When a tenant wants to end a lease agreement before it expires, the landlord may request that they find another tenant to take over the lease. This is called a consent assignment of lease, and requires the agreement of the three parties: the landlord, the initial tenant, and the new tenant.
It is important to put this into writing so that all parties are clear on the transaction and to avoid future misunderstandings and complications. For the initial tenant, a consent assignment can remove their liability for the lease agreement. For a landlord, it informs them of the change and allows them the chance to screen the new tenant and know exactly who they are dealing with.
Your consent assignment agreement should include at least these eight points:
1. The names and addresses of all parties involved. For the initial tenant, this should include their new address. The mailing address for the new tenant should be their current address so you can perform any necessary background and reference checks. The address of the rental property should be included as well.
2. The reason the initial tenant is vacating. Include the impetus for the initial tenant’s exit, such as a job transfer or other need to move to another location.
3. The effective dates of the lease. You need to state how long the new tenant will be bound by this consent agreement. For example, if there are four months remaining on the initial tenant’s lease, this could be the term of the existing lease for the new tenant.
4. The terms of the lease.
5. What you intend to do with the initial security deposit. If the initial tenant has not damaged your property and has fulfilled the conditions for the return of the security deposit, you must return it. This means that your new tenant must provide a new security deposit. If your initial tenant wants to forfeit their deposit so that it will benefit the new tenant, note this in the assignment agreement.
6. A liability statement. How do you want to deal with liability for future lease payments? Should the new tenant only be liable, or do you still want the old tenant to be contigentally liable?
7. Integration clause/whole agreement. As with your written lease agreement, it is important to include a statement that clarifies that the signature of all parties constitutes acceptance of the entire agreement. This can assist you if a new tenant claims that they did not understand a portion of the consent agreement and should not be held liable.
8. The signatures of all parties. You must have the signatures of all parties involved in the consent agreement. It is also important to make sure that all parties date their signature. You may wish to require a witness to the signatures or that it be signed in the presence of a notary public.
Ending a lease does not have to be a difficult situation, nor should it be strained. If your initial tenant has provided you with a replacement for their agreement, they have done the best that they could to fulfill their side of the lease. A consent agreement allows all parties to amicably solve what might be a stressful situation, to the benefit of everyone involved.