A tenant is used to having to reinstate the premises at the end of a lease and removing all fixtures and fittings. But does a tenant’s covenant to yield up mean there are other things a tenant actually has to do? The case of John Laing Construction Limited -v- Amber Pass Limited provides useful guidance on what constitutes yielding up. Here the tenant purported to exercise a break clause where "yielding up" was in effect a precondition to the break being effectively exercised. The landlord argued that the premises had not been yielded up because:
- the tenant’s security guards were still present;
- security fencing and concrete structures erected by the tenant outside the premises remained in place;
- keys had not been handed back.
The judge acknowledged that at law there is no prescribed form or procedure for yielding up. The test is really whether a clear intention has been shown by the tenant to terminate the lease and whether the landlord is able to occupy the premises without difficulty or objection. On the facts, the retention of keys, presence of security guards and temporary barriers were not a hindrance to the landlord and it was clear that the tenant was in no way seeking to assert any rights over the premises. Accordingly the break clause had been effectively exercised.
So where does this leave you if you are a landlord or tenant? A landlord should not automatically assume that if a tenant has not given back keys it has failed to yield up premises effectively, especially where there has been a clear intention to end the lease. From a tenant’s point of view (especially when exercising break clauses) it would be advisable to hand back keys to the landlord and make it very clear that the tenant is ending the lease and not attempting to remain in occupation. However as these cases illustrate there is no prescribed form for yielding up and each situation will be assessed on its own merits.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 09/06/2005.