Surrender of premises: Overview, definition, and example
What is surrender of premises?
Surrender of premises refers to the process by which a tenant voluntarily returns possession of a leased property to the landlord at the end of the lease term or earlier if both parties agree. This involves vacating the property and restoring it to the condition specified in the lease agreement, often requiring the tenant to remove personal property, repair any damages, and return the keys.
For example, a tenant leasing an office space may be required to surrender the premises by removing all equipment and restoring the space to its original condition before the lease expires.
Why is surrender of premises important?
Surrender of premises is important because it provides a clear framework for ending the landlord-tenant relationship and ensures that the property is returned in an agreed-upon condition. For SMBs, this clause protects both landlords and tenants by defining obligations, reducing disputes, and ensuring a smooth transition of the property.
By including a surrender of premises clause in lease agreements, landlords can avoid unnecessary costs for repairs or legal disputes, and tenants can ensure clarity about their responsibilities upon vacating the property.
Understanding surrender of premises through an example
Imagine an SMB leases a retail storefront. The lease agreement includes a surrender of premises clause stating that the tenant must remove all signage, repair any damage caused during occupancy, and return the keys by the last day of the lease. Failure to meet these obligations may result in deductions from the tenant’s security deposit.
In another scenario, a company leasing office space decides to terminate the lease early. The landlord and tenant agree to a negotiated surrender of premises, where the tenant vacates the property, removes all office equipment, and pays a fee for early termination. The property is then returned to the landlord for re-leasing.
An example of a surrender of premises clause
Here’s how a surrender of premises clause might appear in a lease agreement:
“Upon the expiration or earlier termination of this Lease, the Tenant shall vacate the Premises, remove all personal property, and surrender the Premises in the condition required under this Agreement, reasonable wear and tear excepted. The Tenant shall repair any damage caused by the removal of fixtures or equipment. Keys and access devices must be returned to the Landlord on or before the final day of occupancy. Failure to comply with these terms may result in additional charges or deductions from the security deposit.”
Conclusion
Surrender of premises clauses establish clear expectations for tenants and landlords at the end of a lease, reducing the likelihood of disputes and ensuring a smooth property transition. For SMBs, understanding and adhering to surrender obligations protects against financial penalties and fosters positive relationships with landlords. A well-drafted surrender of premises clause ensures transparency, accountability, and compliance with the terms of the lease.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.