Surrender of Tenancy Agreement
Make Text BiggerUPDATED – 28th May 2019 – this is still as valid today as it was when first published on 21st August 2014.
I have just helped my brother to draft a Surrender of Tenancy Agreement, you can download a copy at the foot of this article, but the story behind it is an interesting one too.
The property was purchased at auction a few years ago, it was an absolute bargain but it’s 250 miles away from where he lives. It was refurbished but rather than sell it and make a quick profit he decided to hold it as an investment. Note that my brother is a property developer and pays the additional rate of tax so if the property had been flipped the profits made would have been taxed at the additional rate as trading income, OUCH! By letting it as an investment and selling it later on the profits would be taxed at the 28% CGT band, less the annual CGT exemption for him and his wife – no brainer!
The first set of tenants were great and stayed just over two years. The property was re-advertised but the second time around the tenant demand was lower. My brother was ready to go on a four week holiday and had considered selling the property on his return. However, a few days before he left a couple made an application to rent the property. The basis of referencing was that rent would be 50/50. She passed referencing but he failed. A commercial decision was taken to accept them anyway subject to 6 weeks deposit. Better than a void period right?
A month into the tenancy Mrs Tenant cheated on Mr Tenant so he left her and went back to Mum. Rent payments became sporadic and she would text day and night with excuses and looking for emotional support. Arrears never quite got to two months so there was little that could be done in terms of serving notice and possibly having to apply apply to the Courts for a possession order until the fixed tenancy period expired. Fortunately, she decided that enough was enough after four months, she didn’t like being in debt and wanted to go back to Mum and surrender her tenancy. A lucky escape for my brother to say the least, he was only too keen to agree!
An agreement was reached amicably, i.e. the tenants would be released early from the tenancy and my brother would keep the deposit to offset the majority of the rent arrears. This still left a few hundred pounds of arrears but my brother agreed to write that off. Thankfully she was very clean and tidy so the flat is fine. It’s now on the market for sale and will probably be snapped up by another landlord or first time buyer in the area. It’s a cracking little property. [UPDATE – the property was indeed sold very quickly to another investor]
Being a shrewd landlord my brother wanted to get everything properly documented so that nothing could come back to haunt him further down the line, e.g. husband learning that wife had moved out and him moving back in or claiming illegal eviction etc. I helped my bother to put the agreement together and he’s buying the beer this weekend – he doesn’t know that yet though 😉
By the way, I did run the agreement past my barrister friends, just in case you’re wondering. He gave it the thumbs up with no suggested amendments **oh how I wish I knew how to do a smug smiley right now**
If you would like a copy of the Tenancy Surrender Agreement for your files, just in case you ever encounter a similar issue, then you can download it by completing the form below. My brother wants nothing out of this but he has asked me to charge £5 per download for the agreement template and for us to use the money to subsidise the running costs of Property118.
You probably don’t need the template today but why not download it anyway? You will be helping to support Property118 and you will have it on file if you ever need it. If you wait until you need it then you may struggle to find this article again so do it now 🙂 It’s only a fiver!
Tenancy Surrender Agreement Download
EDITORS FURTHER NOTE
The heated debate with “Industry Observer” was eventually concluded on page 5 of the comments thread!
Mohammed Karimuddin
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Sign Up9:41 AM, 3rd October 2014, About 10 years ago
As requested earlier I have to serve a notice under section 166 to demand ground rent on one of the properties. Ground rent is payable by the lessee on 31 December each year. I am confused with the dates of issuance of the notice and period. Please help.
Industry Observer
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Sign Up10:57 AM, 3rd October 2014, About 10 years ago
Having done Mark's Surrender Agreement to death, and on further discussion with him realised that it is for use primarily with MyDeposits and is signed by a tenant as part of the check-out procedure with them, for what it is worth it has my endorsement too.
Clearly if the deposit is with DPS it will change things, and the tenant will always have the right to go to dispute with any Scheme, that right they cannot sign away. But the document is good and I can see how it could be a useful tool even if only as evidence in the unlikely event the tenant does try to disown it.
Mark Alexander - Founder of Property118
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Sign Up11:31 AM, 3rd October 2014, About 10 years ago
Reply to the comment left by "Industry Observer " at "03/10/2014 - 10:57":
Thanks for adding your endorsement.
