How to Surrender a Tenancy
Where tenants move out because they do not have the money to pay the rent, many landlords just accept the situation and treat the tenancy as being at an end. But they don’t have to!
There is no obligation on landlords to mitigate their losses if a tenant moves out mid-term – they are quite within their rights just to leave the property empty and bring a claim for unpaid rent against the tenants – and their guarantors – either after the fixed term has come to an end or after they have successfully re-let the property, or at any time before then.
And they can also bring this claim at any time during the next six years (after when the claim will become ‘statute barred’).
So, tenants – you need to be careful to protect your position. Just moving out is not enough to end your tenancy. It may be a lot more expensive than you think. You will still remain liable for the rent.
There are two main ways to end a tenancy early. The landlord or the tenant can serve notice, ending the tenancy according to the rules laid out in the contract (if there is a break clause or the contract comes to the end of its term). Alternatively, both the landlord and the tenant can agree to end the tenancy by mutual agreement.
If both parties are happy to proceed according to new, agreed terms, the tenancy-ending mechanisms in the contract (e.g. how much notice to give) don’t have to be followed. This is called a surrender of tenancy.
However, there is no obligation on landlords to accept a surrender of tenancy. But there is a possibility of Implied Surrender:
What is an implied surrender?
A surrender is when both landlord and tenant agree to end the tenancy. A written agreement is clearly the best way to do this when possible. But legally, such an agreement can be implied from the behaviour of both parties, too.
An implied surrender is when the behaviour of both the landlord and tenant makes it clear that they both agree that the tenancy has ended. It is also known as ending the tenancy by ‘operation of law’.
EXAMPLES OF IMPLIED SURRENDER INCLUDE:
- The landlord and tenant signing a new contract for the same property under different terms, where the new terms are clearly intended to supercede the previous ones. This would end the old tenancy and start a new one.
- The tenant gives back the keys to the landlord and the landlord accepts these, relets the property, begins entering the property without asking the tenants’ permission
As the agreement is not in writing, implied surrenders are often open to grey areas and disputes.
They are also a kind of backstop to prevent landlords being ‘in limbo’ if a tenant suddenly abandons the property never to be seen again.
What counts as an implied surrender?
A landlord’s actions must clearly demonstrate that they believe the original tenancy is over.
Good examples of such behaviour are things that would be illegal if the tenancy was still in progress. For example, if the landlord began entering the property and using as their own home. Doing so would demonstrate their belief that the tenancy was over, since this behaviour would be illegal if a tenancy was in progress.
Even if the landlord entered the property and redecorated they could still take you to court for the unpaid rent and you would then have to defend yourself in court claiming that there was an implied surrender because of the actions of the landlord. It is easier to get an agreement in writing to surrender the tenancy and end your contractual liabilty for the remainder of the rent upfront.