In Ontario, an assignment permanently transfers your lease and all legal responsibilities to a new renter. A sublet is a temporary arrangement where a subtenant moves in, but you remain the official legal tenant and must return to the unit before the lease expires.
Life circumstances can change rapidly. Whether you are graduating from a university in Kingston, taking a temporary job posting in Ottawa, or simply need to break your lease early to buy a house in Mississauga, you will eventually need to deal with the remainder of your rental contract. Ontario’s Residential Tenancies Act (RTA) provides tenants with two distinct legal options: assigning the lease or subletting the unit.
Understanding the difference between these two terms is absolutely critical. Using the wrong process can leave you financially liable for a stranger’s unpaid rent or thousands of dollars in property damage. Property owners also need to know the rules, as the Landlord and Tenant Board (LTB) strictly regulates how and when a landlord can refuse a replacement tenant. Our comprehensive guide explains how to navigate these two entirely different legal paths safely and effectively. 💼
Step-by-Step Process for Assigning or Subletting in Ontario
Choosing the correct path depends entirely on your future intentions. Will you ever return to the apartment? Here is how to execute either option properly under provincial law.
Step 1: Determining Your Legal Intentions
The first step is deciding if your move is permanent or temporary. If you are moving to Toronto for a four-month summer internship and plan to return to your apartment in September, you need a sublet.
If you have bought a house or are relocating to another province indefinitely, you want to cut all legal ties with the rental property. In this case, you must seek a lease assignment. Attempting to “sublet” permanently is a massive legal risk because you remain legally responsible for the unit forever. 📝
Step 2: Requesting Landlord Permission
Whether you assign or sublet, you cannot just hand your keys to someone else. You must obtain written consent from your landlord. For an assignment, you start by sending a general written request: “Do you consent to me assigning my lease?”
If the landlord says no to the general idea of an assignment, or fails to respond within exactly 7 days, Ontario law grants you a powerful remedy. You can legally break your lease by serving an N9 (Tenant’s Notice to End the Tenancy) with just 30 days’ notice. ⏱️
Step 3: Finding a Suitable Candidate
If the landlord agrees in principle, the burden is on you to find a qualified candidate. You must advertise the unit, conduct initial screenings, and present a specific person to the landlord for their approval.
The landlord will likely run a credit check and request employment letters from your proposed candidate. A landlord cannot arbitrarily or unreasonably refuse a specific assignee. If they reject a candidate because they have a perfectly fine credit score but do not make “enough” money beyond the rent, the LTB may deem that refusal unreasonable. 👤
Step 4: Executing the Correct Agreements
If the landlord approves, you must complete the paperwork. For a sublet, you sign a Subtenancy Agreement with the new person. You become their “landlord” while you remain the “tenant” to your actual landlord.
For an assignment, all three parties (you, the landlord, and the new tenant) should sign a formal Assignment Agreement. The moment the assignment is signed and the date passes, your legal relationship with the landlord completely ends. You cannot be sued if the new tenant stops paying rent three months later. 🔒
Step 5: Managing the Rent Payments
In a sublet, the subtenant generally pays rent directly to you, and you continue to pay your landlord. Crucially, under the RTA, it is strictly illegal to charge a subtenant more rent than you currently pay.
In an assignment, the new tenant takes over your exact current rent amount and pays the landlord directly. The landlord cannot use an assignment as an excuse to illegally hike the rent to “current market value.” The lease simply continues under a new name. 💰
How Much Does it Cost in Ontario?
Neither a sublet nor an assignment should be a major financial burden for the tenant, as the law strictly prohibits landlords from charging arbitrary “transfer fees.”
- Landlord Administration Fees: A landlord can only charge for their actual, reasonable out-of-pocket expenses to process the paperwork. This typically includes a credit check fee and minor administrative time, usually ranging from $50 to $250 CAD.
- Subtenant Overcharging: It is illegal to charge a subtenant a “finder’s fee” or charge them $2,000 a month if your rent is only $1,500. Doing so can result in hefty LTB fines.
- LTB Application Fee: If a landlord unreasonably refuses your candidate, filing an A2 application with the LTB costs $53 CAD.
| Legal Responsibility | Lease Assignment | Sublet Arrangement |
|---|---|---|
| Who pays the landlord? | The new tenant (Assignee) | You (The original tenant) |
| Are you liable for damages? | No, you are completely released | Yes, you are 100% responsible |
| Do you have the right to return? | No | Yes, at the end of the term |
If you hire an Ontario real estate lawyer or paralegal to draft a custom Assignment Agreement or represent you at the LTB, expect to pay an hourly rate of $200 to $450 CAD.
How Long Does the Process Take?
Ontario law enforces strict timelines. When you ask your landlord for general permission to assign a lease, they have exactly 7 days to reply. If you propose a specific candidate to them, they generally must respond reasonably within 7 to 14 days. If you are forced to file an application with the Landlord and Tenant Board because of an unreasonable refusal, securing a hearing date can unfortunately take 4 to 8 months due to ongoing provincial backlogs.
Frequently Asked Questions (FAQ)
Can my landlord refuse to let me assign the lease entirely?
Yes, they can say no to the general idea of an assignment. However, if they do, the RTA gives you the immediate right to break your lease by giving 30 days’ written notice using an N9 form.
What happens if my subtenant refuses to move out?
This is a major risk. If the subtenant refuses to leave on the agreed end date, they become an “unauthorized occupant.” You, as the original tenant, may face eviction from the landlord, and you must apply to the LTB to forcefully evict the overholding subtenant.
Do I get my last month’s rent deposit back during an assignment?
Usually, the new assignee pays you directly for the value of the last month’s rent deposit, and the landlord simply keeps the original deposit on file. You must arrange this transfer of funds privately with the new tenant.
Can I assign a month-to-month lease?
Yes. You have the right to assign a month-to-month tenancy, though most tenants simply choose to give 60 days’ notice to end the tenancy rather than going through the hassle of finding a replacement for a month-to-month agreement.
Can the landlord increase the rent for the new assignee?
No. When a lease is formally assigned under the RTA, the new tenant inherits the exact same lease terms, including the current rent amount. The landlord cannot treat it as a brand-new tenancy with a higher market rent.
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