A tenancy can be brought to an end by either the landlord or tenant in three ways:
- End of term – by the natural effluxion of time
- Unilaterally – either party gives notice to the other that they wish to terminate the tenancy, or the landlord forfeits the tenancy due to breach of a term of the tenancy agreement
- Surrender – both parties voluntarily agree to bring the tenancy to an end.
If the landlord and tenant have agreed a fixed term tenancy with no break clause or other provision in the agreement providing for early termination, the parties will generally be contractually bound by the agreement and the tenancy will come to an end only when it has run its course and expired by effluxion of time.
However, provided that both parties agree, the tenancy can be terminated early by mutual agreement. The parties will both surrender the tenancy, and once surrender has taken place all obligations and rights under the tenancy come to an end.
Surrender is actually the most common method by which modern residential tenancies are terminated.
In law, a tenancy is brought to an end by surrender when the landlord and tenant both agree that the tenant should yield up possession of the property to the landlord. Importantly, surrender can only occur by mutual agreement; if both parties do not agree to the surrender then surrender cannot occur. However, agreement can be expressly or impliedly communicated.
A deed is usually used in order for a tenancy to be surrendered, but a tenancy for a term of less than three years does not require a deed. However, section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 requires that a written document or a ‘declaration of surrender’ is signed. More commonly, however, surrenders are implied or operate as a matter of circumstances.
If the tenant does not give up possession of the property to the landlord, despite surrendering the tenancy, the landlord is still required to obtain a court order to recover possession (unless the tenancy is an excluded tenancy pursuant to section 3A Protection from Eviction Act 1977.
Surrender by operation of law
A surrender will operate as a matter of circumstance where it is implied from the conduct of the parties. This implied surrender is regarded as a surrender by operation of law.
Where, during the term of an existing tenancy, the parties enter into a new tenancy on different terms from those of the existing tenancy, the existing tenancy is surrendered.
The essence of a surrender by operation of law is the consensual giving up of possession of the premises to the landlord by the tenant. It is normally important that the landlord does some act in accepting the surrender.
In order for the circumstances to imply that both parties agree to a surrender, it is important that the actions of both parties show that they consider the tenancy to be at an end. The conduct of the parties has to be unequivocal, such as the tenant returning the keys to the landlord or removing from the premises all signs of occupation, including furniture, belongings and any family, friends or pets who were living with him. The landlord must then clearly accept the tenant’s surrender, such as by accepting the keys.
There is no surrender where the landlord accepts the keys ‘without prejudice’ in order to see whether he can re-let the property, or where, after the tenant has left the property vacant, the landlord changes the locks in order to render the property secure rather than to exclude the tenant.
Before the landlord takes back the property, his belief that the tenant has surrendered the tenancy must be both genuine and reasonable. Unless the evidence of surrender is unequivocal, any landlord taking back the property takes a risk. Proceedings for unlawful eviction could be brought by the displaced tenant unless the landlord can be certain that the tenant has ceased to reside in the property.
The situation where the tenant simply vacates the property, either at the end of the term or even during the term, perhaps with rent owing, and no return or other notification of moving away presents an occasional and troublesome problem for landlords. Technically, this is known as abandonment. Abandonment of the property by the tenant may result in the operation of surrender, but great care must be taken. It would not be safe for the landlord to always assume that the tenant has abandoned the tenancy; it is possible that the tenant could be in hospital, in prison for a short period or on an extended holiday.
The outcome hinges around the issue of unequivocal conduct; for surrender to take place or be implied by the actions of the parties the conduct must be unequivocal in showing that the tenant has given up occupation.
‘Unequivocal conduct’ means conduct on the part of both the landlord and the tenant which is inconsistent with the continuance of a tenancy. Faced with a tenant who appears to have abandoned a property, the landlord will need to make sufficient enquiries so that he can prove that he believed and had reasonable cause to believe that the tenant had ceased to reside in the property.
There are no finite rules; evidence in the form of the presence or absence of the tenant’s belongings remaining in the property, the tenant’s conversations with neighbours or other regular callers to the property must all contribute to give the landlord reasonable cause to believe that the tenant has ceased to reside there.
Where there is reasonable doubt as to whether a tenant has permanently vacated the property and it is impossible to obtain express surrender, the safest solution is to terminate the tenancy by some other method, such as a notice requiring possession (if applicable) and commence possession proceedings.
Section 5(3) of the Housing Act 1988 provides that if an assured tenancy which is a fixed term tenancy comes to an end otherwise than by virtue of:
- an order of the court, or
- surrender or other action on the part of the tenant
then the tenant is entitled to remain in possession of the dwelling-house.
Therefore, where it is clear that a tenant has surrendered the tenancy, the landlord is entitled to possession. Where the act of surrender is less obvious or equivocal, then care needs to be taken before the landlord takes back or re-lets the property.
For further information, see Abandonment.
All of the joint tenants to a joint tenancy must agree to a surrender in order for it to be effective. If one of several joint tenants offers to surrender the lease, the surrender will not be effective without the agreement of the other joint tenants. If the landlord tries to retake possession, the tenants may take action for unlawful eviction.
However, where the joint tenants owe a substantial amount of rent and one of the joint tenants has been absent for a long period of time, it may be possible to infer that he has given an authority to the others to surrender.
Liability to pay rent
The tenant’s liability to pay rent continues until the landlord accepts the surrender, subject to the natural expiry of the tenancy agreement. This may assist the landlord in obtaining express surrender from a departed tenant, who may be motivated to return keys and formally surrender the tenancy rather than incur further debt.