A Release of Liability for Tenancy is a legally binding contract under English law by which the landlord and tenant formally agree, at the end of a tenancy, to release each other from all claims that have arisen or may arise from the tenancy relationship. Also known as an end of tenancy release or a tenancy settlement agreement, it provides both parties with finality and certainty once the tenancy has ended and the tenant has vacated the property.

The document addresses the key points of dispute that commonly arise at the end of a tenancy in England and Wales: the return of the tenancy deposit, deductions for damage or dilapidations, outstanding rent arrears, the condition of the property, and the performance of each party's obligations under the tenancy agreement and the applicable legislation. By signing the release, both parties confirm that all matters have been settled and that neither will pursue the other in court or before a deposit adjudication scheme in relation to the released claims.

In England and Wales, residential tenancies are primarily governed by the Housing Act 1988 (which introduced the assured shorthold tenancy regime that applies to the vast majority of private residential lettings), the Landlord and Tenant Act 1985 (which sets out the landlord's implied repairing obligations), the Housing Act 2004 (which introduced mandatory deposit protection in government-approved schemes), the Deregulation Act 2015 (which strengthened deposit protection requirements), and the Tenant Fees Act 2019 (which restricts the charges and deductions a landlord may make from a tenant's deposit).

This Release is governed by English law and is intended for use in respect of properties in England and Wales. It is not intended for use in Scotland or Northern Ireland, which have separate legislative regimes for residential tenancies.

A Release of Liability for Tenancy is the appropriate document to use at the conclusion of any private residential tenancy in England and Wales where the parties wish to achieve a clean break and avoid future disputes. It is particularly important in situations where there is any potential for disagreement about the deposit, the condition of the property, rent arrears, or other aspects of the tenancy.

The release is typically used in the following circumstances: at the end of an assured shorthold tenancy (AST) where the landlord and tenant have agreed on the deposit return and any deductions and wish to confirm that agreement in writing; where there has been a dispute during the tenancy about repairs, maintenance, or the landlord's obligations under section 11 of the Landlord and Tenant Act 1985, and the parties wish to settle that dispute on a full and final basis; where a tenant has been in rent arrears during the tenancy and the landlord agrees to accept a reduced sum in full and final settlement; where the property has suffered damage during the tenancy and the parties have agreed on the level of compensation to be paid by the tenant or deducted from the deposit; and where a tenancy has ended early by agreement and the parties wish to document the agreed terms of the early termination and release each other from further obligations.

The release is also useful where the tenancy has involved a letting agent: the release can confirm that the agent's role has ended and that any claims against the landlord in connection with the agent's management of the property are also released.

This Release should not be used to compromise an employee's statutory employment rights in the employment context, which requires a statutory settlement agreement under section 203 of the Employment Rights Act 1996. It is also not a substitute for formal legal proceedings where the parties are unable to reach agreement, in which case the tenant or landlord should seek advice from a solicitor or apply to the relevant deposit scheme's adjudication service.

A well-drafted Release of Liability for Tenancy for use in England and Wales must contain several key provisions to ensure it is legally effective, comprehensive, and protects the interests of both the landlord and the tenant.

The identification of the parties and the property is the essential starting point. The release must name the landlord and tenant exactly as they appear on the tenancy agreement, and must identify the rental property by its full postal address and postcode. Where there are joint tenants, all should be named.

The tenancy period clause records the start and end dates of the tenancy and the date on which the tenant returned the keys. Confirming the key return date is important because it establishes the date from which the tenant's liability for rent and utilities ceases.

The deposit settlement clause is the heart of most end of tenancy releases. It should specify the total deposit amount, the deposit protection scheme in which it was held (TDS, DPS, or MyDeposits), the amount being returned to the tenant, and a clear itemised description of any deductions. Under the Tenant Fees Act 2019, only permitted deductions may be made, and the release should confirm that any deductions comply with that Act. The clause should expressly state that the return of the deposit balance constitutes full and final settlement of all deposit-related claims, including any claim under section 214 of the Housing Act 2004.

The property condition clause confirms the agreed state of the property at the time of vacation, in accordance with the fair wear and tear standard recognised by English landlord and tenant law. Recording the final utility meter readings in the release confirms the date from which the tenant's responsibility for utilities ends and reduces the risk of disputes with utility providers.

The release of claims clause is the operative provision that discharges the parties from future litigation. The release should be carefully worded to cover all known claims arising from the tenancy, including rent arrears, damage, dilapidation claims, and any breach of the tenancy agreement. An optional mutual release covers claims by both parties against each other.

The governing law clause confirms that the release is governed by the laws of England and Wales and that disputes will be resolved in the courts of England and Wales. This is particularly important where either party is not resident in England and Wales at the time of signing.