Terminating a lease purchase agreement

Terminating a lease means ending a lease before its termination date. The termination process of a lease agreement depends on various conditions, including the type of agreement and whether both parties agree.

How to terminate a lease agreement

How to terminate a lease agreement

If a tenant wants to terminate a lease without a termination provision, they should be aware that the court only allows termination if conditions are so severe that continued tenancy is untenable.

Some effective conditions to terminate a lease:

  1. When both parties agree
  2. Fixed and periodic agreements
  3. Ending a periodic tenancy agreement
  4. Ending a tenancy agreement early
  5. What if the tenants refuse to leave?

Terminating a Lease Purchase Agreement Template

When both parties agree

When both parties agree the possibility of terminating the agreement increases. Such termination is referred to as “surrender”.

There are two ways through which surrender of a tenancy can occur:

  1. Operation of the law
  2. Declaration of Surrender

To end an agreement legally from both parties, it becomes mandatory that both parties should agree. It is always advised to put the agreement in writing so that everyone knows where they stand. For the condition of joint tenancy, all the joint tenants and the owner must accept the surrender.

In case the tenant has legally surrendered the occupancy, then the owner holds the right of ownership of the property under Section 5 of the Housing Act 1988.

In such cases, where the landlord takes ownership of the property even when the tenant has not properly ended the agreement and both parties have not accepted the terms, the landlord could be accused of unlawful eviction.

Surrender by Operation of the Law

This process consists of tenants giving their occupancy of the property to the landlord. The landlord accepts this. This may include the tenant handing over the property’s keys to the owner. With taking over the keys, the landlord accepts that the agreement is over.

Declaration of Surrender

This type of surrender consists of the tenant signing a paper that states “Declaration of Surrender”. This written document is proof of agreement. Eventually, the details clarify the query i.e., has the tenant actually surrendered the property or not?

Fixed and periodic agreements

A fixed-term agreement is designed for a fixed period of time agreed in the rental agreement (generally six months or one year). The occupancy could be fixed even if rent is paid each week or month.

A periodic agreement moves from week to week or month to month. These comprise tenancies that were basically for a predetermined term that have discontinued and no new fixed term agreement has been stated.

Free Assured Shorthold Tenancy Agreement

Ending a fixed-term tenancy agreement

Many fixed-term agreements consist of a ‘break clause’, which allows the tenant to end the agreement before the set term expires. It becomes mandatory for the owners to be aware of the results of including such a clause. If the agreement doesn’t comprise such a clause then, a tenant cannot discontinue the tenancy early without the landlord’s stated agreement.

If the tenant leaves the property in any way they are still bound to be liable to pay rent till the end of the period. In case the agreement includes a break clause, the tenant is allowed to leave early with the condition that they follow the procedure as stated in the clause, for instance, the amount of notice they must serve.

If the agreement is for a fixed term, a tenant holds the right to leave on the last day of the fixed term without issuing any such notice. If they stay even one day over the fixed term, they will automatically be considered a periodic tenant and will have to provide proper notice unless the landlord agrees to them leaving.

An owner has the right to end a tenancy at the end of the fixed term (usually 6 months) provided that the tenant has been provided two months’ written notice.

A landlord may possibly end a fixed tenancy early if certain conditions are fulfilled.

Ending a periodic tenancy agreement

In case the stated agreement is periodic (moving from week to week or month to month), a tenant is required to submit at least four weeks’ notice to discontinue the agreement or a calendar month in case it is a monthly tenancy. The notice must be in written form and must end on the first or last day of the tenancy unless the tenancy agreement allows it to expire on a different day.

For the cases when the rent is paid less frequently a tenant is required to submit at least one rental period of notice. Suppose if the rent is to be paid every three months then it becomes mandatory to submit the three months’ notice.

A tenant can choose to end a periodic tenancy by stating a valid notice to quit to the owner. Once the notice expires, the tenant’s agreement is also considered expired.

Ending a tenancy agreement early

A landlord can only discontinue a tenancy before the fixed stated term is over if the tenant has violated the tenancy agreement. If such a situation occurs, the owner must appeal to the court for ownership.

Before making an appeal for possession, an owner will be required to serve a section 8 notice to quit on the tenure as this will become an important part of the evidence that the court will ask before granting the ownership order.

The notice period required to be delivered to the tenant will depend on the grounds under which ownership is sought.

What if the tenants refuse to leave?

If the tenants refuse to vacate at the completion of a fixed-term tenancy then the landlord will need to make an application to a court for possession. Before applying to the court for ownership a landlord is required to serve a section 21 notice to quit on the tenants giving them at least two months’ notice.

Terminating a Lease Purchase Agreement Template