Leasing License Practice Exam

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What is it called when both the landlord and tenant agree to cancel a lease prior to its expiration?

Termination of Lease
Surrender of Lease
Lease Negotiation
Lease Breach

The correct answer is: Surrender of Lease

When both the landlord and tenant agree to cancel a lease prior to its expiration, this agreement is referred to as a surrender of lease. This process involves both parties mutually consent to end the leasing arrangement, typically documented in writing to protect the interests of both the landlord and tenant. Surrender of lease can occur for various reasons, such as changes in circumstances for the tenant, property conditions, or other personal or business needs. It signifies a negotiation where the terms are settled amicably, which can help avoid potential disputes in the future or implications associated with lease breach. In contrast, termination of lease typically refers to situations where the lease is ended due to default or violation, rather than mutual agreement. Lease negotiation pertains to discussions aimed at modifying the lease terms, while lease breach involves breaking the conditions agreed upon in the lease.