What is a Surrender Clause?
Tenants and landlords are bound by contracts called leases. The lease is an essential part of any tenancy. Both parties are required to fulfill the terms of the lease. Many people wonder, what is a surrender clause? When tenants leave the premises after the lease expires, they are required to leave it in the same condition as when they leased it. Both parties need to carefully review leases before they sign them to make sure they understand their obligations.
Review Leases for Surrender Clauses
Most commercial leases include surrender clauses. The landlord may allow you to make improvements and modifications that are needed to run your business. However, you are required to return the premises to their original condition. For example, if you built a wall to change the configuration of the space, you must properly remove the wall at the end of your lease.
Several Types of Surrender Clauses
There are several types of surrender clauses which may be included in a lease. One clause typically requires tenants to leave the premises in good condition. Generally, this means that the systems must be operating properly, and is ready for a new tenant. Another clause may state that the premises be left in broom clean condition. This means the place must simply be clean and trash must be removed. Another type of clause states that the unit is returned to the original condition.
Tenants Need to Follow the Lease
Tenants must consider several costs before they sign a lease. Expenses include the costs of moving into the space as well as making any necessary changes. They must also remember to budget for the expenses involved in returning the premises to their original condition, according to the surrender clause. These costs can be extremely high, especially if major renovations were completed.
Negotiating Surrender Clauses in Leases
Tenants and landlords should come to a satisfactory understanding of exactly how the premises are to be left when the tenant moves out. As a tenant, you may be able to negotiate with the landlord, as long as it is done before the lease is signed. For instance, if an improvement will improve the premises, and the landlord approves in writing, the tenant is allowed to leave the installation when surrendering the premises.
Tenants and landlords may need legal help when negotiating and enforcing leases. Contact the experienced legal team at Udall Shumway PLC for a free consultation.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Surrender Clause, or any other litigation matter, please feel free to contact us at 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.