Mutual Termination of AST Agreement

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  • bgcm12
    replied
    Well wrapped-up! Thank you!

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  • Lawcruncher
    replied
    The law provides a sure fire way of surrendering a tenancy: a deed. If a deed of surrender is executed then the tenancy comes to an end. (For the record it should be noted that: (a) if a residential tenancy is surrendered by deed and the tenant remains in occupation a court order is required to get possession and (b) if the tenant stays and the landlord demands or accepts rent for a period after the surrender a new tenancy may arise.)

    However the law recognises that situations arise where the parties act in such a way that it would be unreasonable for either of them to rely on the need for a deed. An example: a tenant says to his landlord that he wants to leave. The landlord agrees he can leave early without giving notice. They meet at the property. The tenant hands over the keys and leaves with his belongings to take up residence elsewhere. The landlord has a tenant lined up who moves in. The tenant cannot return saying he wants to move back in because because he does not like his new property. If the new tenant fails to pay the rent the landlord cannot insist that there was no surrender because reletting is inconsistent with the old tenancy continuing. In practice not all cases will be that straightforward.

    An agreement for surrender is an executory contract, that is one which imposes obligations to be complied with at a later date. The essential obligations are that the tenant will surrender the tenancy and that the landlord will accept the surrender. If a party fails to comply with its obligations the other party can sue for breach of contract.

    If the landlord and tenant have a clear agreement that a tenancy is to be surrendered and there are no complications, then the counsel of perfection is to proceed as outlined in the thread mentioned above by Westminster. If you rely on an oral agreement, an exchange of letters, a hastily written agreement or arguing there will be a surrender by operation of law it can all come unravelled.

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  • bgcm12
    replied
    Wow, some very technical details of law there and seemingly some difference of opinion.

    Without wishing to go around in circles, is there any consensus as to the situation?

    With an agreement for surrender in place, should the T have to move out, and if she doesn't is it enforceable through the courts?

    (I will be taking a Deed of surrender with me on moving-out day and asking T to sign it).

    Thanks all.

    Leave a comment:


  • Lawcruncher
    replied
    Originally posted by bhaal View Post
    Why does this need to be a deed at all? I can't see there's any failure of consideration since both parties receive something of legal value. Is it because a surrender of a tenancy is not covered by the exception to the general rule in the Law of Property Act that dispositions of land need to be made by deed? If so the letter should operate as a contract to surrender an interest in land and will be enforceable against the tenant (ie you can get a court order making him sign a deed if he refuses to).
    First, it is necessary to distinguish between an agreement for surrender and an actual surrender - they are equivalent to "contract and conveyance" when there is a sale.

    An agreement to surrender must comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. An agreement to surrender cannot be made orally. A written agreement must, like any other contract, be supported by consideration. The section is drawn up so that it is difficult, if not impossible, to create a contract for the disposal of an interest in land by letter.

    As to how a surrender is effected, the starting point is section 52(1) of the Law of Property Act which says:

    All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed.

    However, section 52(2) provides:

    This section does not apply to—
    [...]
    (c)surrenders by operation of law, including surrenders which may, by law, be effected without writing;
    [...]


    A valid agrement to surrender does not effect a surrender. Ideally it should be perfected by a deed which will put the matter beyond doubt. If either party refuses to complete the agreement the other may apply for a decree of specific performance.

    If there is an agreement to surrender (whether valid or not) and the parties proceed as if there were an actual surrender such that it would be inequitable for either party to seek to rely on the requirement for a deed, then there will be a surrender by operation of law.

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  • bhaal
    replied
    Why does this need to be a deed at all? I can't see there's any failure of consideration since both parties receive something of legal value. Is it because a surrender of a tenancy is not covered by the exception to the general rule in the Law of Property Act that dispositions of land need to be made by deed? If so the letter should operate as a contract to surrender an interest in land and will be enforceable against the tenant (ie you can get a court order making him sign a deed if he refuses to).

