Your Guide to Tenancy Assignment

Tenancy assignment is not something that is particularly common, but it is something that’s really important for a landlord to understand and be aware of. The good news is that it’s a pretty simple concept. It’s the process of transferring a tenancy from one tenant to another. The new incoming tenant steps into the existing tenancy agreement and becomes directly responsible to the landlord. This can be due to a relationship breakdown or where a tenancy is being transferred within a family.

It’s not the same as subletting, as with subletting, the original tenant usually stays legally responsible for the tenancy whilst renting the property (or part of it) to someone else. With a tenancy assignment, the tenancy is completely handed over to someone else, and the original tenant is out of the picture.

In this guide to tenancy assignment in England, we’ll explain the process in more detail, the correct legal procedure that must be followed, and what tenancy assignment means for both a landlord and a tenant. 

Tenancy assignment explained

Let’s talk about exactly what tenancy assignment is in a little more detail. So, to reiterate, tenancy assignment is when a tenancy is completely transferred from one tenant to another. Essentially, the tenant is replaced, but all the terms of the tenancy remain the same. 

Tenancy assignment is commonly used when:

• An original tenant wishes to pass on their tenancy before their death to a family member, usually.
• A relationship has broken down, and one tenant is moving out and removing themselves from the tenancy, transferring the tenancy to the remaining party.
• Someone wishes to swap homes with another tenant by mutual exchange.

The person that the tenancy is assigned to becomes the tenant of the landlord under the same agreement. In most cases, a tenancy assignment is completed using a deed of assignment. This is a legal document that records the transfer of the tenancy from the outgoing tenant to the incoming tenant, including the date the change takes effect.

Can you use tenancy assignment?

It’s important to note that tenancy assignment is not always an option. It depends on the tenancy type. 

Assured / Assured Shorthold tenancies

Most private tenancies in England are let on an Assured Shorthold Tenancy (AST). For these types of periodic tenancy (rolling monthly/weekly), the Housing Act 1988 adds an automatic rule: the tenant must not assign, sublet or part with possession. So, in most cases, a tenant cannot assign a tenancy agreement without the landlord’s consent.

If the landlord is happy with using the tenancy assignment process, then it can be straightforward. More often than not, however, landlords prefer to end the old tenancy and grant a new one instead. 

So, in short, tenancy assignment is legally possible with ASTs, but it is very much permission-based, and the paperwork (the deed) must be done properly.

Secure tenancies

Typical council tenancies are secure tenancies. These are generally not assignable to someone else, except in legally permitted cases. These permitted cases include:

• A mutual exchange (home swap)
• Assignment to someone who would be allowed to inherit if you died, such as a close family member
• A court orders the tenancy to be transferred, such as in certain family law cases.

The most common case is a mutual exchange – a formal house swap that happens by tenancy assignment. This usually requires the landlord’s written consent before it can go ahead.

How to assign the tenancy agreement: Step-by-step

Tenancy assignment can be a practical way to avoid a void period, but it needs to be handled carefully so you stay compliant and clear on who’s responsible for what. Let’s talk through how to assess the request, document your decision, and complete the changeover properly.

Confirm the tenancy agreement and the tenancy type

Whether tenancy assignment can go ahead will all depend on the type of tenancy and what the tenancy agreement says. Identify whether you’re working with an AST or a secure tenancy to be aware of your potential limitations. 

Check what your tenancy agreement says about assignment. Is it banned outright, or allowed with consent? If your tenancy is a periodic AST and your agreement doesn’t say anything about tenancy assignment, the Housing Act 1988 still automatically implies the term that a tenant cannot assign, sublet or part with possession without your consent. So, it’s up to you to tell the tenant that they need your written consent to assign, and you must reply in writing with your decision.

For fixed-term ASTs, the Housing Act implied term applies to periodic tenancies, so fixed-term assignment usually comes down to what your tenancy agreement says (and most require consent or ban it). You can offer or require a surrender and new tenancy instead of tenancy assignment, or, if you do agree to assignment, insist that it’s properly documented via a deed of assignment, so that the date and responsibility are clear.

For council and social housing (secure tenancies), it’s a little more black and white. The default is the opposite, in that a secure tenancy is not capable of being assigned, except in those specific permitted cases mentioned previously. So, if there’s no mention of tenancy assignment in your agreement, you still treat it as not being allowed unless it’s one of those legally permitted routes.

Require a written request

If your tenant has broached the topic of tenancy assignment, ask them to put the request in writing, with the following details:

• Full details of the proposed new tenant
• The proposed assignment date
• The reason for requesting the tenancy assignment
• Permission for you or your letting agent to run tenant checks.

Decide where you stand

Of course, if the tenancy prohibits tenancy assignment, you can refuse an offer as an alternative, such as surrendering and offering a new tenancy. If it does allow it with consent, then it’s up to you to decide, based on sensible criteria, whether you agree or not. Whatever you do, make sure to keep your decision and reasons in writing.

Screen your incoming tenant

Let’s say you agree to assign the tenancy agreement. It’s important that you still screen your incoming tenant in the same way that you would any other tenant. Screening your incoming tenant would involve:

• Affordability and employment checks
• Credit/reference checks
• Previous landlord references, if possible.

Handle the deposit

You’ll need to collect a deposit from your incoming tenant and handle this correctly, along with returning the deposit to your outgoing tenant. In some cases, you might transfer/adjust deposit contributions between tenants (if sharers).

If the deposit stays in place, make sure that the deposit protection scheme details and who paid what are very clear.

Update all details

Next, it’s time to update your records with your new, incoming tenant’s name and contact details, the rent payer details and the emergency contacts. Make sure that you update your standing order details and payment references, along with handing over the keys. If you manage via an agent, ensure that their file notes match the legal position.

Charge fees, if applicable

In some cases, you may be able to charge a permitted ‘tenant-requested-change-fee. This is typically capped at £50, unless higher, reasonable costs can be evidenced. Make sure you keep receipts and justifications if you do charge more than the capped amount.

Confirm the outcome in writing

Lastly, put together a short written confirmation of whether the tenancy assignment request has been approved or refused, the chosen route (i.e. deed of assignment), the effective date and how the deposit and rent will be handled from that date. Supply this to both your incoming and outgoing tenants.

Although fairly uncommon, tenancy assignment does command a strong understanding, as getting the details right really matters. If you keep tight control of the deposit, referencing and record updates, there’s no reason why tenancy assignment can’t be a smooth way to maintain continuity and avoid a void period. 

If you’re considering a tenancy assignment, it’s also a good time to review your landlord insurance, especially any requirements around tenant changes and legal expenses. Make sure your policy still fits your setup, so you’re covered if anything goes wrong during or after the handover.

Look no further than the experts here at CIA Landlord Insurance. With 20+ years of experience, you’re in capable hands to help you find suitable cover. Get a quote today, or call us on 01788 818 670 or request a callback.