What happens when both you and your landlord want to end the lease? Even if you are in agreement that the lease should end, there needs to be some formal paperwork to ensure that the legal loose ends are tied up. This paperwork is generally a deed of surrender of lease (surrender of lease). This deed has the effect of ending the relationship between you, as the tenant, and the landlord. This article explains different aspects of the deed, including:

  • when you should use it;
  • the standard clauses it should have; and
  • any issues that you should consider.

What is a Surrender of Lease?

A surrender of lease is a document that both you and the landlord must sign when you have agreed that a lease will end. The surrender of lease sets out the key agreements between the landlord and tenant. It ensures that neither party has any further legal responsibilities surrounding the lease. It can be used in many cases, such as where:

  • you want to exit the lease early;
  • the landlord wants to end the lease early to redevelop the premises, and you agree to leave the premises; or
  • you want to restructure their business and transfer the lease to their new entity, such as transferring from your sole trader to a company.

What Are Key Clauses of a Surrender of Lease?

While the terms of each surrender of lease will be unique, there are some common things you should look out for.


Look out for any preconditions that you must first meet to surrender the lease.

For example, you may have to pay rent and any other conditions in a lump sum. Or, there may be a condition that, if you are changing your operating entity, you enter into a new lease simultaneously.

Make Good

There may be a requirement you ‘make good’ the premises by the date of surrender. This means that you will have to return the premises to the condition that it was provided to you. 

Alternatively, if the landlord is planning to redevelop the property, there may be a release in your favour that confirms that you do not need to make good. This is because the landlord is going to redevelop or demolish the property anyway. 

Security Deposit

Look out for a provision detailing the return of any security deposit. This might include that the landlord returns the bank guarantee that you lodged at the start of the lease as security. If the landlord has made any deductions to your guarantee, ensure that they were justified.

Release of Legal Responsibilities

Mutual indemnity and release clauses ensure that you and the landlord release each other from any legal claims arising out of the lease. This ensures that both the landlord and yourself are no longer legally responsible for the lease after the surrender date. Therefore, you are legally protected from any legal claims that the landlord might bring after the surrender of the lease.

Cost Payments

There may be a provision relating to the payment of costs. This will likely be an agreement between the landlord and yourself on what costs need to be paid. Further, the provision might note that each party must bear their own costs. In some circumstances, it specifies that the party requesting the surrender must pay the other party’s legal costs.

Stamp Duty

If the lease is registered, your surrender of lease form will commonly be liable for stamp duty. Stamp duty is a tax that’s imposed on the purchase of assets and transactions of property. By paying stamp duty, the relevant state land titles office will remove your registered interest on the property from the land’s title.

If you have paid a surrender fee to end a lease early, it is important to obtain your accountant’s advice on tax and other stamp duty issues. This will impact upon the way the payments are dealt with and any stamp duty that you must pay on the deed of surrender. 

Key Takeaways

When considering a surrender of lease, it is necessary that you and your landlord understand the specific clauses of the deed. You should ensure that the conditions within the clauses are:

  • reasonable;
  • clear; and
  • don’t place an unrealistic burden on you.

It is also important to note what costs you will be responsible for paying and any lease registration fees or stamp duty. If you have any questions about your rights and obligations under a surrender of lease, contact LegalVision’s leasing lawyers on 1300 544 755 or fill out the form on this page.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Emma Heuston
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy