Assignment and subletting are two different requests wearing the same paperwork. Getting the distinction right changes who stays on the hook — and what a landlord is entitled to ask before saying yes.
Key takeaways
A request to assign or sublet a unit almost always arrives the same way — a broker's email, a tenant's lawyer letter, sometimes a phone call from the tenant themselves — and it almost always gets read the same way too: as one kind of request. It isn't. What the tenant is actually asking for changes who remains on the hook if the deal goes sideways, and that difference should shape the review before it shapes the answer.
An assignment hands the whole lease to someone else. “An assignment transfers all of your rights and obligations under the lease to a new tenant…for the remainder of the term. You step out of the lease.” The new tenant now owes rent directly, unless the assignment documents keep the original tenant liable as a backstop — which many landlords insist on as a condition of consent.
Subletting is structurally different. The original tenant signs a second lease with a subtenant, but the original lease keeps running underneath it, and the original tenant stays fully on the hook to the landlord. The subtenant has no direct relationship with the landlord at all; rent flows tenant → subtenant → tenant → landlord, not subtenant → landlord.
That distinction should drive the file review. An assignment request is really a request to approve a replacement tenant — the credit review matters more, because that new party may become the only party left standing. A sublet request leaves your original covenant in place, so the underlying financial risk to the landlord hasn't moved, even though a stranger is now occupying the space.
Ontario's Commercial Tenancies Act permits assignment or subletting “with the landlord's consent,” and the general position is that a landlord “generally cannot unreasonably withhold consent, though this is subject to how the lease is drafted.” That last clause is the whole ballgame in practice: most institutional-grade commercial leases replace or narrow the statutory default with their own consent mechanics, so the lease in front of you — not the general rule — is the first thing to check.
A typical process runs: written notice from the tenant naming the proposed assignee or subtenant and their business, a landlord review window usually somewhere in the 10 to 30 day range, then one of three landlord responses — consent, refusal, or recapture.
Reasonableness is fact-specific, but it has a recognizable shape. “A landlord who refuses without stated grounds and without exercising a recapture right may be acting unreasonably.” A refusal grounded in the incoming party's ability to pay, a use that conflicts with the lease's permitted-use clause or an existing exclusivity granted to another tenant, or a genuine concern about the assignee's suitability, tends to hold up. A refusal that amounts to “we'd simply rather not” tends not to.
A landlord is not, however, required to accept a weak proposal just because refusing feels awkward. Landlords may refuse if the proposed assignee is “genuinely unsuitable” or if the lease explicitly permits refusal. The credit review on the incoming party is where “genuinely unsuitable” gets tested with something more concrete than a gut call.
Many leases give the landlord a recapture right — the ability to terminate the existing lease and take the space back directly, rather than either consenting to the new party or refusing outright. It is worth checking for before drafting a refusal letter: recapture lets a landlord walk away from a tenant relationship it no longer wants without having to justify a refusal on reasonableness grounds at all, because it isn't a refusal — it's an exit.
Where the lease says nothing at all about assignment or subletting, do not treat that gap as permission. “Do not assume silence means consent.” A tenant who assigns or sublets without seeking consent, on the theory that the lease never said they couldn't, is exposed to a default claim regardless of what the statutory baseline would otherwise permit.
Consent request checklist
From the tenant: written notice, the proposed assignee or subtenant's legal name and business description, and the effective date requested.
From the incoming party: financial evidence that they can meet the rent and other obligations, and confirmation their intended use matches what the lease actually permits.
From either side: an estoppel certificate confirming the lease is in good standing, with no undisclosed arrears or side agreements — standard on an assignment, useful on a sublet too.
A landlord's own cost recovery: many leases entitle the landlord to recover reasonable administrative or legal costs for reviewing and documenting the consent — confirm the lease grants that before assuming it.
A 3,200 sq. ft. unit is leased at $28.00/sq. ft. base plus $12.00/sq. ft. TMI — $40.00/sq. ft. gross, or $128,000.00 a year, $10,666.67 a month. The tenant's business is being sold and the buyer wants the lease assigned rather than negotiating a fresh one. The landlord's file review turns up a two-year-old numbered company as the buyer, no publicly available credit history, and no personal guarantee offered in the buyer's first draft.
Rather than refuse outright — which risks an unreasonable-withholding argument if the only stated reason is “newer company” — the landlord conditions consent on three things: a personal guarantee from the buyer's principal, a security deposit increase equal to three months' gross rent ($32,000.00, at $10,666.67 × 3), and an estoppel certificate from the outgoing tenant confirming no arrears or side letters exist. All three are inside what a landlord can reasonably request under a consent-to-assign review; refusing outright, on the same facts, without offering that path, would have been the harder position to defend.
Not always in writing under the statute itself, but a refusal with no stated grounds is the pattern most likely to be found unreasonable if it's challenged — a landlord who refuses without stated grounds and without exercising a recapture right may be acting unreasonably. Documenting the actual basis — financial, use-related, or otherwise — protects the refusal and creates the record if it's ever tested.
Yes, refusing consent (on reasonable grounds) leaves the existing tenant bound to the lease as before — the assignment or sublet simply doesn't happen. That is different from recapture, which ends the existing tenant's lease entirely so the landlord can re-let the space itself.
Often yes, unless the assignment documents include an express release. Many landlords make a full release conditional on the assignment being consented to and documented on their terms specifically because it preserves a fallback covenant if the new tenant defaults — a covenant that matters if the new tenant later falls into arrears and the landlord has to escalate against them.
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