Assignment is when an existing and ongoing tenancy is transferred from one tenant to another. The person who transfers the tenancy is the “assignor” and the person who the tenancy is transferred to is the “assignee”.
The outgoing tenant transfers his rights and obligations under the tenancy to the incoming tenant through a legal process which involves a Licence to Assign Note 1 below), permission given by the landlord, and a Deed of Assignment (see Note 2 below) to formalise the process. Under the Law of Property Act 1925 any assignment must be completed by deed.
Most tenancy agreements, if they expressly permit assignment at all, (most are either silent on the matter or expressly forbid it) will only allow this with the consent of the landlord. Further, under Section 15(1) of the Housing Act 1988 it is an implied term in all Assured Shorthold Tenancies (ASTs) that the tenant will not assign without the Landlord’s Consent.
So long as the AST agreement does not state that the landlords’ consent is required to assign, the landlord CAN withhold consent. Section 15(2) HA 1988 states that Section 19 of the Landlord & tenant Act 1927 (consents to assign not to be unreasonably withheld) does not apply to Assured Tenancies.
It is quite rare for standard ASTs to be assigned as they are short term and a new tenancy agreement can be easily arranged and signed, though doing this gives any new tenant a full new term and a minimum of 6 months.
I the case of joint tenancies, once one or more tenants leave the rental property this effectively brings the whole joint tenancy to an end. This is because, in law, a joint tenancy is seen as one tenant: they are all individuals, but as far as the law and the landlord is concerned they are one – “the tenant“.
Signing up new joining tenants and the remaining tenants to a new agreement starts a new tenancy with a new minimum term of 6 months, which may not suit the landlord, especially with student lets, where periods need to align with therm times.
This is where assignments come in. In the case of joint tenancies, and especially in the case of student lets during term times, where tenants may come and go, assignments can be a very useful device for landlords.
The new tenant/s take over where the outgoing ones left off leaving the original tenancy untouched. However, great care is needed to ensure that the documentation is completed correctly, deposit arrangements are taken care of between the tenants, and any guarantors are kept fully informed of the changes to ensure their continuing liabilities are preserved.
Even where the AST agreement expressly forbids assignment, with the landlord’s consent assignment can be effected. With the landlord’s consent therefore an AST can be assigned to anyone.
On the other hand, where a tenant assigns without the landlord’s consent (similar applies when a tenant sub-lets) the landlord could start possession proceedings against the true tenant and the assignee under Ground 12 HA 1988 schedule 2 for breach of contact.
Further, once the true AST tenant leaves the rental property as his main residence, the tenancy reverts to a common-law tenancy, no longer under Housing Act protection, and subject to a notice to quit. The original tenant no longer has security of tenure and can be “evicted” along with the new “tenant” who is now an unathourised occupant.
1. License to Assign – a document signed by the landlord giving the tenant (assignor) permission to assign.
2. Deed of Assignment – a legal agreement clearly marked as a Deed of Assignment, signed as a deed and independently witnessed.
3. LandlordZONE® Combined Licence and Deed of Assignment©
By Tom Entwistle,
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©LandlordZONE All Rights Reserved – never rely totally on these general guidelines which apply primarily to England and Wales. They are not definitive statements of the law. Before taking action or not, always do your own research and/or seek professional advice with the full facts of your case and all documents to hand.©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law; always seek professional advice. Legislation changes, so check dates on these articles. If you have questions go to the LandlordZONE® Forums