No Surrender
Background
The Housing Act 1988 requires that a tenancy may only be finally brought to end by one of two methods:- surrender or other action on the part of the tenant (e.g. notice to quit)
- order of the court
Express Surrender
Surrender may be expressly agreed where the parties mutually agree to terminate the tenancy. This agreement may be verbal, or can be achieved (for short leases of three years or less) simply by a written document or a 'declaration of surrender' with appropriate wording.However, express surrender is revocable in some circumstances so that, for example, where a tenant 'holds over' or remains at the property despite an express surrender, it will still be necessary for the landlord to obtain a court order to recover possession of the property.
Surrender by operation of law
Surrenders can also be implied or operate as a matter of circumstances - this is also called 'surrender by operation of law'.
Surrender will occur in this way where, for example, the tenant returns the keys to the landlord who then accepts them with the implication that the tenancy has come to an end. Similarly, surrender can also be implied when the tenant removes from the premises all signs of occupation, including furniture, belongings and any family or friends - or animals - who were living with him. This situation is called 'abandonment' and is discussed further below.
For a surrender by operation of law to be implied from the conduct of the parties to a tenancy, their conduct has to be unequivocal, and consistent with intentions on both sides to end the tenancy. In other words, there must be no doubt that both parties consider that the tenancy has ceased.
In this way, the law aims to protect the wronged or weaker party. Thus a tenant does not lose his tenancy rights simply by being away for a short period - all the facts of the case must point to the fact that he has given up his tenancy before surrender can be implied. Equally, the tenant, as in the recent Bellcourt case, cannot simply abandon the tenancy leaving rent overdue - surrender will only occur if the landlord accepts the surrender, or takes steps to forfeit the tenancy.
It is important that the actions of both parties show that they consider the tenancy to be at an end. Thus, there is no surrender when the landlord accepts the tenant's key 'without prejudice' to see if he can re-let the premises (Ref: Panther Lead Co [1896] 1 Ch 978); or where, after the tenant has left the property vacant, he changes the locks in order to render the property secure rather than to exclude the tenant (Revlock Properties Ltd v Dixon (1973) ).
Surrender and Regrant
The ancient rule known as implied 'surrender and regrant' is another situation where surrender takes place by operation of law. It applies where a landlord and a tenant enter into an arrangement that can only be achieved by the grant of a new tenancy; the existing tenancy is automatically surrendered, and a new tenancy agreement comes into existence even if the deal is not structured in this way.
Surrender and regrant occurs whenever the landlord and tenant(s) agree to a significant change to the terms or arrangement of a tenancy. This can occur, for example, with joint tenancies where one person leaves the group and is replaced by another joint tenant (see example opposite). For this reason, it is preferable to issue a new tenancy agreement in such cases, making it clear to all parties that a new tenancy has been created.
Abandonment
Abandonment occurs where the tenant(s) simply vacates the property, either at the end of the term or even during the term, perhaps with rent owing, and no return of keys or other notification of moving away. It is a situation which often plagues landlord, and because every situation is different, there are few hard and fast rules which apply.
Abandonment does not always imply surrender. The landlord may believe that the tenant has given up occupation but belief must be both genuine and reasonable before the landlord physically takes back the property. Unless the evidence of surrender is unequivocal, any landlord doing so takes a risk. Proceedings for unlawful eviction could be brought by the displaced tenant unless the landlord can be certain that the tenant has ceased to reside in the premises. The landlord must therefore make sufficient checks and take reasonable steps to ensure that the tenant has vacated the property before he can take it back and relet it.
On the other hand, a tenant cannot simply walk away from a tenancy - he remains liable for payment of rent until the end of the tenancy, or until the tenancy is otherwise brought to an end (and it is clear that both parties consider the tenancy to be terminated).
In the recent Bellcourt case, the tenant abandoned the property in November 2000, just three months after signing a lease on the property. Having finally forfeited the lease one year later, in November 2001 for non-payment of rent, the landlord sued his ex-tenant for the arrears of rent from the date upon which the tenant vacated the property up to the date of the forfeiture. The tenant, argued that she had simply left and surrendered the lease and that the surrender was accepted by the landlord. The Court of Appeal overturned the original decision, ruling that mere abandonment of the premises by Ms Adesina, the tenant at the time, did not amount to an implied surrender. The tenant remained liable for payment of the rent until November 2001 when the landlord finally acted to forfeit the lease.
Although the landlord was aware of the abandonment and had not acted on the information that the tenant had abandoned the premises, the court held that there was no evidence of unequivocal acts on the part of the landlord to suggest that it accepted that the tenancy had ended.
The Court restated the legal position in such circumstances:
Abandonment of the premises by the tenant without more (even if rent is unpaid) is not surrender, because the landlord may wish the tenant's liability to continue. Nor is delivery of the key of the premises to the landlord enough by itself. Even if he accepts it, it must be shown that he did so with the intention of determining the tenancy and not merely because he had no alternative ...
So, the case hinged around whether there was unequivocal conduct of both parties which was inconsistent with the continuance of the existing tenancy. The tenant's desire to be rid of the tenancy was almost certainly unequivocal but the conduct of the landlord was not.
Surrender: Case Examples
Example 1: The tenant is offered a job abroad and wishes to terminate the tenancy before the end of his fixed term. Since the landlord is confident of finding a new tenant quickly, he agrees to release the tenant from the agreement and allows the tenant to leave at the end of the month. The tenancy is terminated by express surrender.
Example 2: Peter and John share a flat which they rent under a joint tenancy. John wishes to leave and rent his own place so Peter finds a new tenant, William to take his place. William continues to pay the rent in the place of John and the landlord agrees to this new arrangement, substituting William's name on the tenancy agreement in the place of John. In reality, a new tenancy has been created under the principle of surrender and regrant, the old tenancy being surrendered by operation of law.
Example 3: A couple held a periodic assured shorthold tenancy under the Housing Act 1988. The tenants got behind with their rent, and decided to leave the property. They posted the keys through the landlord's letterbox, and promptly left the property. The landlord brought legal action against the tenants for rent arrears, damage to the property, and rent in lieu of notice.
The tenant argued that the return of keys to the landlord represented a surrender of the tenancy and that no further rent was due in lieu of notice.
The Court held that the return of keys to the landlord did not constitute surrender in this case. The landlord had not indicated that he accepted the keys on this basis, or agreed to the surrender. The court confirmed that the tenant of a periodic tenancy is required to give formal notice to the landlord; the requirements for such notice are that it must be in writing, it must expire on the last day (or the next day) of the tenancy period, and it must be not less than one calendar month for a monthly tenancy (four weeks for a weekly tenancy). Although there was no formal notice, the court held that in this case, where a periodic tenancy existed, the return of the keys acted not as surrender but as an implied notice to quit from the tenant, acting to bring the tenancy to an end at the earliest opportunity available to the tenant had he given the landlord a valid notice to quit.
(Laine and Mitchell v Cadwallader, 2001)