How landlord can avoid the surrender of a commercial lease by inadvertent action

The Covid-19 pandemic and Government restrictions have caused hardship to commercial landlords and commercial tenants. Unsurprisingly, some tenants will want to break free from their leases and their landlords won’t want to release the tenants from their obligations.

Landlords will need to be careful to avoid inadvertently accepting a surrender by their tenants, such as:

• The tenant vacates the property and the landlord re-enters.
• The tenant returns the keys, and the landlord does not communicate to the tenant that this doesn’t amount to a surrender or acceptance of surrender.
• The tenant serves notice under a break clause and the landlord fails to examine the lease to determine whether the validity of the break notice can be challenged, either because the notice is not in the strict form required by the lease, or at the time of the break date the conditions for ending the lease were not satisfied by the tenant.
• The landlord or their authorised surveyor enters the property to prepare a schedule of dilapidations without the express agreement of the tenant.

However, dilapidations can be a useful tool for the landlord. For example, a break clause operated by the tenant may be conditional not only on payment of rent up to the break date, but also on compliance with all lease covenants. A schedule of dilapidations may serve to highlight areas in which the tenant has failed to comply with their lease covenants.

If any of the above situations apply to you, it is important to get legal advice as soon as possible.