Even the most secure tenancies can break down, from relationships ending to friends falling out and other unforeseen circumstances. But as the landlord, how do you react when one person says they are leaving a joint tenancy agreement, and how does it affect you? Here's what happens when one person leaves and your options as a landlord.
Joint and several liability
Tenants named on the tenancy agreement are responsible for the rent. And if the tenant exits the property while the rental contract is still in effect, they are liable to pay their share of the rent. No longer living in the property doesn't mean they're off the hook – they're still legally responsible for what they owe.
Joint tenants are 'jointly and severally liable' for all the obligations agreed to in the tenancy agreement. As the landlord, you're within your right to pursue all tenants even if just one tenant isn't fulfilling their contractual obligations, such as paying the rent.
Therefore, both you and the tenants should fully understand everything in the rental contract, which will likely be an assured shorthold tenancy (AST). This also goes for any guarantor who guarantees the rent for one or all tenants in a joint tenancy.
Leaving during the fixed term vs a periodic tenancy
The consequences of someone leaving a joint tenancy vary depending on when they move out. If it happens once the tenancy has switched to periodic, any one of the tenants can serve notice to quit that ends the tenancy for everyone as long as they provide sufficient notice.
However, when the tenancy is in a fixed period, things can get tricky. Tenants who leave before the fixed contract runs its course are still liable for the rent, and you can take legal action against them to ensure they pay for any monies owed should you wish to take that route. In the meantime, the remaining tenants are also liable for covering the full rent and are responsible for ensuring this is paid in full if they don't want to see their contractual right to live in the property challenged due to mounting arrears.
The process of a tenant changeover
In a joint tenancy, it is possible to draw up an addendum to the original agreement replacing the outgoing tenant with an incoming one. If you let the property to one tenant this usually isn't possible, but in a joint tenancy the process is relatively straightforward for the landlord (especially as they aren't on the hook for finding the replacement).
In this case, the tenants would find a new person to replace the outgoing renter and pay a £50 charge (one of the permitted payments under the Tenant Fee Act) to have the agreement amended or an addendum drawn up stating the new conditions of the tenancy with the new occupant.
This can save you considerable time and hassle, as the new renter replaces the old one, and you can continue receiving the rent. You can draw up the agreement amendment or addendum yourself or get a letting agent or solicitor to do it on your behalf. In any case, this is usually the best way forward when one tenant wants or needs to leave early while everyone else is happy to continue with the tenancy.
Negotiating a deed of surrender to end the tenancy early
One option to end the tenancy involves a deed of surrender. This is when the tenants agree to return vacant possession of the property to the landlord.
A deed of surrender can occur at any point during the tenancy, be it periodic or fixed term. It essentially allows the tenant and the landlord to end the tenancy. If it's a joint tenancy, however, the deed of surrender will only apply to one tenant unless both tenants sign it.
Essentially this means you, as the landlord, accept the tenants are moving out of the property and no longer paying rent. You can, however, charge them an early termination fee to cover any reasonable costs incurred, such as the rent up to the end of the fixed-term contract or marketing fees incurred to find new tenants.
The problem with a deed of surrender in this scenario is that it would only be possible to end the tenancy for all of the renters. They might all agree to proceed if there are irreconcilable differences and the remaining tenants cannot afford to meet the monthly rent, but this often isn't the case.
Talking it out
Sometimes the best route forward is communication. If both yourself and the tenant who wants to leave have a cordial relationship, it's probably worth discussing the situation and coming to a reasonable arrangement.
For example, you may agree that the tenant will remain in the property until a new one is found. Alternatively, it might just be better for everyone involved to cut ties so you can focus on the next steps, such as finding a tenant.
The key is communication, as it can mitigate the situation escalating to the point where the relationship sours with every tenant, and it's hard to find a conclusion that satisfies everyone involved. It's far from ideal when one tenant leaves during a tenancy but, more often than not, a solution is achievable.
Summary: Ensuring a smooth joint tenancy
Joint tenancies can be tricky if something goes wrong with one of the tenants. That's why you need a clear understanding of how joint and several liability works and what it means for the tenants' responsibilities in the tenancy. If one tenant leaves during the fixed term, you have the right to pursue the rent owed from the remaining residents. However, each situation should be viewed individually, taking all the factors into account. A tenant changeover, with the onus on the tenants to find a replacement for the departing occupier, is usually the best way forward.
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