How to end a tenancy by mutual agreement

Express surrender of tenancy in plain English

Whenever you wish to end a tenancy, there are several ways in which you may do so. Which you choose depends on the circumstance. For example, you may give the tenant notice to quit, or you may choose to evict your tenant. Whichever of these two options is deemed most suitable and necessary, you must adhere to landlord laws and the rules of contract.

In this article, you’ll learn about a third way to end a tenancy: by mutual agreement, which is kind of like a no-blame divorce.

What is a mutual agreement?

If you give your tenant notice to quit, or you begin eviction proceedings, the decision is one-sided. Thus, you must be careful to follow the law to the letter. A mistake can be costly. The mutual agreement offers an alternative to what could be an acrimonious parting of the ways. You don’t have to follow the mechanism as stipulated in law and in the tenancy agreement, because you agree new terms (an end to the tenancy agreement) between you.

Why might you wish to end a tenancy agreement by mutual consent?

Most tenancies end by mutual agreement, and there are many reasons why either you or the tenant may wish to end a tenancy in such a way. For example:

  • The tenant’s circumstances may have changed, and they may wish to move before the end of the fixed term. Such change in circumstances may include separation, a change of jobs, or a change in financial circumstances. Clearly, to force the tenant to stay is likely to be detrimental to both parties.
  • You may need to sell the property before the end of the fixed term, for reasons you had not anticipated. A business partnership may be dissolving. You may have run into a financial brick wall. It doesn’t matter what the reason, you need to sell.
  • Most commonly, the tenancy has rolled over into a periodic tenancy, but either party would rather not end the tenancy on the last day of a rental period.

In such circumstances, the best course of action is to end the tenancy by mutual agreement.

How do you end a tenancy by mutual agreement?

If the tenant is still living in the property and you wish to end the tenancy by mutual agreement, you should do so by what is called an ‘express surrender’. This simply means that you put in writing the agreement to end the tenancy, and both sign it.

We always recommend that tenancies are ended this way (unless by notice or eviction) as it removes any possibility of the tenant claiming illegal eviction at a later time. The aim is to ensure that the ending of the tenancy is agreed unequivocally and that actions prove the tenancy has ended.

What must you include in an express surrender of tenancy?

You must make clear the circumstances under which you are taking possession of the property. This should be detailed in the written express surrender of tenancy, with the following details included:

  • The names of the tenants, the landlord, and the property manager (if applicable)
  • The property’s address
  • The date that the tenancy agreement will end
  • The terms under which the tenancy agreement will end
  • Any outstanding payments due from the tenants (e.g. rent, cost of damage to property, any costs to be covered, etc.)
  • Any obligations that remain, or confirmation that obligations will be discharged in full upon signature
  • Signatures of all parties
  • Date of signing
  • The conditions under which the surrender becomes binding (e.g. upon signature by all parties)

Such an agreement may be made by deed, a legal document signed in the presence of witnesses.

Should the surrender of tenancy have to be written as a deed?

By writing the express surrender as a deed is often advisable, but it is not a legal requirement. In practice, a written express surrender with signatures of all parties indicates the agreement of all to the terms as they are written. This makes it much harder for it to be challenged as an illegal eviction, especially if you make it plain that the tenants can seek legal advice before signing.

In summary

If you wish to end a tenancy early for reasons other than eviction, it is best to do so by mutual agreement. However, while this removes the need to adhere to the conditions of the tenancy agreement, it must be done legally. Putting the terms of the mutual agreement to end the tenancy into writing, by way of an express surrender, removes all ambiguity and should ensure that there is no challenge to legality by a malicious tenant at a later date.

In my next article, I’ll examine how to use an implied surrender to gain possession of your property when it has been abandoned by your tenants.

In the meantime, to discover the benefits of effortless property management, contact Ezytrac today on +44 0 1522 503 717.

Live with passion,

Brett Alegre-Wood

By | 2018-10-15T02:51:39+00:00 October 22nd, 2018|Landlord lessons, Property Management, Tenant Management|0 Comments

About the Author:

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Ezytrac. His companies have sold over £850 million in UK and London property and he manages over 1200 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids. Brett holds both the Level 3 Property Mark Qualifications for Property Sales and Property Lettings and Management.