Morning, #StoreTroopers!
As a landlord, I often must deal with tenants who split up, fall out, or simply want to move on from a joint tenancy, which can be tricky to say the least. It’s important to manage these situations carefully to avoid legal or financial issues. So, I thought today’s little ditty could be about what you need to know when one or more joint tenants want/need to leave, and how to handle the various scenarios from a landlord’s perspective.
Check the Type of Tenancy
First, confirm whether the tenants are on a joint tenancy. If they are, the entire group is responsible for the rent and upkeep of the property. Joint and several liability means you can pursue any tenant for unpaid rent or damages, even if one of them leaves. Now, while this legal protection is crucial for you as a landlord, it can often be tricky dealing with emotional people who may have not wanted the break-up in the first place. A little tact and diplomacy can go a long way to smooth the journey for everyone concerned. Trust me I know.
What Does Joint and Several Liability Mean for You?
Joint and several liability means that if one tenant doesn’t pay their share, you can pursue any of the remaining tenants for the full rent. It’s a safety net to ensure that you receive your rental income, even if the tenants' personal circumstances change
Common Scenarios in a Relationship Breakdown or Tenant Departure
Scenario 1: Both Joint Tenants Want to Leave
If both tenants agree to leave, the process is fairly straightforward:
You’ll need to agree on a surrender of the tenancy. If they’re still within the fixed term, this requires your consent. If the tenancy is periodic, they can serve notice, but this will end the tenancy for all tenants.
Next arrange an inspection and sort out the return of the deposit (making any deductions for damages, if necessary). Be sure to document everything with photos too.
Scenario 2: One Tenant Wants to Stay, and the Other Wants to Leave
This scenario is trickier:
You are not obliged to agree to one tenant leaving while the other remains. If you do agree, it may require creating a new tenancy agreement with the remaining tenant and a new tenant if they find a replacement. Although, this way you still have two tenants who will be more likely to afford the full rent between them.
If a replacement tenant is found, they will need to go through the usual referencing process, and a new tenancy agreement will need to be signed. You’ll also need to manage the deposit transfer or make new arrangements; this includes any deposit paid by the exiting tenant too.
However, if you do not agree to a tenant leaving, both tenants remain responsible for the rent until the end of the tenancy or until a mutual agreement is reached. You can pursue both tenants for any unpaid rent during this period.
Scenario 3: One Tenant Wants to Stay, but the Ex Needs to Leave
Similar to above, if one tenant wants to stay but their ex wants to move out, you can:
Request a new tenancy agreement with the remaining tenant, but remember, you must follow the same legal procedures for tenant referencing and agreements.
Ensure the departing tenant formally surrenders their share of the tenancy, ensuring you are clear on responsibilities before moving forward.
Scenario 4: One Out, One In (Change of Partner or Sharer)
This is the perfect solution in my humble opinion. If one tenant wants to leave and a new person (a partner or another sharer) is ready to move in, you can agree to a tenant swap. This involves:
Signing a new tenancy agreement with all parties involved.
Transferring the deposit appropriately, ensuring that the outgoing tenant receives their portion of the deposit back and the new tenant pays theirs.
Keep in mind that managing tenant changes does involve some admin work, and although you cannot charge excessive fees due to the Tenant Fees Act, there may still be costs involved for both you and the tenants so remember to discuss this with them.
What If the Tenants Don’t Have a Joint Tenancy?
In cases where only one tenant is named on the agreement, and the other is listed as a permitted occupier, the legal situation is much simpler. The permitted occupier has no liability for the rent or damages, so when they leave, it won’t affect the tenancy. Simples.
Quick Checklist for Landlords When One Joint Tenant Leaves
Check the tenancy agreement: Understand what it says about tenant changes or ending the agreement. Always good to know ahead of time anyway.
Communicate clearly: Keep all tenants informed about their rights and responsibilities. This is where a good tenant relationship comes in handy.
Get agreements in writing: If tenants agree to end the tenancy or one wants to be released, ensure you have written confirmation from all parties.
Carry out inspections: Always inspect the property before a tenant leaves and manage deposit returns appropriately. Remember to take pictures for your records.
• New agreements: If a new tenant is moving in, be sure to get a signed, updated tenancy agreement and complete referencing checks and guarantor signatures where applicable.
Final Thoughts
As a landlord, managing the departure of joint tenants requires a mix of legal understanding and careful communication. Joint and several liability works in your favour, but you’ll need to navigate new agreements, deposit arrangements, and tenant referencing to keep things running smoothly. By staying on top of the process and ensuring all parties are aware of their responsibilities, you can manage these situations with minimal disruption to your rental business.
Until next time, keep your investment compass steady and your dreams of property prosperity alive!
The Anonymous Investor.
*This blog post is for general information only and is not financial advice. Always speak to a financial advisor for guidance on your specific situation.
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