Navigating Lease Surrenders

Corporate occupiers wanting to exit their premises midway through the lease term, have various options available to them: breaking the lease, assigning or subletting, or surrendering. In this article we explore lease surrenders and the issues surrounding them.

Why surrender?

Unlike an assignment or subletting, a surrender typically brings the tenant's liability to an end, as the lease no longer subsists. Surrenders can be entered into at any time (unlike break rights which are often fixed to a specific break date or dates) and so can be a useful way for a tenant to move on.

Bargaining Stength

The first thing to consider when contemplating approaching a landlord to ask for a surrender is the hand the tenant has to play; the strength of its bargaining position. There are numerous permutations to factor into this assessment, including external market forces - which a good property agent will be able to advise on - but the main ones are: