Individual Tenancies

Where a single landlord lets a single unit to a single person, life is pretty straightforward. Leases are agreed, signed, witnessed and dated, money changes hands and there are no other parties to complicate this arrangement.

Tenancies For Couples

Similarly, where couples (of either sex) take on a single unit, they enter a straightforward joint tenancy with their landlord. Both sign the same lease, meaning they have joint and several liability for the tenancy – in other words, each is liable for the other’s commitments agreed in the lease. If one party doesn’t pay rent, the other party is liable for the whole rent owed. Likewise for damage, whoever causes it, the pair of tenants always remain jointly responsible.

However, many tenants take on a place with a spare room then decide to sublet it without consent. Expect much tougher restrictions on this from now on as three non-related individuals sharing a single unit may bring your landlord into costly licensing requirements. Rent a place that you can afford without subterfuge. Most tenants rent what they need, not spare space.

Joint Tenancies

In a joint tenancy every tenant who signs the same lease is bound by the same terms, known legally as joint and several liability.

This is a very common scenario and, in any group of tenants even when they have been the best of pals, all being liable for each other can have significant implications. Here are the first four that I think of, there are 40 more combinations of complications I could have written here given space.

• If one tenant decides to leave, and gives notice to the landlord/ agent, technically the tenancy of you all can fold.
• Alternatively, if one tenant leaves, and the others agree jointly with their landlord to stay on, the remaining tenants are responsible for the whole of the rent, not just the percentage they were each paying before.
• Tenants need consent to replace one outgoing tenant with another person. Most managers will want to run credit checks and take up references at the very least. You can’t invite perfect strangers to live in your landlord’s building. It’s a clear breach of the lease. Changing tenants should trigger new lease signing procedures because a new group of tenants will be creating a new joint and several liability lease. Where agencies are involved, expect a batch of new charges.
• One tenant moving on will often require some arrangement for return of their deposit, triggering more charges for inventory checking to ensure no damages need paying for, prior to any refunds on deposits.

 

On and on run the ways that multiple occupation can cause headaches on both sides of the contract. Make sure if you agree to move in with others and tie yourself into this type of arrangement, that all of you will be able to stay the course of your initial fixed term or absolute chaos can ensue.

Complexities Of Joint Tenancies

Here I’m just scratching the surface to give you an idea of how they work, but joint tenancies are complex, as are a number of other ways of occupying houses either as groups, or collections of individuals. But, like licences, many thousands of successful joint and several liability tenancies are set up, run well and conclude happily each and every year, without a hitch.

Although brilliantly successful, there are significant safety issues that the government has finally addressed in its 2004 Housing Acts – in a valiant effort to raise standards for sharers, who are often the least financially equipped people and who some in our industry seem to unfortunately regard as ‘fair game’ for lousy conditions. (See Lesson 14 on Houses in Multiple Occupation for some strict new legislation to protect you. Frankly, together with deposit protection, this government has made real efforts to protect private rented tenants. Bravo!)

Joint tenancies are quite complicated to run for landlords/agents too. It can be really difficult for example when one tenant wants to leave, and wants their share of the deposit back. The landlord or agent won’t give back any part of the deposit before the property has been vacated and inspected. In some cases they will let you find another sharer, and the new tenant can ‘buy out’ the outgoing tenant’s share of the deposit by paying them direct.

In these circumstances you’re all likely to need a brand new lease – tricky for the tenants, tricky for the landlord when tenants have already used up most of their first fixed term and don’t want another whole six months’ liability. (This could be a situation for good, trustworthy tenants to be offered a new tenancy on a contractual periodic basis. However it’s always a difficult call for landlords/agents simply because guaranteed ‘no fault’ possession slips six months into the future each time a new lease is signed.)

If one party doesn’t pay their share of the rent on time the rest of you will have to make it up. If one party causes major damage you are all jointly responsible for the total cost. Many a large deposit has evaporated in this way. These tenancies can be messy and fraught with unseen problems. You need to thrash out all these types of issues before you embark on one.