The advantage of joint tenancies explained
A buy-to-let landlord client recently found that a couple he had been renting to had gone their separate ways. We’d had no problem with them for the three years that they had been renting from him, but the remaining tenant had now refused to pay the full rent. The tenant said that since his girlfriend had left, he couldn’t afford the full amount since she’d always paid half. He also felt that he shouldn’t have to pay, as his now ex-girlfriend had been named as a joint tenant on the tenancy agreement.
Here’s what we were able to do because we had written the tenancy agreement as the tenants being jointly and severally liable.
Joint and several liability rules
It’s common that tenancies are shared between more than one person: a married couple, two or three friends, or, as in this case, partners in a relationship. It’s also common that such arrangements break down. Married couples get divorced, friends go their separate ways, and romantic couplings split.
This is why it is important to name each tenant separately in the tenancy agreement. By doing so, you make them jointly and severally liable for the costs of their home (e.g. gas and electric, and council tax). Crucially, this includes the rent.
It’s a kind of ‘all for one, and one for all’ arrangement. It means that each named tenant is liable to pay the full rent, irrespective of private agreements between them, and irrespective of how the rent is usually paid.
It doesn’t matter who pays, all tenants are liable ‘severally’
The tenants in our example always paid by two direct debits. Each month, just after he and his girlfriend had been paid, the direct debits would be paid. Each for half the rent: one from him, and one from his girlfriend.
He falsely assumed that this meant he was only responsible for paying half the rent. He thought that his girlfriend should pay the other half. In fact, as we pointed out because they were both named on the tenancy agreement, if one direct debit had failed, we would be able to chase the other partner for payment – as in this situation.
What we told him was that:
- He was liable for the whole rental payment each month
- He should have let us know about the change in tenancy (i.e. one tenant had left) as soon as it happened
What if the remaining tenant can’t pay?
With the law clear, the remaining tenant had a problem: he didn’t earn enough to pay the full rent. We spoke to him about this and liaised with the landlord simultaneously. Between us, we agreed that:
- The tenant would stay on the property for a maximum of four weeks. He had always been a good tenant and looked after the property well. The landlord didn’t want to cause the tenant hardship but didn’t want to cut the rent. In fact, a rent review was due, and the landlord had been considering increasing the rent by £25 per month.
- During these four weeks, the tenant would allow viewings to be conducted with tenant applicants.
- We found new tenants, who were happy to pay the new, increased rental amount.
- We also found a new, smaller apartment for the original tenant, with a lower rent that he could afford.
- The rent that the tenant had not paid was paid to the landlord from the tenancy deposit.
Could the tenant have refused to vacate the property?
Because the tenants had been in the property for so long, they had been transferred onto a periodic tenancy. In other words, the terms of the original tenancy agreement remained in place, rolling over from one payment period to the next.
If the tenant had refused to leave and refused to pay the higher rent, we could have taken vacant possession faster by serving a Section 21 Notice.
Working hand-in-hand is always better
While the law is clearly on the side of the landlord in this example, it’s also a story that proves it is always better to build good relationships with tenants, treat them fairly, and ensure the tenancy agreement is on your side.
The tenant’s issues weren’t with the landlord, but with his ex-girlfriend. By negotiating between the landlord and tenant, and explaining the points of law, and by the landlord being flexible, it worked out well for all:
- The tenant was given time to find a new home, while not being made homeless
- The landlord found new tenants quickly, with no void period
- The landlord received all his rent
- The new tenants paid an increased rent
This story goes to show that when you get the tenancy agreement right, and when you have built a good relationship with the tenant, amicable win/win solutions really are possible. Get in touch with the team at Ezytrac on +44 0 1522 503 717 and discover how we help landlords in all situations.
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