In Artworld Financial Corporation v Safaryan, the tenant took a three year lease of a large villa in West London. The tenant was unhappy with various aspects of the property and vacated after about 18 months. The keys were returned to the landlord. The landlord commenced proceedings claiming the rent for the rest of the term.

The tenant initially argued that the lease had been repudiated as a result of the landlord's failure to carry out certain repairs. However, by the time the case reached the Court of Appeal the tenant relied on the contention that the lease had come to an end by surrender by operation of law.

A surrender by operation of law does not depend on the intention of the parties, and is founded in estoppel. The parties must have acted towards each other in a way which is inconsistent with the continuation of the tenancy. The burden of proof lies on the party claiming that there has been a surrender.

The following acts by the landlord were held, on their own, to be equivocal:

  • Accepting the keys
  • Making a "check-out" report and inventory
  • Entering the premises to inspect them
  • Carrying out necessary repairs
  • Keeping the garden tidy
  • Redecoration
  • Parking the landlord's cars on the drive
  • Return of some furniture which had been put into storage prior to the grant of the lease because the tenant did not want it
  • Rehanging of curtains which at been removed at the tenant's request
  • Seeking to re-let the property.

However, the court must look at the cumulative effect of the acts relied on. Taken together they may amount to a resumption of possession by the landlord, even though viewed in isolation each might be capable of explanation.

In this case, the landlord's son had moved into the property for several months. The court found that this was not as a caretaker to ensure that the property was safe, but was for his own benefit.

The fact that the landlord had, through correspondence from his solicitors, asserted the continued existence of the lease did not affect this conclusion since the question had to be determined by looking at the landlord's conduct as a whole. Going in and living in the property amounted to taking it over and treating it as the landlord's own, which was inconsistent with the continuance of the lease.

Things to consider

In the current climate, many tenants may be examining their portfolio carefully and vacating space which is surplus to operational requirements. In these circumstances, landlords will naturally want to check that the property has been left secure and inspect its condition. While the landlord is entitled to do things which are consistent with its rights under the lease, specialist advice should be sought to avoid taking any actions which might constitute an acceptance of a surrender of the lease.