Surrender of a Commercial Lease
- AuthorJonathan Flynn
It isn’t uncommon for a struggling commercial tenant to think that they can simply hand back the keys to a property in a bid to escape their obligations under their lease. This, clearly, leaves a landlord in a bind, and our highly experienced Property Litigation Team can advise you on the best course of action to take if this happens to you.
Can you pre-empt your tenant simply handing back the keys?
If your tenant has intimated that they are considering surrendering their lease, it is wise to sit down with them to negotiate to see if you can come to an agreed resolution. Your tenant also has the option, if they are considering surrendering the lease, of finding another tenant to whom the lease can be transferred if their Lease permits this.
How does Surrender of the Lease Work?
A lease is surrendered when the tenant’s interest in it is transferred back to the landlord, with both parties accepting the surrender. This can be done by way of a legal deed. Or, if both landlord and tenant agree that the lease is going to be surrendered this will happen ‘by operation of law’. This requires a clear act of severance, which might include:
- The landlord allowing another tenant to use the property and carry out redecoration
- A head landlord accepting rent from sub-tenants who are paying rent directly to the head landlord
- The landlord occupying the property because the tenant has left
- The landlord letting out the property to a third party, at the request of the original tenant
What should I do if my Tenant simply leaves?
It is vital that you, as a landlord, seek legal advice swiftly under these circumstances. Our Property Litigation team is on hand to help you deal with this issue appropriately and to help you reach a satisfactory resolution. It is important that you make it clear that even if you now hold the keys you do not accept this move by your tenant as a formal act of surrendering the lease.
What can I do about unpaid rent?
We can guide you through the process of rent demands and pursuing arrears, to ensure everything is done in order to ensure you use the correct avenues to pursue recovery of the arrears. Even if you accept the surrender of the lease, you can still pursue unpaid rent or any outstanding charges. You may also be able to pursue the tenant’s guarantor, but this is a complex area of law with strict time limits which must be followed, our experienced legal team can support you each step of the way.
Can I secure my property?
Clearly, if you do not want to be in a position to accept your tenant’s surrender of the lease, you need to be careful how you then secure your property, as some actions could be construed as acceptance of surrender. We can guide you through the right course of action under these circumstances.
Clearly, this can be a delicate process and our Property Litigation team is on hand to provide clear, friendly advice at every stage. We are equally happy to liaise with you in English or in Welsh, and to do so in a way that suits you best – whether this is in person, over the phone, or via email.
JCP Solicitors offices can be found throughout South, East and West Wales, including in Swansea, Cardiff, Carmarthen and Caerphilly.