Surrendering a Tenancy Agreement by Mutual Consent

There are two main ways to end a tenancy in England and Wales: either by serving notice or by mutual agreement. If one party wants to end the tenancy, it’s important to follow the contract closely to ensure everything happens fairly and smoothly.

However, if both the landlord and the tenant agree to end the tenancy through mutual surrender, they don’t need to stick to the contract’s specific rules, like how much notice to give.

Most tenancies end with both parties agreeing to surrender the contract. This guide will explain how to do this and how to end a tenancy early using a deed of surrender.

And to make things even easier, you can download our free deed of surrender template, helping you keep everything simple and properly documented.

1. Mutual surrender of a tenancy agreement
2. Express surrender
3. Implied surrender
4. Surrendering a tenancy when the tenant abandons the property

Mutual surrender of a tenancy agreement

There are various reasons why a mutual surrender might be considered:

• The tenant’s circumstances have changed, and they wish to end the tenancy agreement early (i.e., move out before the fixed term ends)
• The landlord unexpectedly needs the property back before the fixed term ends
• The tenancy has become periodic, but both parties prefer not to end it on the final day of a rental period

In such situations, the landlord and tenant must come to a separate agreement together, rather than one party simply giving notice to the other.

A mutual surrender can occur in one of two ways: ‘express’ or ‘implied’ surrender. Let’s explore both of these options.

Express surrender

An express surrender occurs when the landlord and tenant agree on the terms of ending the tenancy in writing in a deed.

It’s highly recommended to formalise the surrender in writing because those without a written agreement (implied surrenders) can be much more complicated.

Specifically, a landlord must clearly state the conditions under which they will retrieve the keys. For instance, if a landlord relets their property to new tenants shortly after the previous ones leave and then tries to hold the original tenants responsible for losses during the vacant period, it might be considered that the original tenancy ended when the property was relet.

Moreover, if the landlord doesn’t ensure the situation is clear, the courts may deem that they’re illegally evicting the tenant.

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For example, if the tenant returns the keys to the landlord without explicitly stating that the tenancy has ended, and the landlord subsequently changes the locks, if the tenant then attempts to regain access to the property, it could be concluded that the landlord is illegally excluding the tenant from the property.

Once again, the main problem here is that the actions of both parties didn’t clearly show that the tenancy was over. 

A well-written deed of surrender should help landlords avoid such problems.

What to include in a written express surrender of tenancy

To be as complete as possible, any tenancy surrender should include the following:

Basic details

• The address of the property
• The names and addresses of all the parties involved

Terms

• The date that the agreement will end
• The terms under which the agreement ends
• In particular, whether any further payments are due from the tenants (such as further rent payments, money from the deposit, or a lump sum agreed to cover the landlord’s costs)
• Whether any of the obligations under the tenancy remain, or whether they will be discharged in full once the document is signed

Signatures

• The signatures of all parties
• The date that the document was signed
• Under what conditions the document will be considered legally binding (e.g. only when signed and dated by all parties)

Is it necessary for the surrender agreement to be executed as a deed?

The Law of Property Act 1925 section 52 requires that most ‘conveyances of land or of any interest therein’ (which includes both leases and releases) must be made by deed (with certain exceptions, such as surrender by operation of law).

Signing as a deed includes further requirements, such as the need for the document to be signed in the presence of a witness.

Tenancies of less than three years don’t need to be created by deed, but this exclusion focuses on the creation rather than surrender of a lease; so the surrender of a tenancy is best made by deed, even if the tenancy itself was created by a different method.

In practice, agreeing the surrender in writing but not as a deed usually provides a clear indication of the parties’ intentions. This approach also makes it significantly more challenging for the tenant to argue that their actions aligned with the tenancy continuing.

However, given the technical requirements of the legislation, signing as a deed with witnesses is advisable whenever possible.

Implied surrender

This is a more complex scenario and should be avoided if possible.

Remember, a surrender occurs when both the landlord and tenant agree to end the tenancy. The best way to do this is through a written agreement whenever feasible. However, legally, such an agreement can also be implied from the behaviour of both parties.

An implied surrender happens when the actions of both the landlord and tenant indicate their mutual agreement that the tenancy has ended – this is also known as ending the tenancy by ‘operation of law’.

Examples of implied surrender include:

• The landlord and tenant sign a new contract for the same property with different terms, clearly showing the intention to replace the previous agreement. This would terminate the old tenancy and establish a new one
• The tenant returns the keys to the landlord, the landlord accepts them, relets the property, and begins entering the property without seeking the tenant’s permission

Because such agreements are not written, implied surrenders often lead to ambiguities and disagreements.

They also act as a safety net to prevent landlords from being left uncertain if a tenant suddenly abandons the property without notice.

What counts as an implied surrender?

For an implied surrender to occur, the landlord’s actions must clearly demonstrate that they consider the original tenancy to be terminated.

Examples of such behaviour include actions that would be illegal if the tenancy was still ongoing. 

For instance, if the landlord starts entering the property and using it as their personal residence, it indicates their belief that the tenancy has ended. This behaviour would be illegal if the tenancy was still in progress.

Surrendering a tenancy when the tenant abandons the property

When a tenant suddenly leaves the property and stops paying rent, this is often referred to as ‘abandonment’ or ‘abandoning the property’.

However, if the tenant is simply on an unannounced three-month holiday without paying rent, reletting the property could lead to a complicated situation when they eventually return.

What to do if you suspect the tenant has abandoned your property 

If you suspect that your property has been abandoned, the first step is to attempt to contact the tenant. It’s important to confirm whether the tenancy has indeed been permanently abandoned.

Keep in mind, that if you assume possession of the property before the tenancy has legally ended, you will not be able to claim rent for that same period.

For example, if you believe the property is abandoned in June and move back in during July, you cannot also demand rent from the tenant for July.

Two ways to end an abandoned tenancy

If contacting the tenant is not feasible and there are strong indications of abandonment, there are two main ways to terminate the tenancy to relet the property.

The first is eviction, using either Section 8 or Section 21 eviction notices. If it’s possible to serve a Section 21 eviction notice (e.g., the tenancy is nearing the end of the fixed term or it’s become periodic), then it is advisable to proceed with this as quickly as you can.

Once a property is abandoned and rent is no longer being paid, landlords typically have the option to serve a Section 8 eviction notice due to non-payment of rent. 

Additionally, other tenancy terms may have been breached, such as the common term of not leaving the property vacant for more than two weeks without notifying the landlord in writing.

After your eviction notices have expired, you can apply to court for a possession order of the property.

The second method involves implied surrender, as discussed earlier. If the tenant has vacated the property, stopped paying rent, and the landlord has, for example, regained possession, changed the locks, relet the property, and is no longer seeking rent from the original tenant, then this indicates they both believe the tenancy has ended.

Whether through eviction or implied surrender, it’s crucial for the landlord to avoid any appearance of harassment or unlawful eviction of the tenant.

Therefore, before changing locks or reletting the property, the landlord must ensure they have made every reasonable effort to contact the tenant and are fully satisfied that the tenant’s actions don’t align with the continuation of the tenancy.

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In every case, this article refers to Assured Shorthold Tenancies (ASTs) created under the Housing Act 1988 in England and Wales. Different rules could apply to other types of agreements.

This article is not intended to provide advice about what you should do in a particular situation. If you need to surrender a tenancy and are unsure of the next steps, we always recommend taking independent legal advice.

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