S13.7 Assignations and Sub-Leases

An Assignation is where a tenant transfers his interest in a Lease to another person (called an assignee), who thereafter takes his place as tenant under the original contract. The Assignee becomes directly liable to the landlord for the rent and other obligations of the Lease, and the original tenant (then referred to as the cedent) is relieved of all responsibilities. An Assignation may comprise part or whole of the original Lease. 

In the case of a sub-lease, the tenant creates a second Lease between him and the sub-tenant, but his relationship to the landlord is unchanged, and he remains directly liable to him for payment of the rent and performance of the obligations under the original Lease. There is no legal obligation between the landlord and the sub-tenant. A sub-lease may comprise the whole or part of the original Lease. Normally, the original Lease has an 'alienation clause' which states that the landlord must be approached for consent to any assignations or sub-lets. A sub-lease is a creation of a new, separate title similar to disponed or feued breakaways.

It occasionally occurs that a sub-lease is created which forms a tenancy between the landlord and the original tenant. The new interest is referred to as an Interposed Lease and may have a term equal to, longer or shorter than the original term. The most easily understood reason why such an occurrence can prove to be a logical step in the case (say) of a development company which has completed a project (either on land that they own or hold a lease) which, after leasing out the various units, wants to retain the development as an investment without having the trouble of day to day management. They achieve this by interposing a Lease to a management company between them (the developers) and the tenants of the individual units. These sub-tenants are therefore responsible to what is now their new landlord.