Tenancy surrenders occur when the landlord and tenant agree to end the tenancy before the official length of the contract.
There are two main types of tenancy surrender – negotiated (or ‘express’) and implied.
Negotiated tenancy surrenders
A negotiated tenancy surrender takes place when a tenant needs to leave their home before the agreed tenancy period is up. This is formally known as an ‘express surrender’.
This could happen for a whole host of reasons. The tenant may need to leave for personal or work reasons, or there may be a serious problem with the property, landlord or agent. Often it happens when couples split up and the partner remaining in the property can’t afford the rent alone. Whatever the case, a surrender allows landlord and tenant to part ways without either being in breach of contract.
The official bit just involves both parties signing a short formal document known as a ‘deed of surrender’. The tricky part can be agreeing the terms that surround it. Because tenancy surrenders usually take place in non-standard circumstances, both sides will need to pay attention to this.
In some ways, a tenancy surrender is a little bit like a Section 21 repossession in that, while the deed of surrender doesn’t apportion fault for the tenancy coming to an end, that doesn’t mean there isn’t any. Obviously the tenant’s desire to end the tenancy may have nothing to do with the landlord, but equally the process is quick and easy, and tenants may use it in circumstances where the landlord is in breach of contract and they just want to be able to find a new home ASAP without getting sucked into the often slow and time-consuming business of enforcement action.
Charging fees for an express surrender
Disputes often revolve around whether the tenant will pay the landlord compensation for ending the tenancy early. It’s a valid question, since not only will the landlord probably have some void time to deal with, but they may also have paid letting fees and various administrative costs up-front for the whole of the tenancy.
Since the Tenant Fees Act 2019, there have been very strict rules about what landlords and agents can or can’t charge in terms of fees, and tenancy surrenders are covered in Schedule 1, Section 7.
Under these rules, tenants can be charged for the ‘loss suffered by the landlord as a result of the termination of the tenancy’ and the ‘reasonable costs of the letting agent in respect of the termination of the tenancy’. This would imply that the tenant could be asked to cover rent for the void period, plus remarketing and re-letting costs, but could not be charged inflated penalty fees.
Even fees like these will need to be agreed in advance on a case-by-case basis. For example, as above, a tenant may ask for a surrender because the landlord or agent has fallen short of professional standards, and if this is the case then any charges are clearly not appropriate.
Does the landlord have to allow a tenancy surrender?
Not at all. A tenancy agreement is a binding legal contract and if the landlord doesn’t want to let the tenant get out of it then they don’t have to.
In real-world terms, there are obviously plenty of reasons why they would. Apart from anything else, it’s often the decent thing to do, but also tenants often ask for a tenancy surrender because their situation has changed and they can no longer afford the rent. If the landlord refuses to let them leave, they’re likely to end up in arrears, when a timely surrender might have allowed new tenants to move in and minimised the financial damage for everyone concerned.
Implied tenancy surrenders
An implied surrender is when both the landlord and tenant make it clear by their words and/or actions that they are agreeing to end the tenancy, even though they don’t actually sign a deed of surrender.
From the tenant’s side, this might be demonstrated by moving out, removing all their belongings, stopping rent payments and returning the keys. From the landlord’s side, it could be as simple as accepting the keys – but as with an express surrender they’re perfectly within their rights to refuse the tenant’s offer of surrender and insist that the contract continues until its official end.
Implied tenancy surrenders are often connected to what’s known as tenancy ‘abandonment’ – where the tenant does a runner – and these can be fraught with difficulties. This is because the tenant’s intention to surrender the property has to be absolutely unambiguous for it to be deemed an implied surrender, and it frequently isn’t.
Tenants might stop paying rent, may move out and may even take all their stuff with them, but if they’ve held onto the keys then they may still be intending to return. They’ve almost certainly broken their tenancy agreement, but breaches of contract don’t cause a tenancy to end. If a landlord re-lets the property and the old tenant subsequently decides to come back before the end of their contract, the new tenancy constitutes an unlawful eviction and a criminal offence.
Abandonment is a much wider issue, but in general landlords need to tread very carefully – remembering that if a tenant has gone missing, so has their side of the story. While it’s tempting to think the worst of people, there are actually loads of reasons why a tenant might do a vanishing act. They might have had an accident or been taken suddenly ill, they may be in prison, or they may have had some other crisis that’s prevented them from contacting the landlord. The key thing to remember is that if there’s any doubt about an implied surrender then it probably isn’t one.