Lease surrenders

The following Property practice note provides comprehensive and up to date legal information covering:

  • Lease surrenders
  • What is a lease surrender?
  • Express surrender
  • Surrender by operation of law (Implied surrender)
  • What conduct might or might not result in a surrender by operation of law
  • What should the tenant do if they want to surrender their lease?
  • What should the landlord do if the tenant wants to surrender their lease?
  • Agreement for surrender
  • Lease with security of tenure
  • Conditionality issues
  • More...

Lease surrenders

What is a lease surrender?

A lease surrender is a mutual agreement between the landlord and the tenant that the lease will determine before the end of the term and in a manner not set out in the lease (eg by exercising a break option, etc).

There are two types of surrender—express and implied:

  1. an express surrender is achieved formally, usually by deed, although this is not always necessary. See: Express surrender

  2. a surrender by operation of law—also known as an implied surrender—occurs when the landlord and tenant by their unequivocal conduct demonstrate that they no longer regard the lease as continuing between them. See: Surrender by operation of law (Implied surrender)

A surrender is therefore often a negotiated agreement in circumstances where the tenant is otherwise not able to divest itself of the lease. It will often depend on the goodwill between the parties and a mutual desire to determine the lease prematurely. For some properties (often shopping centres), landlords include a provision in the lease requiring the tenant to offer to surrender the premises back to the landlord before seeking consent to assign to a third party. See: Alienation—a practical lease negotiation guide and Practice Note: Offer back clauses.

What happens when a lease is surrendered:

  1. the tenant’s interest is transferred back to its immediate landlord

  2. both parties accept that the lease will be

Related documents:

Popular documents