What’s the difference between assigning a lease and subletting it?

Once a buyer is found for a business that leases its premises, the question of how the lease itself moves is not a formality to sort out later — it decides how much liability the seller carries after closing and how much certainty the buyer actually gets. There are three real routes, and they are not interchangeable.

An assignment substitutes the buyer as tenant

An assignment transfers the seller’s existing lease to the buyer, who takes over the same term, rent, and conditions the seller had, and the seller generally steps out of the ongoing landlord relationship going forward. This is the most common route in a Canadian business sale and the one most buyers assume applies, but almost every commercial lease conditions it on the landlord’s written consent.

A sublease leaves the seller on the hook to the landlord

Under a sublease, the seller remains the tenant of record under the original lease, collecting rent from the buyer and continuing to pay the landlord directly, which means the seller stays personally exposed to every term of a lease for a business they no longer run. Landlords sometimes push a departing tenant toward this structure precisely because it keeps someone with a track record on the hook.

A new direct lease starts the slate clean, at the landlord’s price

A landlord unwilling to consent to an assignment can instead offer to end the existing lease and sign a fresh one directly with the buyer, on whatever rent and terms reflect current market conditions rather than the seller’s original deal. If the seller’s lease was priced below today’s market, this route can quietly erase value the seller had been counting as part of the sale.

Check the lease itself, not just what the parties want

Many commercial leases expressly restrict subletting, make assignment conditional on landlord approval, or give the landlord a right to reclaim the space instead of consenting at all. Which route is even on the table is dictated by the lease’s own wording and by how the landlord views the buyer, not by what the buyer and seller would prefer.