    Leave a comment:


  • Snorkerz
    replied
    Originally posted by westminster View Post
    The rent is payable for as long as the tenancy is in place. If the T doesn't move out, the tenancy won't end before fixed term expiry.
    Westminster - if this had happened in a SPT then it would have been treated as 'notice' and the notice would have brought the tenancy to an end. As it is in a fixed term, would the tenants surrender not have the same effect?

    In which case an n5/n119 eviction could be effected without notice.

    Leave a comment:


  • westminster
    replied
    Originally posted by bgcm12 View Post
    I see, thanks for that info. Just out of curiosity then, does the "termination agreement" mean as little for the T? If I tell her "actually, I've changed my mind" is she then obliged to pay rent as per the AST until the end of the AST contract?
    The rent is payable for as long as the tenancy is in place. If the T doesn't move out, the tenancy won't end before fixed term expiry.

    Leave a comment:


  • theartfullodger
    replied
    Originally posted by PETER1000 View Post
    Sorry to trouble you, but how do you add a new post to this forum?

    Hope you can help

    Regards Peter
    What, about Finedon Hall???

    Click on "Residential Letting Questions" and there's a "Post New Thread" option to click on...

    Welcome!!

    Leave a comment:


  • PETER1000
    replied
    Sorry to trouble you, but how do you add a new post to this forum?

    Hope you can help

    Regards Peter

    Leave a comment:


  • mariner
    replied
    As you have signed a letter agreeing to termination, albeit not a Deed, I think the T can assume you have accepted her offer of surrender and cannot change your mind. The T DID make an offer to surrender first?

    Leave a comment:


  • bgcm12
    replied
    Originally posted by westminster View Post
    In order to effect an early surrender, the T must first voluntarily vacate, then you and T must sign a Deed of Surrender. It must state that it's a Deed and be executed as a Deed (i.e. witnessed by a third party). Here's a template by one of our legally qualified members:
    http://www.landlordzone.co.uk/forums...236#post209236


    No, you cannot change the locks on 29th Jan if the T is still in occupation; whatever you and she have signed, you need a court order to evict T.
    I see, thanks for that info. Just out of curiosity then, does the "termination agreement" mean as little for the T? If I tell her "actually, I've changed my mind" is she then obliged to pay rent as per the AST until the end of the AST contract?

    Leave a comment:


  • westminster
    replied
    Originally posted by bgcm12 View Post
    Now that this letter (I produced it based on a template from the internet) has been signed by both parties and we both hold a copy, is it a legally binding document?
    In order to effect an early surrender, the T must first voluntarily vacate, then you and T must sign a Deed of Surrender. It must state that it's a Deed and be executed as a Deed (i.e. witnessed by a third party). Here's a template by one of our legally qualified members:
    http://www.landlordzone.co.uk/forums...236#post209236

    After the date stated, does the T have any legal right to the property? Can I for example, change the locks on 29/01/2012?
    No, you cannot change the locks on 29th Jan if the T is still in occupation; whatever you and she have signed, you need a court order to evict T.

    Leave a comment:


  • JK0
    replied
    I think you still have to go through the rigmarole of giving 2 months notice via section 21, (or section 8 if he gets in two months rent arrears.)

    If you sued tenant in court for not moving out, I expect the judge would tell you the same thing.

    Leave a comment:


  • bgcm12
    replied
    Originally posted by JK0 View Post
    I think you would still be in trouble if tenant came home and couldn't get in, and went to the council for re-housing.

    Best to wait and see if T does move out, and gives you your key back.
    Ok, fair enough - but is the termination of contract agreement binding. If the T decides not to move out afterall, what can I do as a LL to enforce the surrender of posession?

    Thanks again.

    Leave a comment:


  • JK0
    replied
    I think you would still be in trouble if tenant came home and couldn't get in, and went to the council for re-housing.

    Best to wait and see if T does move out, and gives you your key back.

    Leave a comment:

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