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‘Jingle Mail’ – Advice for Landlords on how to deal with a proposed Surrender
In the current difficult financial times and trading environment the issue of Tenant insolvency and
its impact on Landlords is becoming increasingly important. There has been a rising incidence of
Tenants who, because they are unable to afford their rent, are vacating their premises and returning
their keys when there is still time to run under the Lease.
What action can a landlord take when a tenant makes a unilateral decision to vacate a
premises?
Where a Tenant has vacated or returned the keys, a Landlord must be very careful not to do
anything which may give effect to or validate the Tenant’s surrender when there is no intention on
the part of the Landlord to do so.
The effect of surrender is that the Tenant’s estate vests in the Landlord and the term of the Lease is
extinguished. The Landlord cannot therefore seek payment of future rent but only monies due at the
date of surrender.
The Courts will look at whether there has been a surrender by “act and operation of law” (Section 7
Deasy’s Act 1860) For a surrender by operation of law to be effective, each party’s actions must be
unequivocally inconsistent with the continuation of the Lease. To decide on this the Court will look
objectively at the actions of the Landlord as opposed to examining its subjective intention.
A distinction is drawn between equivocal acts which are acts are done for the benefit of the Tenant
and unequivocal acts which are acts of ownership that are inconsistent with the continued existence
of the tenancy. What amounts to equivocal and unequivocal conduct will ultimately be decided by
the Court.
It was held in the case of Artworld Financial Corporation v Safaryan (2009) that accepting back
the keys from a Tenant is not in itself an acceptance of a surrender as one party has to hold the keys.
Revlock Properties Limited v Dixon (1973) illustrates that even changing the locks after the
Tenant has vacated the premises is not sufficient to show that the Lease has ended. However, a
Landlord going into beneficial occupation of a property amounts to an unequivocal acceptance of a
surrender (Bird v Defonvielle 1846) and so this should be avoided if this not the Landlord’s
intention.
When it comes to carrying out repairs, Landlords should be careful only to carry out necessary
repairs that are consistent with the covenant in the Lease and to ensure that the property is returned
to a habitable state. Securing the premises has been adjudged to be in the same category as repairing
and maintaining the premises (Artworld Financial Corporation v Safaryan 2009).
With regard to bringing proceedings to remove trespassers from premises it would seem that
objectively speaking a Landlord would not have standing to bring such proceedings unless the
tenancy is at an end. Landlords should proceed with caution in this regard.
A Landlord re-entering and making arrangements to continue operating a licensed premises would
not appear to constitute an act of surrender. In such circumstances, the actions of the Landlord may
be regarded as, “a reasonable response to the tenant’s evinced intention not to perform the
obligations of the tenancy” (Dyson LG in Artworld).
The case of Bellcourt Limited v Victoria Adesina (2005) indicates that a Landlord may not be
required to act positively in order to protect its position. In this case the Tenant sought to rely on the
Landlord’s failure to seek rent, rent arrears or service charges from her during the period of
vacancy. The court found that there had been no surrender prior to re-letting and questioned
whether “mere inaction” could ever amount to “unequivocal conduct by the Landlord.
To sum up landlords should keep the following in mind:
Equivocal Acts which do not imply surrender include the following
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Attempting to re-let
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Carrying out urgent repairs and maintenance
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Securing the Premises
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Making occasional use of the Premises
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Taking action to dispossess trespassers
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Operating a Licenced premises
Unequivocal Acts which imply surrender include the following
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Removing the Tenant’s name from the premises
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Occupying or using the premises
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Redecorating or improving the premises
The danger of Tenants wishing to vacate their premises and surrender their Leases is not likely to
go away in the short term. This is a symptom of the new economic reality. A Landlord should
therefore seek legal advice before responding to any proposal by its Tenant wishing to surrender its
Lease.
Contributor:- Catherine Fahy
Disclaimer: This document is for information purposes only and does not purport to represent legal
advice. If you have any queries or would like further information relating to any of the above
matters, please refer to the contacts below or check out our website www.jrap.ie
© James Riordan and Partners
December 2012
For further information or advice on this or related topics please contact:•
•
Lucia Fielding (lfielding@jrap.ie ) or
Mairead Ni Laoire (mnilaoire@jrap.ie)
or check our website www.jrap.ie