Newspaper article The Journal (Newcastle, England)

Accepting Keys from Tenant Could Be Sign of Surrender; PROPERTY BRIEFING

Newspaper article The Journal (Newcastle, England)

Accepting Keys from Tenant Could Be Sign of Surrender; PROPERTY BRIEFING

Article excerpt


SOMETIMES a landlord may find they are in the unfortunate position, of having a struggling tenant, who wants to surrender a lease or tenancy agreement.

The tenant simply vacates the premises and hands back the keys. What should the landlord do? In such circumstances, the landlord and their agent must be very careful not to do anything that may inadvertently give effect to the tenant's wishes - the surrender of the lease.

A surrender can occur in one of two ways, either expressly by deed or by operation of law.

The effect of a surrender is, of course, that the tenant's right to occupy ceases and the lease or tenancy is terminated.

An express surrender will be formally documented in some way. There is, however, nothing to stop a landlord and tenant effecting a surrender by operation of law, without any formal documents.

It is where the parties behave in a way that is inconsistent with the continuation of the lease, that problems arise. This usually happens when the tenant wants to be rid of the lease, but the landlord does not.

For a surrender by operation of law to be effective, both parties' actions must be unequivocally inconsistent with the continuation of the tenancy.

Where there is an agreement between the landlord and the tenant that the surrender will be effected by operation of law, the usual practice is for the lease and the keys to be returned to the landlord.

There has been a recent case - Artworld Financial Corporation v Safaryan and Others - which shows some of the pitfalls that await the unwary landlord.

The property in this case was a large Victorian house in Holland Park, London. At the time, it was let to a tenant for three years at a rent of pounds 390,000 per year.

The tenant had made various complaints regarding the failure by the landlord to carry out certain repairs relating to central heating and the swimming pool.

Because the repairs had not been undertaken, the tenant claimed that it was entitled to treat the lease as ended and vacated the property, returning the keys to the landlord. …

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