When you find someone to take over your lease, you are transferring (or "assigning") the remainder of your lease term to them. You leave permanently. You may still be responsible for the rent payments if the assignee defaults—this depends on the agreement you sign with your landlord. Below, we walk you through the process of transferring your lease to a new tenant.
1. Check local laws
Check local laws to see if your landlord is required to mitigate damages caused by unpaid rent. They are in most states. If your landlord is required to mitigate damages, then they're obligated to accept your assignee—as long as he or she is as financially qualified as you.
For example: imagine that you're paying $1,000 per month in rent, and there are six months left on your lease. If you want to leave early, then you're responsible for $6,000 in damages. By finding a renter who wants to take over the remaining six months on your lease, then you're giving your landlord an opportunity to avoid those damages. In this situation, the landlord is required to let you market your rental and accept any qualified renters you present them with.
2. Check your landlord's policies
If your building is professionally managed, then there might be existing policies in place for renters looking to assign. You'll want to figure out if there are any required forms for assignments, where you should send the assignee's application, if there will be a rent increase, and if they charge an additional fee.
3. Find a replacement tenant
Create an advertisement for your listing. List the rent, the number of months left on the lease, and include as many photos as possible. You can create the listing on Flip, of course, but also on Facebook Marketplace, a local Facebook group, or Craigslist.
4. Make sure the potential tenant is qualified
If you send someone to your landlord as your replacement and they don't qualify, then you've wasted everyone's time. Review your applicant's income, credit score, identity, criminal history, and rental history first. They must be as qualified as you in terms of credit score and income.
5. Prepare an assignment agreement
Probably the most common misconception about a lease assignment is that you're completely off the hook. In actuality, you're only off the hook entirely if your agreement includes a clause that specifically releases you. Otherwise, you will be expected to return if the assignee stops paying the rent, kick them out yourself, and start living there again.
To make sure your legal agreement includes the right clauses, make an airtight assignment agreement and sign it with your assignee before sending to your landlord.
6. Submit your request for landlord consent
Put the rental application and the assignment agreement into an email and send it to your landlord. You can also include a cover letter describing what you are asking for in detail. The letter should reference any relevant state laws.
7. Execute your agreement
If you use the assignment agreement template that Flip provides, then your agreement will contain a clause that releases you from the contractual obligations of your lease. Make sure that your landlord signs this agreement. It's fairly common to get permission to transfer your lease without actually getting released from the lease. This means that if your assignee flakes or defaults, you'll be expected to return and deal with the situation.
The information provided on this website does not, and is not intended to, constitute legal advice.
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