The process of surrendering a lease is a nuanced aspect of landlord-tenant relations that demands careful consideration. Trainee Solicitor, Jill London, delves deeper into the facets of express and implied surrender to shed light on the intricacies of this legal terrain.
Express surrender materialises when both landlord and tenant make clear their intent to terminate the lease through a formal agreement, typically formalised by signing a Deed of Surrender. This written instrument must unmistakably convey its status as a deed and requires the signatures of the involved parties in the presence of a witness. The Deed outlines the terms of surrender, providing a structured framework that guides the subsequent actions of the parties involved.
Contrastingly, implied surrender is where it is inferred from the conduct of the landlord and the tenant that a surrender has been agreed, often referred to as surrender by operation of law. The tenant must unequivocally demonstrate relinquishment of the property, while the landlord, through actions inconsistent with lease continuation, signals acceptance. It's crucial to note that mere vacant possession isn't sufficient; instead, conduct at odds with the lease's continuation becomes the hallmark of implied surrender. A tangible example is the tenant returning keys to the landlord, an act symbolising an implied surrender.
Does there need to be a clause in the lease to be able to surrender my lease?
While some commercial leases may include specific surrender clauses, the absence of such provisions does not preclude the possibility of surrender. Agreement between both parties remains the linchpin, provided the conditions for express or implied surrender are met.
What are the key responsibilities of the landlord and the tenant?
Neither party is obligated to accept a surrender. However, if an express surrender is successfully negotiated and a deed signed, the tenant will be responsible for vacating the property by the agreed time and date, handing the keys back to the landlord, and delivering vacant possession i.e. removing belongings and content.
If there are any outstanding rent arrears to be paid, the parties can include a term in the Deed to say that these will be waived (although there is no obligation not to insist on payment). If that has not been included as a term, then the tenant will be responsible for paying the outstanding rent despite the surrender. The tenant may also have to consider the position of their mortgagee and whether their consent is required for the surrender to be valid.
If rent is paid in advance, then the landlord and tenant can agree within the Deed that the tenant receives a refund. Consideration should also be given to the landlord’s responsibility and timing of the release of the deposit to the tenant (unless it is otherwise agreed that the landlord retain it).
When the Deed has been properly executed and keys returned, both parties will be released from future obligations under the lease and the lease will cease to exist.
What are the consequences of not obtaining a valid surrender agreement?
Failure to secure a valid surrender, whether express or implied, leaves the lease intact. The tenant remains bound by lease obligations, including rent. Additionally, if the landlord tries to take back possession of the property, i.e., by changing the locks or preventing the tenant from entering the premises, this will amount to an unlawful eviction. Not only can this give rise to sanction under criminal law, it also leaves the landlord vulnerable to a claim for compensation (also known as damages) by the tenant.
Understanding the dynamics of surrendering a lease is pivotal for both landlords and tenants to navigate this process effectively and avoid potential legal pitfalls. If you need advice in this area of property law get in touch.