Yielding Up

Let’s understand why the term ‘yielding up’ has so much importance when entering into a lease. At the end of the Lease term when the tenant leaves the premises, he is bound to remove all his belongings, fittings and fixtures, equipment related to the trade and hand over the premises in the same condition in which it was handed over to him. The Tenant should replace landlord’s fittings and fixtures which are damaged during his term of occupancy.

This clause is not unreasonable from a landlord’s point of view as incoming tenants will have their own fittings and fixtures which are suitable for their trade. If the leased premises are left in such a poor state that repairs are required, the landlord may lose rent or he may have to carry out the repairs at his own cost. To protect the interest, it is suggested to incorporate the ‘yield up’ clause in the lease. This covenant to reinstate is a positive covenant not a negative covenant.

The ‘yielding up’ clause in the leases will be binding on the tenant that they have to yield up the property only at the end of the term. Also, the tenant must comply with the repair covenants in expressed in the lease. This is an important clause to be incorporated in the lease to reiterate the requirements and conditions on the tenant to make sure that the leased premises are handed back to the Landlord with vacant possession, decorated, reinstated and cleansed state compliant with current regulations.

Failure to reinstate:

A failure to reinstate the property and comply with this clause would be a breach of the Tenant’s covenants under the lease and the damage will be measured depending upon the actual loss borne by the landlord and whether it is reasonable in the circumstances for the landlord to carry out the works alleged to be required to affect the reinstatement. The quantum of loss is recoverable in respect of breach is not necessarily the cost of reinstating the property. The reinstatement amount is recoverable and is subject to the requirement that is reasonable in all the circumstances to reinstate the property. Otherwise, the measure of loss is the amount by which the alterations reduce the value of landlord’s reversion in the property. There is no rule that prevents a landlord recovering the cost of reinstatement simply because that costs exceeds the harm to his reversionary interest.

Here, at Askews Legal LLP, we have a dedicated team of specialists in the Commercial Property department to deal with commercial property issues. For further advice or to obtain a quote, please contact Mr. Kuljeet Sandhu, Head of Commercial Property at Askews Legal LLP.