DEFINITION of Deed of Surrender
A deed of surrender is a legal document that transfers property ownership for a given time period provided certain conditions are met. A deed of surrender lets one party, such as a renter, relinquish his or her claims on a particular piece of property to a landlord or other party that holds the underlying title. Once the deed of surrender has been signed, any outstanding claims on the property can be resolved.
BREAKING DOWN Deed of Surrender
A deed of surrender can be used to terminate any commercial property lease and/or relieve tenants of their lease obligations. The document may be used in cases where the tenant restructures their business and wants to enter into a lease under the name of the new business entity. In exchange for giving up their rights to a property, the tenant is released from further claims and demands by the landlord. The landlord is likewise released from further claims and demands by the tenant. The deed of surrender outlines each party’s rights.
How a Deed of Surrender Is Applied by Tenants and Landlords
Deeds of surrender are used in situations where landlords and tenants have mutually fulfilled their fiduciary duties and obligations. If either party breached the lease contract, ending the legal relationship becomes more complicated. For example, if a tenant owes several months’ back rent, the landlord might not execute a deed of surrender. Doing so would surrender their rights to collect back rent.
A deed of surrender often states the condition that the tenant must leave the property in. This can include specifying the cleanliness of the property and whether or not appliances should be removed by the tenant. The final date of occupancy and deadline to vacate the premises may also be listed. For example, when a retailer moves out of leased space, the deed of surrender may state that all signage, racks and other equipment the retailer owns must be removed from the property. The deed might stipulate that infrastructure and amenities owned by the landlord, such as light fixtures or an air conditioning system, must remain in place. The deed of surrender would also declare when the tenant must have completed any clean up needed after the removal of their belongings.
The document also affirms the tenant fulfilled any financial obligations to the landlord, states the landlord returned the tenant’s deposit or a portion thereof, or that the tenant is not due a refund of deposit at all. The deed of surrender is signed by the landlord, the tenant and a witness such as a notary public.