Retaking Possession Doesn’t Prove Landlord Accepted Tenant’s Surrender

What Happened: Seven years into its 10-year lease, a restaurant decided to permanently shut down its business and surrender the premises to the shopping center landlord. The key question: Did the landlord actually accept the surrender? The landlord claimed it did no such thing and sued the tenant for past-due rent and rent remaining on the lease. The tenant won the first round when the trial court ruled that in taking exclusive control over the premises, the landlord accepted the surrender.

Ruling: The Georgia appeals court reversed and ordered a trial to be held on the question of surrender.

Reasoning: Surrender occurs when a tenant voluntarily gives up possession of the premises before the lease expires and the landlord accepts possession with the intention that the lease terminates. Acceptance of surrender can be either express or implied. The trial court was wrong to find that the facts “compelled” the conclusion that the landlord exhibited such an intent, said the court. True, the landlord retook possession; but it didn’t directly take back the keys—the tenant mailed them without notifying the landlord that it was surrendering the premises and the landlord merely accepted the FedEx package. And even after taking back control of the premises, the landlord left the signage in place and reached out by email to let the tenant know that “we were and still are willing to work with you to keep the unit open.” This was just too close a call for summary judgment, the court concluded.

• CPI-Phipps Ltd. v. Billboard Corp., 2023 Ga. App. LEXIS 103, 2023 WL 2254064