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ARTICLE · 02 APRIL 2013

Please Release Me

Fieldfisher
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The recent case of Baroque Investments Limited v Richard Heis, Samantha Rae Bewick (as Joint Liquidators of Teathers Limited) has highlighted a little-known risk for a landlord of accepting a surrender during the course of a lease.

United KingdomReal Estate and Construction
Tom Ward
Tom Ward

First appeared in Informer: Real Estate Newsletter - Spring 2013

The recent case of Baroque Investments Limited v Richard Heis, Samantha Rae Bewick (as Joint Liquidators of Teathers Limited) has highlighted a little-known risk for a landlord of accepting a surrender during the course of a lease.

The landlord accepted an early surrender from an insolvent tenant in 2009, fully expecting to be able to recover for outstanding repairs and for the costs of reinstatement of the tenant's alterations.  The agreement to surrender released each party from all liability for breaches committed after the surrender, but there was no release for breaches committed beforehand. 

If the landlord had been asked, he would have said that he understood the surrender date to operate as the equivalent of the expiry of the lease so far as yielding up and reinstatement were concerned.

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