Expert Tips: Subletting vs. Assignment

by | May 16, 2024 | Rental Guides

A hand with a key hanging from it representing subletting or assignment to a new tenant. A picture of guest legal expert Frannie Simms from Cohen Highley law firm is in the bottom left corner.

Navigating the Legal Landscape with Frannie Simms of Cohen Highley

Subletting and Assignment

 

As a landlord or tenant, it’s important to know and understand what the tenancy agreement and the Residential Tenancies Act, 2006, allows and does not allow. The tenant has an ability to assign or sublet their rental unit to another person; however, this can only occur with the direct consent of the landlord. The landlord is not allowed to withhold consent arbitrarily or unreasonably in regard to a request for sublet or assignment. If a landlord refuses or fails to respond within 7 days to a request for sublet or assignment, then the tenant can provide the landlord with a notice of termination within 30 days after the date the request was made and proceed with the applicable application before the Landlord and Tenant Board. If the tenant sublets or assigns the tenancy without requesting consent from the landlord, then the landlord will have 60 days after finding out that there is an unauthorized occupant in the rental unit, to proceed with an application before the Landlord and Tenant Board. 

 

Subletting

Imagine you’re a tenant renting a unit in your school district, but you have to return home for the summer. You want to return to the rental unit once school starts up again. What option might be best suited for you? In this situation, it’s likely a sublet would be the ideal option to pursue. 

A sublet occurs when the tenant moves out of the rental unit and allows a new individual, who then becomes the ‘sub-tenant,’ to reside in the rental unit until a specific date prior to the end of the subletting tenant’s term or period. With a sublet, the subletting tenant intends on returning to the rental unit to live in it again before the tenancy ends. The subletting tenant is entitled to resume their tenancy after the selected specified date. During the subletting period, the tenancy agreement remains the same and the landlord-tenant relationship is not impacted. In this situation, the subletting tenant remains responsible for the lawful monthly rent and any damages caused by the sub-tenant. It’s important to keep in mind that the subletting tenant cannot charge a higher rent than what the landlord charges for the rental unit, collect any additional fees in relation to subletting the rental unit, or charge the sub-tenant for any additional goods or services.

Assignment

Again, imagine you’re a tenant renting a unit in your school district, and you decide to transfer to a new school in a different city. You’ve found a new rental unit in the other city, and you have no intention of returning to your current rental unit as it is no longer in an ideal location. What option might be best suited for you? In this situation, it’s likely an assignment would be the ideal option to pursue. 

An assignment is when the tenant transfers the tenancy agreement and the right to occupy the rental unit to a new person. The new person becomes the tenant, and the tenancy agreement remains the same. The original tenant is no longer responsible for future payments to the landlord and the relationship between the original tenant and landlord is finished. 

 

Subletting vs. Assignment

If a tenant has signed a tenancy agreement but needs to move out before the tenancy ends, how do they know which option to choose? There are some simple key differences to assist in understanding which route to select. The main difference is that, if the tenant intends on returning to the rental unit, then the tenant would seek the sublet option; whereas, if the tenant does not intend on returning to the rental unit, then the tenant would seek the assignment option. A sublet allows another person to move in, that being the sub-tenant, but the subletting tenant will move back in at a later date. Whereas an assignment allows a new person to become the tenant and take over all obligations relating to the tenancy and the relationship with the landlord. 

 

Conclusion

Both sublets and assignments are options afforded to tenants who need to vacate their rental unit for either a period of time or indefinitely without breaking the tenancy agreement. It’s important that both landlords and tenants understand the rules surrounding sublets and assignments prior to engaging in them to ensure they are acting in compliance with the Residential Tenancies Act, 2006. It is always recommended that parties seek independent legal advice regarding their particular situation before taking additional steps.