What if a tenant wants to leave before the end of the tenancy

Even the best tenants can fall on hard times, and if their circumstances change, they could make a request to terminate the agreement earlier than the end of the fixed term.

If there is no break clause in the contract allowing the tenant to serve notice, then the landlord has two options:

1. Agree to the surrender, this could be on certain terms
2. Refuse the tenant to leave early

Each case should be considered on an individual basis. For example, there could be a case where the tenant has lost their job and has confirmed they are unable to pay the rent going forward. If there is no guarantor, and no Rent and Legal Protection in place then then the landlord should consider their next steps carefully.

The landlord could choose to stand firm that the tenant signed a contract for a fixed term and go through court proceedings to obtain a possession order and seek a money judgment for the rent arrears. However, the court process is incredibly slow so a several months rent could be outstanding by this point. The landlord would then need to try and recover this money and they should look at prospects of getting the money back. If the tenant has no job, no assets and does not own any property then paying to recover the money could be throwing good money after bad.

Of course, the tenant’s circumstances could change in the future and landlords could explore again at that point, but the landlord will be out of pocket significantly until that happens and a successful recovery is made.

Alternatively, the landlord could choose to agree a surrender with the tenant and then re-let the property to a new tenant. The landlord is happy as they are receiving their rent, and the previous tenant isn’t getting into further debt and risking a CCJ in their name.

What is a surrender?

A surrender is an agreement between the landlord and tenant (and possibly also a guarantor) to bring the tenancy to an end. 

The agreement (whether signed as a deed or simple contract) sets out the terms of the surrender, such as:

– when the tenant will vacate the property

– what happens to the deposit

– whether any money is owed to the landlord

– whether the tenant and guarantor, if any, are still liable for any breaches committed during the tenancy after the surrender. 

Once all the necessary parties have signed the surrender and the tenant has vacated the property, the tenancy will be surrendered. 

This is a useful tool for landlords and tenants to bring matters to a close on mutually agreed terms without the need for possession proceedings.   Surrenders remain a great alternative to possession proceedings, especially if courts continue to face a significant backlog of possession claims. They should however be carefully and tactically drafted to minimise the risk of default by the tenant, and to tie up all issues in dispute between the parties where possible.

Top Tips

It is often the case that issues are easier to resolve at the early stages. If a tenant is already in five months or so rent arrears, then they are less likely to engage with a settlement.

It is therefore recommended that as soon as the tenant falls into rent arrears, or confirms that they are suffering financial hardship, consider all options available such as surrenders, or payment plans rather than just focusing on court action.

Keep the lines of communication open with the tenant and if contact is made at the early stages there is more chance of keeping the relationship with the tenant positive and working together to reach a resolution. There will be some situations where court unfortunately cannot be avoided and if it is clear that a settlement is not going happen, then it is advised to serve notice as soon as possible.

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