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Does doing a checkout mean a tenancy has ended?

housesHere is a question to the blog clinic from Andrew (not his real name) who is a landlord

I rented my flat out on a 12 month lease but 3 months into the tenancy my tenant lost his job and moved out. I advised him he was responsible for rent up until a new tenant was found.

He agreed to this and I was delighted when my agent found a new tenant within two weeks. However, the application fell through at the last minute, and it was another month before another tenant moved in.

I (the agent on my behalf) informed the tenant he was still responsible for rent during this period and that the arrears would be deducted from his deposit, but he refused, arguing that it was not his fault the application fell through.

The tenant took the case to tribunal who awarded in his favour because my agent carried out a checkout, which constituted an acknowledgement that the tenancy had ended. I am obviously disappointed by the decision, but is it correct?

I will probably just take this on the chin, but I am sure other landlords will face the same problem and I don’t want them to be stung the way I have. This has cost me a small fortune in agent fees.

I don’t think it is laid down in tablets of stone that doing a checkout inevitably means that a landlord agrees that a tenant has ended.  It will really depend on the circumstances and what the parties said and did.

I think what a landlord should do in similar circumstances is do a letter to the tenant saying that you are carrying out the checkout in the hope that the new tenancy goes through but that this should not constitute an acknowledgment that the tenancy has ended and that you will continue to hold him liable until such time as the tenancy agreement is signed.

If you are able to produce a letter like this to the adjudicator then this should conter the assumption he might otherwise make that holding the checkout meeting indicates that you accept the tenancy is at an end.

In fact it might be an idea to re-iterate the fact that the tenant will be held liable until a new tenancy agreement is actually signed every time you write to him.

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8 Responses to Does doing a checkout mean a tenancy has ended?

  1. Presumebly the tenant attended the checkout?

    If so, then I agree that your proposed letter would be useful, even moreso if you could get the tenant to sign it.

    Clearly the tenant would need an incentive to do so, therefore, the letter might include words along the lines of …..

    “we have agreed to release you from your contract as soon as a new tenant takes possession, in the meantime you have surrendered your keys to the property and the attached checkout has been completed on the strict understanding that you will continue to pay your contractually due rent until a new tenant takes possession. Subject to your rent payments being kept up to date a refund of your deposit has been agreed at £XXX and will be refunded within three days of the next tenant taking possession.”

    There may need to be something in there stating that the tenant has relinquished right of posession but over to Tessa for that as I’m no lawyer.

  2. I am not happy with the words ‘relinquishing right of possession’ as this may imply that the tenancy has ended.

    However if the tenant confirms that the landlord can have access, for example for showing round prospective new tenants, that should be OK.

  3. I think Tessa’s response to the article is nearest the mark, and for sure if any Court sees words indicating a tenant has relinquished possession, or more correctly that the Landlord has accepted it, then that will be game over.

    The whole key here is the letter to the tenant accepting the surrender of the property in terms of security and re-letting to a new tenant (espoecially if any works are needed) but at the same time making it clear that the tenant remains liable for all financial related costs, rent and C Tax etc.

    However I would not use the S word unless I was actually accepting surrender and releasing the ex tenant from any such liabilities. Instead would just refer to the Landlord having accepted the keys and return of the property for future re-letting purposes.

    But it needs to be a very carefully worded letter and signed by the tenant to avoid running up against implied or even actual surrender being deemed to have taken place.

    I am also uneasy about the wording Mark proposes in relation to the deposit return. I’m not so sure you can hold onto the deposit just in case the tenant does not meet an ongoing commitment. What happens if it takes months to re-let bbecause the Landlord is over ambitious in the rent he is seeking, or the quality of the tenants etc?

    But then the other big danger is that the deposit can only be dealt with after the tenancy has ended so you end up in a chicken and egg/Catch 22 situation. The minute the deposit is dealt with you are accepting that the tenancy has ended – because it cannot be distributed in any way until the tenancy has ended.

  4. @IndustryObserver – I was never comfortable with the wording I had used, hence my request for Tessa to draft something. It was more the principles which I wished to debate, not to suggest a template for such an important letter. To summarise, I totally concur with your points.

  5. I’d like to offer this

    “Any further act of the landlord referable to the landlord’s seeking to re-let the premises will not necessarily give rise to a surrender by operation of law, as it is no more than what the landlord might reasonably be expected to do in the circumstance for the potential benefit of all parties: Oastler v Henderson (above). The landlord must be entitled to seek to mitigate the damage caused in reality (even if not yet technically in law so long as the lease remains extant) by the tenant’s abandoning the lease, by seeking to obtain another tenant, without thereby losing his rights against the original tenant if he is unable to do so.”

    Which seems to suggest that the tribunal were wrong in their decision.

    Artworld Financial Corporation v Safaryan & Ors

  6. Is the definition of a surrender worth considering? If the tenant has removed all his possessions, stopped paying rent AND handed back the keys then and only then has the tenancy been surrendered. If the landlord allows all these 3 to happen then the tenancy has been surrendered otherwise it still exists? If the landlord accepts the early surrender of the tenancy without having signed a contract with the new tenant then he must accept the inherent risk of being contract less

  7. A landlord can’t be forced to accept a surrender during the fixed term if he does not want to.

    But if he does not make it sufficiently clear that he is NOT accepting a surrender he may be deemed to have done so, for example if he changes the locks and starts to re-market the property.

    It all depends on the circumstances and what is said and done at the time.



About the post author:

Tessa Shepperson

Tessa is a lawyer and specialises in creating products and services which help landlords and letting agents learn and understand landlord & tenant law. For example, she runs the Landlord Law website (now in its 14th year) and is a director of Easy Law Training Ltd and Your Law Store. Tessa also sits on the Property Redress Scheme Council. When not working she enjoys reading, cooking and messing around on the computer. You can also find her on Google

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Tessa is an English lawyer specialising in residential landlord and tenant law.

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