At its most basic, a lease is a contract requiring a landlord to provide accommodation and the tenant to pay a rent for use of the accommodation for a fixed time period.Normally, many other conditions are included in a lease, such as who is to pay the land tax etc.As the contract is for a fixed period, any party breaking early is in default and may be liable to compensate the non-defaulting party.Often, a lease is for a foreseeable time period, such that neither party requires the contractual ability to terminate early due to a change in circumstances.If a lease is for a longer period, a landlord and tenant may agree contractual circumstances when one or both may require early termination without liability for loss.As expats constitute a significant portion of the Bermuda residential lettings market, residential leases usually allow a tenant to terminate early in the event that a work permit is withdrawn or not renewed. In such circumstances, the tenant is able to serve notice and the landlord can look for an alternative tenant during the notice period.In the commercial market, landlords and tenants generally look for longer term arrangements but with some added flexibility.A landlord ideally requires a long lease period but a tenant often prefers a shorter period. Both can be accommodated by a longer lease period but with the tenant afforded the ability to surrender (also known as a break clause), for example, halfway through the period.Tenants are often also given an option to call for a new lease period, which is often known as renewal.A tenant that can pay the rent is likely to want to stay at the end of a lease period as moving out can lead to significant expense and business interruption costs. Consequently, landlords are often flexible when negotiating lease periods.Generally, there are three options for a tenant wanting to move out before the end of a lease period: surrendering, transferring, or subletting.Unless contractually available, surrender cannot be forced on a landlord. Logically, unless the landlord has a replacement tenant, at an equal or higher rent, a landlord might refuse to accept surrender.Ordinarily, after surrender, neither the landlord nor the tenant has any liability or obligation to the other. For this reason, the landlord should ensure that all the tenant’s obligations under the lease have been complied with and rents paid, before signing or accepting the surrender.If a landlord is unwilling to accept surrender, a tenant might next consider transferring also known as assigning the lease to a third party assignee.After such a transfer, the assignee “stands in the shoes of the tenant” and is liable to the landlord as the tenant would otherwise be.A disadvantage to transfer is that the tenant remains liable to the landlord for default by the assignee. A tenant may request a release after transfer but there may be no obligation for the landlord to give such a release.If either surrender or transfer is unavailable, a tenant should consider subletting. When a tenant sublets, the tenant remains liable to the landlord under the lease as before. A wise subletting tenant shall ensure, as far as possible, that all lease obligations are passed to the sub-tenant. However, even in those cases, the tenant can remain ultimately responsible to the landlord.A lease often states the circumstances under which a tenant may sublet. A landlord shall be interested to make sure that the sublet contains acceptable conditions because for practical reasons, the sub-tenant can become the landlord’s immediate tenant. This can happen, for example, if a tenant becomes bankrupt.Subletting or sharing by a non-Bermudian company may require a license from Government under section 123A of the Companies Act 1981.There is no such thing as a “standard lease” and so it is important to obtain legal advice and know the contractual conditions before signing a lease, whether landlord or tenant.Lawyer Neil Molyneux is a member of the Property Practice Group at Appleby (Bermuda) Limited. A copy of this column is available on the firm’s website at www.applebyglobal.com.This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.