releases the tenant, the landlord cannot then look to the tenant for rent payments if the subtenant or assignee fails to pay the lease payments.

 A landlord should obtain an assumption by the assignee/subtenant.  Generally, an assignment of a lease results in the assignee assuming the responsibilities of the original tenant. The original tenant surrenders the right to occupy the premises.  The assignee and the landlord are bound by the lease covenants or promises that run with land, i.e., covenants that benefit the land, such as the covenants to pay lease payments and to make repairs.

Typically, the assignee may not avoid its responsibilities under the lease by assigning the lease to another party. Further, the assigning tenant is liable on the lease, including payment of lease payments, unless he or she was released from those obligations by the landlord

In a sublease, unless the subtenant assumes the obligations of the master lease, there’s no legal relationship between the subtenant and the landlord, and so the subtenant doesn’t have to pay the landlord lease payments and the landlord doesn’t have to respond to the subtenant’s request or demand for repairs.

The landlord-tenant relationship is actually between the original tenant and the subtenant. The original tenant remains liable for rent: the subtenant pays the original tenant, who then pays the landlord. The original lessee must perform all other covenants under the lease.

The sublease should detail how issues reported by the subtenant are handled.   If the subtenant discovers a problem on the premises, the landlord is not obligated to repair it unless the subtenant assumed the lease. In that scenario, the subtenant would notify the original tenant, who would then have to fix the problem or enforce the landlord’s obligation to do so.

Of course, all of the above described agreements should be in writing.  Many problems are avoided when all parties understand what their respective obligations are.