There is a risk that some less scrupulous landlords will attempt to use the agreement to screw more than they can reasonably claim from tenants but as you know, I do not support such practice and I tend to find that those sorts of people reap as they sow eventually. That's also the reason why the fiver doesn't include defending claims.
As you know, I've never been a fan of DPS. There are several scenarios where the custodial scheme can really mess up a landlords cashflow. For example, where the tenant fails to pay his last months rent and then ignores all correspondence from DPS regarding the release of the deposit. This deprives the landlord from cashlow for at least 6 months 🙁 In my opinion, that is just one of the reasons why significantly more landlords choose to pay a premium for the insured deposit protection schemes, i.e. possession being 9/10ths of the law.
Offline we discussed why the Tenancy Surrender Agreement is written in the past tense. This is because it is signed on move out day, "on the doorstep" metaphorically speaking. The agreement simply documents an arrangement made between the landlord and the tenant. In the same way as an AST can be presented unsigned for a tenants consideration before move in day, so can the Tenancy Surrender Agreement. Given that it will generally be the landlord who is compromising by writing off rent arrears and/or granting an early release from a fixed term it is in the tenants interest to sign it. It is difficult imagine a real scenario whereby a tenant would subsequently dispute the agreement unless the landlord had intentionally abused it. Obviously there will always be exceptions to the rule if the agreement is used enough times - people can be funny creatures. As you say though, the document would provide useful evidence if a tenant does subsequently raise a dispute. Also, any landlord who can clearly demonstrate that he/she has been more than fair (the purpose of the agreement) will usually impress a Judge or Adjudicator. Again there will be exceptions because Judges and Adjudicators can be funny sometimes too.
.
Hazel de Kloe
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Sign Up21:53 PM, 3rd October 2014, About 10 years ago
Wow...I can see that this thread has caused a heated debate Mark!! Good to see things from different perspectives and opinions and to have a safe place to discuss such matters.
Having downloaded the document for myself, I can see what the fuss is all about!
For what it's worth, in my opinion (and in my experience), a tenant who is happy to sign a mutual agreement to surrender their tenancy amicably must have reached the point of seeing that it was no longer beneficial to remain at the property for whatever reason. By signing the agreement, I can only imagine that it would be extremely unlikely for that/those same tenant/s to dispute the matter and would at the very least act as a prevention of such an act or a good defense for the landlord if the matter were raised in court at any point.
Given the choice of having a tenant 'doing a moonlight flit' and having to go through the motions of gaining possession in the correct way or coming to an amicable arrangement such as this, I know which I'd rather have happen!
melvyn dougie
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Sign Up20:37 PM, 6th July 2016, About 9 years ago
Reply to the comment left by "Rhett Costin" at "27/08/2014 - 13:07":
Hi
Have paid the donation for the file - haf email link but keep receving this message:
Not Found
Apologies, but the page you requested could not be found. Perhaps searching will help.
Tried searching still no download
Have also emailed
Thanks !
Neil Patterson
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Sign Up20:55 PM, 6th July 2016, About 9 years ago
Hi Melvyn,
Sorry about that not sure what happened, but I have emailed it to you as an attachment.
Many thanks 🙂
Mark Alexander - Founder of Property118
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Sign Up20:56 PM, 14th June 2017, About 8 years ago
I have just re-read this entire thread. What a frustrating discussion that must have been at the time!
.
jay shah
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Sign Up11:39 AM, 15th June 2017, About 8 years ago
I have paid and download. But how do I edit it , so I put my tenant name , date. . Please
Mark Alexander - Founder of Property118
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Sign Up11:48 AM, 15th June 2017, About 8 years ago
Reply to the comment left by "jay shah" at "15/06/2017 - 11:39":
Hi Jay
Just copy and paste the text into a new document.
Thanks for your support and your question. The number of downloads today has been incredible:)
.
Jaswinder Rayat
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Sign Up8:19 AM, 15th August 2020, About 4 years ago
Hi Mark
Reading the above conversations has lead me to a query about succession tenancies. Can you shed some light on these please.
Also does a landlord need to determine a 'verbal tenancy agreement' if he moves the same tenant to another of his properties under a new AST. This happened back in 2004. Thanks.
Jess