Apartment Lease Transfers
With rent prices on the rise, renter employment changes (e.g. remote work situation), income changes, and apartment rental supply dwindling in 2023, we may see more lease terminations.
When a tenant is in a bind and must terminate their lease, they’ll begin to think creatively, such as finding out how they can transfer the lease to someone else.
This exchange process is known by many names, including a lease assignment or lease takeover, but is widely called the Apartment Lease Transfer.
We’ve provided tips about transferring apartments within a building or a company’s portfolio of properties. In this post, we explore a transfer of a lease to someone not leasing from your current landlord (external).
Assuming Someone Else’s Rental Lease
In the past, taking over someone else’s lease was a relatively normal occurrence. Emergencies and changes aren’t anything new. When tenants spoke of ending their rental lease, their friends got first wind of the new rental opportunity. I myself benefited from this process many years ago by taking over a friend’s lease, after they bought a house.
You can legally transfer your lease in most states or countries. And in some cities such as New York City, Boston, Washington DC, Miami, San Francisco or Los Angeles, such transfers are a key way of acquiring a new rental unit. For renters, it’s a tough market out there.
Tenant Must Move and Break Their Lease
It’s not uncommon for a tenant to need to break a lease due to a job loss, unaffordability, family emergency, new job, or other reason. You would think this issue has a readymade solution, but not always.
Sometimes transfers are unheard of or are discouraged. A few landlords won’t accept any transfer of leases, even though the tenant has the right to do so. Keep your cool and trust the process.
There Could Still Be Costs
And tenants often face a fee for breaking a lease or they may lose their security deposit upon termination. It makes sense for a tenant to have a friend or acquaintance take over the remainder of the lease, thus saving some money.
Note: a lease transfer is not the same as subletting. In the rare event a tenant sublets, they still have legal liability for the unit, after moving out. To sublet, requires the current tenant to become a landlord of sorts. Subletting a rental is usually unwise.
Another positive for landlords, is that if your tenant is a responsible and high-quality tenant, then their friends may be as well. Of course, they must still be vetted and have their background checked to ensure all is well.
What is a House or Apartment Lease Transfer?
An apartment lease or house rental lease transfer is the process of one person assuming legal responsibility for someone else’s lease. From a landlord or property manager point of view, the lease is being transferred to another person. It changes legal liability and increases risk of revenue loss.
From a tenant’s point of view, it could be someone assuming what remains of the lease period or actually becoming a new tenant of that rental property owner. For tenants and landlords, there may be special provisions that make transfers a slightly different arrangement than normal. There are security deposits, fees, fines, and other matters to consider.
If you’re a tenant and hoping to take over another person’s rental lease (friend or stranger) you need to review the lease clauses to see if a transfer is possible and what costs you’ll be responsible for.
You’ll need to ask:
- if your rental lease permits transfer from one tenant to another (some have clauses preventing it)
- what costs/fees will the tenant experience when breaking the lease
- if there is a clause that requires 60 days notice
- your landlord about the possibility and get their views on what’s needed (they’ll want to help yet ensure they get a good new renter)
- what fees or other costs will you have to pay
- how to find another good quality tenant to assume your lease if you don’t have anyone in mind
- help your friend create and forward a positive, strong rental application
- ask for and prepare for a move out inspection
- complete a consent to assignment of lease form which documents and makes the lease transfer legal
- have all parties sign the assignment of lease (transfer) to the other renter
What You Need to Do
As a tenant, if you’re in a tight bind, you may have to quickly find a tenant on your own. You can ask around with all friends and family for potential renters, or put an ad in a quality vacancy listing site (see ManageCasa’s syndicated ad service for landlords as an example).
Advertising on craigslist or low-quality listing sites could bring trouble, and not generate the renters the landlord will want.
Do your initial preparation and research (review the clauses in the lease, and check out your state/city guidelines for rental transfers, and then talk with your landlord. Property managers know what’s going on with the economy and they likely won’t have trouble finding another renter.
Get your required documents signed (60 days notice, assignment of lease form) and ensure all responsibility for rent payment and property is transferred to the new tenant.
If you’re taking over someone else’s apartment lease, there may be risks. Ensure you do a thorough apartment inspection, speak to the landlord about back rent due. Run a background check on the person transferring the lease to you if you don’t know them. Rental scams are real.
Tips for Landlords
Landlords should have a lease transfer and subletting policy created and available to tenants via their tenant portal.
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Additional information on tenant lease transfers:
Breaking Leases: https://www.nolo.com/legal-encyclopedia/tenants-right-break-rental-lease-texas.html
Ending Leases: https://guides.sll.texas.gov/landlord-tenant-law/ending-the-lease
Assignment of Lease Document Agreement: https://www.lawdepot.com/contracts/lease-assignment/?loc=US
Lease Transfer Clauses: https://www.lawinsider.com/clause/lease-transfer
Notice to Tenant of Landlords Transfer to New Owner: https://content.next.westlaw.com/practical-law/document/Ia02a293a04dd11e798dc8b09b4f043e0/Notice-to-Tenant-of-Transfer-of-Lease-Residential-Real-Estate-Purchase-and-Sale-CA
Consent to Assignment of Lease: https://view.officeapps.live.com/op/view.aspx?src=https%3A%2F%2Fsls.berkeley.edu%2Fwp-content%2Fuploads%2F2020%2F08%2FForm-Lease-Assignment-Single-Tenant.doc&wdOrigin=BROWSELINK
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