Landlords often face a dilemma if a tenant is facing difficulties in paying their rent. A landlord may want to pursue the tenant for money owing but acceptance of the keys to the premises from the tenant could give rise to a surrender of the lease. This means that the lease is brought to an end and the tenant has no further responsibility for the premises.
A curious situation can arise whereby the tenant tries to hand the keys back but the landlord refuses to accept the keys and sends them back to the tenant. The purpose of this behaviour on the part of the landlord is to try to avoid acceptance of the keys and a potential surrender of the tenancy.
The High Court was presented with this situation recently and took a refreshingly common sense approach to the situation.
The tenant went into administration. The administrators moved out of the premises after two months and wrote to the landlord saying that they would stop paying rent and would have no further responsibility. One month later they returned the keys. The landlord secured the premises and installed an alarm. A year later the landlord marketed the premises and tried to ask the tenant's guarantor to take a lease of the premises. The guarantor argued that the giving up of the keys and the landlord's actions to secure the premises amounted to a surrender.
The Court held that the acceptance of the keys was not sufficient for a surrender to have taken place. The landlord's action of securing the premises was protecting their interests and a landlord was entitled to change the locks without bringing the lease to an end. The landlord had written to the tenant to indicate that the keys were only being accepted to protect the property.
Whilst the Court took a practical approach in this case, if you are a landlord who is offered the keys to your property by your defaulting tenant it is important to ensure that you take advice before you accept the keys to ensure that you are not inadvertently bringing the lease to an end.
To discuss this or any other landlord and tenant related issue, contact us.