Assignment vs Subletting: The Difference Explained (2026)

The short answer Assignment transfers your whole interest in a lease to someone else, so they step into your shoes. Subletting carves out a new, shorter interest underneath your lease while you keep your own. The practical difference comes down to who remains liable to the landlord and what rights the new occupier actually holds. This page explains each plainly, then sets out the differences that matter. It is general information, not legal advice, so confirm the position for your jurisdiction and your specific lease with qualified counsel. ## What assignment is An assignment is the transfer of the entire remaining term of a lease from the existing tenant (the assignor) to a new tenant (the assignee). The assignee takes over the lease directly from the landlord and becomes the tenant for all purposes going forward. There is no new lease created between the old tenant and the new one; the existing lease simply changes hands. After an assignment, the assignee pays rent to the landlord and must perform the lease obligations. The original tenant usually drops out of the direct relationship, although, depending on the jurisdiction and the lease, the outgoing tenant may remain liable under an authorised guarantee or by the lease terms if the new tenant later defaults. Assignment is an all-or-nothing move: you cannot assign part of the space or part of the term. ## What subletting is Subletting (or subleasing) is the creation of a new, shorter lease out of your existing one. The original tenant becomes a landlord to the subtenant while remaining a tenant to the head landlord. You can sublet the whole premises or just part, and for the whole remaining term less at least one day or for a shorter period. Crucially, there is no direct contract between the head landlord and the subtenant. The subtenant pays rent to you, and you keep paying rent to the head landlord. You sit in the middle, bound by two agreements at once, and responsible for the head lease whatever your subtenant does. ## The practical differences Who stays liable to the landlord. This is the central difference. In an assignment, liability generally passes to the assignee, and the outgoing tenant usually steps out of the direct line, subject to any guarantee or continuing-liability term. In a sublet, the original tenant stays fully liable to the head landlord for rent and every obligation, no matter what the subtenant does or fails to do. What is transferred. Assignment transfers the entire remaining term and interest. Subletting creates a new, shorter interest and leaves the original lease intact above it. The relationship created. Assignment puts the new party into a direct relationship with the landlord. Subletting creates a new landlord-and-tenant relationship between the original tenant and the subtenant, with the head landlord one step removed. Whole or part. You can only assign the whole of your interest. You can sublet the whole or just part of the premises, which makes subletting the tool for sharing or partially exiting space. Consequences of default. Under an assignment, the landlord looks to the assignee (and any guarantor). Under a sublet, the landlord still looks to you, and you must chase your subtenant separately. If the head lease ends, a sublease usually falls with it, so a subtenant's position depends on the head lease staying alive. ## Consent, and why it matters for both Most commercial and many residential leases restrict assignment and subletting, often requiring the landlord's prior written consent, which in many jurisdictions cannot be unreasonably withheld. Assigning or subletting in breach of that clause can be a breach of the lease and grounds for forfeiture. So before doing either, the first question is always what the lease allows and what consent is required. Landlords commonly impose conditions: references for the incoming party, a guarantee, or in an assignment an authorised guarantee agreement under which the outgoing tenant backs the new one. ## When each is used Assignment suits a tenant who wants a clean, permanent exit: selling a business with its premises, or leaving the space entirely and handing the lease to a successor who will deal with the landlord directly. The appeal is getting out of future liability, subject to any guarantee. Subletting suits a tenant who wants to keep the lease but not all the space or not for the whole time: a business that has taken too much room, a seasonal gap, or a plan to return. The trade-off is staying on the hook to the head landlord while becoming a landlord yourself, with all the collection and management that involves. ## Keeping these arrangements under control Assignment and subletting both live or die on the detail: what the lease permits, whether consent was properly obtained, who remains liable, and whether a guarantee is in place. The danger is rarely one clause read alone; it is losing track of the consent conditions, the continuing-liability terms and the chain of agreements sitting on top of each other. Drafting the deed or sublease, reviewing it for exposure, tracking consents and obligations, and keeping version history are all the same body of work, and far easier when they live together. That single-workspace idea is what Adira is built around for business contracts: draft, understand, edit, track and govern an agreement in one place, with per-clause risk visible and built on frontier AI. Whatever you use, the point stands: assignment hands over your whole lease, subletting rents out part of it beneath you, and who stays liable is the difference that decides the risk.