The tenant's rights under a lease being personal property are assignable, unless the lease itself contains a covenant forbidding its assignment. A landlord often makes a lease relying on the financial stability of the tenant, or because the tenant is personally acceptable to him, and it is often, therefore, his desire to prevent an assignment of the lease to another person. A landlord may in any event consent to a proposed assignment if he wishes to do so.
It has been a rule that when a lease has once been assigned, with the landlord's express or implied consent or ratification, that it is thereafter freely assignable. To prevent this, it is well to provide that the landlord's failure to insist upon a strict performance of the terms and conditions of the lease shall not be a waiver of his rights as to any future breach of the conditions. The lease should also provide that an assignment (even with landlord's consent) shall not relieve the original lessee of his liability to pay rent, except that he shall be credited with any rent collected by the landlord from the assignee.
The usual rule regarding assignments is that the original lessee can be held personally for the rent called for by the lease even though he has assigned it and the assignee is in possession. Of course, the owner of the property may waive this by express or implied agreement, but unless such agreement can be shown the liability continues. The assignee of the lease in order to retain possession would, of course, have to pay the rent and comply with the other terms of the lease. His failure to pay the rent would permit the landlord to dispossess him. If the landlord wishes to sue for the rent due him his suit against the assignee would be to recover rent based on use and occupation, unless the assignee had made some binding agreement to pay the rent called for by the lease. Rent based on use and occupation may be the same rent that the lease calls for but not necessarily so.
A sub-letting is a letting of premises by a tenant to an under-tenant. It may be for all or part of the premises or for the whole term or part of it. Many leases provide that there shall be no sub-letting without the consent of the lessor. This covenant is valuable if the landlord wishes to control the character of the occupancy.
The tenant may mortgage the lease, that is the leasehold (the tenant's rights under the lease) may be given as security for money borrowed by him, unless the lease restricts him from so doing. In New York, a mortgage on a lease is a conveyance and comes under the provisions of the recording act and is, therefore, recorded in the same manner as a mortgage on real property and not as a chattel mortgage. In some jurisdictions it is considered to be a chattel mortgage. In the absence of a statute or legal decision in any particular State it may be considered advisable to file it both ways.