Lease Surrender Negotiations

We are often instructed by landlord and tenants to negotiate terms for the purposes of bringing leases to an end early. The ‘surrender’ of a lease is in essence a consensual agreement. When a lease is surrendered the lease term comes to an end and the tenant’s interest passes to its landlord.

If you’re currently occupying commercial property that you no longer need, you may be considering the possibility of terminating the lease early.  As a tenant, you will be concerned about the financial implications of terminating your lease early. On the other hand, your landlord will be concerned about the loss of a reliable revenue stream and the challenge of finding a new tenant.

 At JCP Solicitors, we help both landlords and tenants negotiate lease surrender terms. At JCP, we will draw upon our extensive knowledge and experience in this area to negotiate terms that facilitate your individual commercial needs and objectives.

An agreement to surrender must be in writing pursuant to Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Recording the terms of the surrender in writing ensures that both the landlord and the tenant have certainty in their dealings going forward. However, it is also possible for a surrender to be effected pursuant to the actions of the landlord and tenant, known as a surrender by operation of law. A surrender by operation of law may occur where the actions of the landlord and tenant amount to an acknowledgement that the tenancy has ended.

When dealing with the surrender of a lease it is important to consider any third party interests including that of a mortgagee.

On most occasions where the landlord and tenant have agreed to bring the tenancy to an end early, a formal surrender deed should be signed to give both the landlord and tenant certainty in their dealings going forward. Our solicitors will assist in drafting this deed on your behalf to ensure it meets your needs and provides you with certainty moving forward.

  • Rhys Evans
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  • Jonathan Flynn
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  • Benjamin Davies
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  • Kieren Palfrey
      • Kieren Palfrey
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Lease surrender for tenants

With high vacancy rates and a fall in demand, it’s unsurprising that many landlords are reluctant to allow a tenant to surrender their lease without paying a premium. However, if you need to terminate the lease early due to a change in circumstances, we will endeavour to negotiate terms of surrender with your landlord.

Lease surrender for landlords

If your tenant has requested a lease surrender, it’s vital to consider what consequences this could potentially hold prior to any negotiations. You will need to assess the current property market to determine whether there is a current demand for this type of commercial property, and if not, what your strategy will be in securing another tenant. It will be a commercial decision for a landlord to make as to whether a surrender will be agreed. The landlord can refuse to surrender.  If the landlord can let the property for a higher rental, or even on the same rent but with a premium payable by the outgoing tenant surrenders can work for both landlords and tenants. When dealing with the surrender of a lease it is important to consider any third party interests including that of a mortgagee. With both local and national property intelligence and a proven track record for resolving disputes between landlords and tenants, you can rely on our team to ensure the terms of the lease surrender reflect your commercial and practical requirements.

Get in touch with the commercial property dispute solicitors at JCP today for assistance and advice through lease surrender negotiations.