What is a Deed Of Surrender?
When renting or letting a property, it is possible that circumstances will arise which require a tenancy to end earlier than originally intended or agreed. There are two ways to end an agreement. One is to give notice to the other party. Enter the Deed of surrender. Here we explain what a surrender deed is, when it should be used, how it works and what happens following its execution. These documents and agreements are important, particularly in the context of any dispute that may arise between a landlord or tenant. A deed surrender is often used in conjunction with another important document: a release and settlement deed. Our experienced property litigation team is happy to assist you if you are involved in a dispute with your tenant. We have a lot of experience and we continue to act on numerous disputes across the country. Contact a member from our property litigation team here at Helix Law and we will be glad to assist you. What is a Deed Surrender?
A surrender deed is a legal agreement between a landlord and a tenant to end a tenancy earlier. This document is not a “notice” and cannot be “served”. It is a contract that records an agreement for the termination of a land right. A deed of abandonment cannot be created if there is no agreement.
Parties use a surrender deed when their circumstances change and they need to regain possession or if there is an agreement for the tenant to vacate the property and leave it before the end of a term.
When Should a Landlord Use a Deed of Surrender?
There are many reasons why a landlord might want to use this document:
They may wish to sell and market the property without a tenant in situ. The landlord may negotiate to compensate the tenant for the remaining period of the contract if the tenant leaves.
The landlord may want to redevelop the property, which requires that it be vacant. The parties can use the document to end a tenancy if the landlord agrees. The parties may mutually agree to terminate the tenancy if, for example, their relationship has deteriorated, or if the tenant has failed in maintaining the property. It can resolve a court dispute if a tenant violates the lease terms.
How Does a Deed of Surrender Work?
- Usually, one party approaches the other informally about an early termination. If the other party agrees in principle, the finer details, including the date the tenancy will end, each person’s obligations, and any compensation, will need to be confirmed.
- You might ask, ‘Do we really need this?’. As litigators, we have seen that disputes are often the result of misunderstandings, uncertainty, or cynically, deliberate attempts to engineer certain risk into reality. Imagine a situation in which a tenant contacts you, the landlord, to confirm a relationship breakdown. They ask for your permission to terminate the tenancy. You are considering selling your house or completing a project, and you find it convenient. So, you agree. You agree. In the midst of all the chaos, the tenant asks you if they can keep some items on the property after the agreed-upon date.
- At the agreed date, you go to the property and take possession. You change the locks and then begin your remedial work. You receive a letter, seemingly out of nowhere, from solicitors funded by legal aid, acting on behalf the tenant, claiming that you have unlawfully removed them, leaving them without a home, and confirming that they are requesting an injunction as well as punitive damages, and legal costs totaling thousands of pounds. In the scenario above, you have no evidence to support your position. There is no formal contract and a considerable risk. Even if the landlord sent a few emails or texts, you are facing a substantial claim and will incur costs to defend your position. Even if you are successful, the tenant will be entitled to legal assistance, so you cannot recover your costs. You’re in a lose-lose situation. We deal with situations like the one above regularly on behalf of landlords. If there was a deed surrender (and/or deed settlement and release in the event of a dispute), you would be able to provide certainty, which would prevent tenants from making complaints. Legal aid funding is not available to them and a spurious or vexatious complaint would have a much higher chance of being resolved faster and cheaper. It may take some back and forth to reach a conclusion where the content of the surrender is agreed upon.
- The deed will vary in content depending on the property or situation. However, it will always include terms and conditions. To satisfy formalities, it must be stated that it is a surrender deed and both parties must sign before a witness who must also sign. While electronic signatures are widely accepted, it is recommended that you sign in ink. It must also be dated. The document must also be “dated”.
- We suggest that the parties meet on the day of the surrender to ensure that the property is empty and to receive the keys.
What obligations does the tenant have under the existing lease?
A surrender deed ends the lease. The lease ends when a deed of surrender is signed. The property is no longer subject to any rights or obligations. A deed does not automatically terminate the tenant’s lease obligations unless it is explicitly stated. This would be in a settlement and release deed, not a surrender deed. If, for example there are rent arrears or service charges up to the date and point of the surrender deed, unless it is explicitly stated otherwise, then the tenant will be responsible for the payment of those amounts up to that date.
Be careful and cautious to avoid any doubt or uncertainty. The condition of the property is also important, which is why a tenant should have left before signing a deed surrender. The landlord will also be responsible for all outgoings related to the property after the date of the surrender, including council tax and utilities if it is a residential property, or business rates and utilities if it is a commercial property. The landlord will also be responsible for all outgoings related to the property after the date of surrender–council tax and utilities if it is a residential property and business rates and utilities if it is a commercial property.
The lease may specify additional responsibilities, so both parties should check it carefully to ensure they meet all obligations before and after entering into the (any) surrender agreement.
What Happens Once the Deed of Surrender Has Been Signed?
Once the parties sign the agreement, the tenancy will end. The tenancy will end once the parties sign the agreement.
Any outstanding payments must be settled in the specified timeframe and the landlord will return any deposit to tenant. Other housekeeping issues, such as utility transfers should also be finalised.
After the parties deal with the above, they no longer owe each other any obligations or responsibilities under the existing lease.
Navigating the nuances surrounding surrender can be fraught. We have litigated cases where parties entered into a surrender deed too early, before vacant possession had been provided. The tenants’ circumstances have changed and they still haven’t vacated.
The landlord and tenant’s position is complicated both legally and factually. This creates complexity and risk in the landlord’s attempts to regain vacant possession. The tenant was not a criminal because they were allowed to occupy the property for a short time after surrender. In the context of residential properties, however, it is clear that none of the requirements of the landlord and tenant legislation were met. It was (and still is) a complex process.
It highlights the importance of having awareness and dealing with any surrender robustly.
Frequently Asked Questions
Who Drafts a Deed of Surrender?
Either party can draft the deed, but we tend to draft these on behalf of a landlord so that they have control over the content. In both cases, it is important that the person who will be signing the surrender deed hires a lawyer to do it.
Who can witness a surrender deed?
An independent witness must be at least 18 years old and not be a signatory to the agreement. They cannot be a relative or partner of the person signing the surrender deed. The witness cannot be someone who will benefit from the surrender.
Final thoughts
A surrender deed is a useful legal instrument that landlords and tenants can use to terminate a lease before the agreed-upon period. A deed surrender is often used in conjunction with a release and settlement deed. Together, they offer a structured, mutually agreed-upon method of ending the lease. This ensures that all parties are aware of their responsibilities and expectations.
Whether the document is prompted by a landlord’s desire to sell or the resolution of a conflict, or an unexpected change in circumstances for the tenant, it can be a practical solution that benefits both parties. To avoid future disputes, it’s important that both landlords and tenants understand the implications and formalities of the document.
If a deed surrender is appropriate for you, you need it drafted, or you believe you may be in a dispute and you are in a situation that requires one, you should contact our property litigation team. Our property litigation solicitors have been involved in disputes all over the country, and they use these documents and other documents to resolve problems just like yours. We’d be happy to help you.
