Updated January 4, 2023
You just landed a fantastic dream job in another city, or that condo you were waiting for finally came on the market—congrats! But what’s that? You’re two months into a one-year lease?
Before you turn down your dream job or dream home, take a deep breath. Here, we’ll explain how you can transfer (a.k.a. assign or sublet) your lease if you need to move out of your rental home before the end of your contract.
We will touch on the notions of assignment and subletting as well as the implications for your home insurance. Read on to discover how to break your lease—without breaking the rules!
A lease transfer (also called an assignment) allows a tenant to assign their lease to another person, who then becomes the new tenant. Lease transfers allow a tenant to avoid penalties for moving out before their lease expires.
The original tenant (called the lessee) waives their right to return to the home. In this scenario, the original tenant’s rights and obligations are transferred to the new tenant. The new tenant is called the assignee and will pay the same rent as the original tenant.
Assignment is conditional on approval from the lessor (the property owner).
Subletting (or subleasing) is an option for tenants planning on moving out temporarily (for travel, university, or work). Unlike a lease transfer, the tenant remains the lessee, retaining all the rights and obligations of the contract.
However, a sublease allows a new tenant (the sublessee) to move in for a specified duration while the main tenant is away. The sublessee must adhere to all the conditions of the original lease agreement.
Subletting is also conditional on the lessor’s approval.
There are, of course, some exceptions to transferring or subletting your lease.
For example, you cannot assign or sublet if you are a student renting a home at an educational institution or a tenant in low rental housing. You can check out the Tribunal administrative du logement, a Quebec body that specializes in residential lease matters, for specific information about your own situation.
Once you find someone interested in assuming your lease, you and that person (the assignee) need to sign a written agreement, called an assignment of lease agreement. You must then provide the lessor with written notice, called a notice of lease assignment. This must include the name and address of the new tenant, and the expected date of assignment. With the assignee’s consent, you may provide additional information about the prospective tenant as necessary.
The lessor has 15 days from the notice date to inform you if they accept or refuse the agreement. You should make sure that you have proof of the date the lessor received the notice. If the lessor doesn’t respond in the prescribed period, they are presumed to have accepted the agreement.
If the lessor rejects the agreement, they must provide you with a valid reason or reasons. For example, a lessor can refuse an assignee who has a poor payment history or poor references. So, make sure you check out the assignee’s background beforehand to avoid any unpleasant surprises.
If you believe the lessor’s reasons were not valid, you may ask the Tribunal to examine the reasons or terminate the lease. If the Tribunal decides that the lessor’s rejection was unfounded, it can declare the assignment valid.
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The process is the same as above, except you and the sublessee (new tenant) need to sign a Notice of subletting of dwelling. As the sublessor, you should provide the sublessee with a copy of the building rules, if applicable, and inform them of your obligations (such as the smoking policy or quiet hours).
You must also make sure that the home is clean and delivered to the new tenant in good, habitable condition. It’s important you take care of any repairs before the sublessee moves in. Otherwise, they could take action against you. That means you would have to contact the property owner—the last thing you want when you are away from the property!
Remember: even though you will no longer be living in the home, you are still responsible for the lease. You also retain the right to return to the dwelling at the end of the sublease period, providing you give the sublessee 10 days notice to vacate the home.
If you are transferring your lease and have tenant insurance, your tenant insurance is not transferrable to the new tenant. The new tenant will have to buy their own insurance policy. However, you still need to contact your home insurance provider to update your status; you may cancel your policy or transfer it to your new address.
If you are subletting, you will also need to advise your insurance provider of the change. While you maintain the lease, you no longer occupy the home. Some insurance providers won’t write policies for subleases because of the change in risk.
So, it’s essential you reach out to your insurance provider, especially if you are leaving any of your personal property in the subleased home. The sublessee will also need to purchase their own insurance.
No. There is no penalty to transfer your lease or to sublet. You do have to get the lessor’s approval, though.
Yes. A property owner can request the cancellation of the sublease if the sublessee causes serious harm to the building or other residents. That includes late rental payments, too, or excessive noise disturbing the neighbours. The lessor can also request the cancellation of the lease and demand that the sub-leasing tenant pay damages, so the tenant should always do a thorough background check on the sublessee.
There are 4 scenarios in which a tenant can terminate a lease before the end of its term:
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