Assignment Of Security Deposit And Lease

When you assign a lease, you move out permanently and a new tenant moves in for the remainder of the lease term. An assignment of a lease differs from a sublet. With a sublet, the original tenant gives up an apartment temporarily. With an assignment, the original tenant gives up the apartment permanently.26

The person to whom you assign your lease is referred to as the "assignee." Both you and the assignee remain responsible to the landlord for the obligations contained in the lease.27 As the original tenant, you can escape such responsibilities only if the landlord clearly releases you from them.28

To be valid, an assignment must be in writing.29 While your lease may say that you need the landlord's permission to assign, many leases also state that the landlord cannot unreasonably deny her consent. If this is the case, the landlord cannot unreasonably deny you permission to assign.30

Where a lease does not specifically prohibit a landlord from unreasonably denying consent, she can deny her consent for any reason. If a lease forbids assignment, you assign anyway, and the landlord objects to it, the landlord can terminate your lease.31 If you then move out, the landlord will have a duty to make reasonable efforts to find a new tenant. If the landlord attempts to sue you for any rent or costs she has incurred because of your breach of the lease, you can argue that you had a person willing to take over the lease who could have paid the landlord the rent. Also, even if you do not get the landlord's permission before assigning the lease, if the landlord knowingly accepts rent from the assignee, then she is probably required to accept the assignment.32

If you are moving out, you should also arrange with the landlord to get your security deposit back if you paid one. See Chapter 3: Security Deposits and Last Month's Rent.

Q. Last month I decided to move in to my boyfriend’s two-bedroom apartment and give up my own studio.  I still had about eight months left on the lease, but the landlord agreed to allow me to assign it to a new tenant. 

I found someone to take over the lease and they moved in last week, but now my landlord said he won’t return my security deposit for another eight months (when my lease would have ended).  How can he do that?

A. Entering into a lease agreement is a serious matter, and the legal rules that pertain to releasing one of the parties to the agreement from their obligations can be complicated.  You stated that you “assigned” the lease to a new tenant; however, without reading the terms of the agreement, it’s not possible to know what exactly happened.

An assignment is when you transfer all of your remaining interest in a lease to someone else.  For example, if you had eight months remaining on your lease and granted all of that time to the new tenant (the assignee) that would be an assignment.  This is different than a sub-lease, in which you grant less than all of your rights to the lease and maintain some right of reversion (i.e. a right to retake the premises at some point in the future during the course of your lease).

Things can get even trickier from here.  Technically, an assignment is a contract between you and the new tenant.  The landlord is not involved.  From that come a number of consequences.  First, the new tenant (the assignee) is not directly responsible to your landlord but rather to you.  That fact can be changed if the new tenant also signs an assumption agreement, under which they assume all of your obligations pursuant to your lease with the landlord.

Moreover, simply assigning your lease to a third party, even if that party enters into an assumption agreement with you, does not mean that you are released from your obligations to the landlord.  The only way to that is to also obtain a written release from the landlord stating that you are no longer liable for the apartment once the lease has been assigned to the new tenant and that tenant also enters into an assumption agreement.

That is why, without reading the documents that were used to “assign” your lease to a new tenant, it’s not possible to say for sure what you agreed to.  However, if you did not receive a release, you are still liable to the landlord in the event that the new tenant defaults. Because of that, absent a written agreement to the contrary, the landlord can keep your security deposit until you are no longer liable for the lease.

It’s not uncommon, however, for a tenant to negotiate with the landlord for the return of the security deposit if the new tenant replaces it with a deposit of their own.  In that case, your landlord would not be able to keep your deposit for another eight months. 

Mike Akerly is a New York City real estate attorney, landlord, and real estate broker. He is also the publisher of the Greenwich Village blog VillageConfidential.     

Note: The information provided here is for informational purposes only. It should not be construed as legal advice and cannot substitute for the advice of a licensed professional applying their specialized knowledge to the particular circumstances of your case.

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