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If you have decided to end your lease early and part ways with your landlord before the end date stipulated in your rental agreement, then you will likely require a Lease Surrender Agreement.
What Exactly Is It?
A Lease Surrender Agreement is required when both the tenant and landlord agree to conclude the lease before its original expiry date. This document outlines any modifications to the original lease terms, ensuring every important detail is documented and everyone’s rights and obligations are clearly set out.
A Lease Surrender Agreement typically includes:
- Key dates including the new termination date
- Early termination payments
- Rent obligations up to the surrender date
- Make good clauses to restore the property where necessary
- Mutual release provisions
Why Do I Need A Lease Surrender Agreement?
You may be wondering, “If we both agree to terminate the lease, why do we need an additional agreement?” Even when both parties consent, having a formal, written agreement is essential because contractual relationships can be complex and open to interpretation.
While your original lease details the initial end date, any change to those terms should be captured in a separate, updated document. This ensures that all new arrangements are legally binding and that both parties have a clear understanding of the revised terms.
A Lease Surrender Agreement will incorporate any new information that was not mentioned in the original contract, effectively tying up loose ends to ensure a smooth transition for both the tenant and the landlord.
| Example Chris has been renting a fifth-floor office space for his firm for three years. Although his contract originally runs for another two years, he has been offered a prime new location in the CBD that would be far more accessible for his clients. Chris discusses the possibility of ending his current lease early with his landlord, Jennifer. While Jennifer is interested in accepting a competitive offer for her space, she is initially hesitant to break an existing agreement. After a detailed conversation, they both agree to an early termination. Jennifer advises Chris that even though they are in full agreement, it’s still wise to have all the new terms documented. Her lawyer drafts a Lease Surrender Agreement which clearly specifies final payments, the handling of bond money, and the new termination date. Once both parties iron out the details to their satisfaction, they sign the agreement, ensuring clarity and reducing the risk of future disputes. |
As we move into 2025, commercial leasing practices have evolved significantly. Recent amendments to state leasing legislation and shifting market trends have influenced how early lease terminations are managed. It is vital that your Lease Surrender Agreement reflects these updates – from revised bond payment procedures to new early termination fee structures. For a deeper insight into the elements that make a contract legally binding in today’s regulatory environment, we recommend checking out our guide on what makes a contract legally binding. Additionally, our contract review and redraft services can help ensure that your agreement is both robust and compliant with 2025 standards.
At Sprintlaw, we can draft a Lease Surrender Agreement for your business.
Our Lease Agreement package includes:
- Drafting a Lease Surrender Agreement tailored to the specific requirements of your business
- Up to 60 minutes of phone consultation with a Sprintlaw lawyer who will take your instructions, advise you on any relevant legal issues, and answer your questions about the document
- One complimentary amendment to the final draft, provided it is requested within 10 business days of delivery
Please note that this package does not include:
- Direct negotiations or correspondence with the counterparty or their lawyers, or the review of any responses from the counterparty or their representatives to the proposed changes. Should you require further negotiation support or additional rounds of review, a new quote will be provided.
- Advice on any employment, taxation, accounting, or other compliance issues
Need Help With Your Lease?
Thinking of ending a lease early? We can help make that transition a little easier!
If you would like a consultation on your options going forward, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
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