A Landlord’s Guide to Joint Tenants

Joint tenancies are a great option for landlords with more than one tenant in a property. 

They are less effort to manage and your rent is more likely to be paid in full. However, they can be quite complicated to set up. 

It’s important that you understand joint tenancies so you can draw up robust tenancy agreements and explain them to the residents in your properties. 

You also need to know what rights you and your tenants have should something happen, for example, if they are a married couple and their relationship breaks down. 

This article provides landlords with a detailed overview of joint tenancies. 

Highlights:

• A joint tenancy is where up to four people sign the same tenancy agreement and take responsibility for paying rent. They share all areas of the property equally.

• An alternative to a joint tenancy is to have several sole tenancies, or a single tenancy with sub-tenants and lodgers.

• The benefits of choosing a joint tenancy are: less admin, fewer concerns over bills, more responsible tenants and a lower tax bill.

• The downsides are that problem joint tenants can end a tenancy, and that good tenants sometimes have to take responsibility for bad ones. 

• If your joint tenants are married or partners and the relationship breaks down, they are both still responsible for the tenancy. You will need to start a new tenancy agreement with the remaining tenant. 

What Is a Joint Tenancy?

A joint tenancy is where up to four people all sign the same tenancy agreement and take responsibility for paying rent. They share all areas of the property equally.

It’s usually signed by people with a close personal relationship. For example, a couple, family members or a group of friends.

Although each tenant has equal rights to all parts of the property, in practice joint tenants may agree exclusive possession of some rooms or rent splits amongst themselves.

Each tenant must:

• Be listed on the assured shorthold tenancy agreement (AST) as the lessee. 

• Sign the agreement. 

• Have the same rights and obligations. 

• Enter the tenancy agreement simultaneously.
  
  

Joint and several liability

There are different types of liability in tenancy agreements. Liability is the tenant’s responsibility to the property and landlord. 

Most joint tenancies are based on something called “joint and several liability”. This means that each tenant makes a joint promise to fulfill the obligations listed in the tenancy agreement to their landlord. This could include paying rent on a certain date each month. 

All tenants are both individually and jointly responsible for fulfilling this promise. In the example of the rent, one tenant could pay the rent on behalf of the others. As a landlord, you can pursue any or all joint tenants if they fail to meet the promise.

For example, let’s say you have two people living in your property under a joint tenancy. Both agree to pay you £500 each per month. If one of them doesn’t pay the rent then you could ask the other tenant to pay the £1,000 in full. This is useful when one tenant cannot pay, for example, if they lose their job. 

Alternatives to Joint Tenancies

We’ll explain the pros and cons of joint tenancies later in this article. First, it’s useful to understand the alternatives. 

Sole Tenancies

You could choose to have multiple sole tenancies. In this case, each tenant has their own individual tenancy agreement. It usually gives each person exclusive rights to a room and shared use of facilities.  

Sub-tenants and lodgers

You may decide to allow a sole tenant to sublet rooms or take on lodgers.

Sub-tenants usually have the same rights as a sole tenant, i.e access to one room and shared facilities and an agreement to pay rent with the landlord. However, the sole tenant is ultimately responsible for paying the rent. 

Lodgers are different. They live in a property with their landlord and pay to rent out a room. Some lodgers receive other services with the accommodation, like cleaning and meals.

These kinds of agreements are usually only in place where the landlord trusts the sole tenant or has a relationship with them, for example, a family member. 

Joint tenancy pros and cons

Pros

• Less admin: You can collect one deposit from only one person, making things nice and simple.

• Less concern over bills: In a sole tenancy, if the tenant fails to pay their council tax or similar bill then it sometimes becomes the landlord’s problem. In joint tenancies, it becomes the other tenants’ responsibility before yours. 

• More responsible tenants: Because your tenants are jointly responsible for the tenancy they will police each other on things like keeping the property in good shape and paying rent on time. 

• Lower taxes: Joint tenancy properties are less likely to be considered HMOs by their local authority. If you have many sole tenants then your local council may consider your property a house of multiple occupancy (HMO) for tax purposes. This means you could pay higher taxes or have to acquire local licences. Note that this is different from it being considered an HMO under the Housing Act 2004, so you won’t need to get an HMO licence. 

Cons

• Problem tenants can end the tenancy: If one tenant needs to leave then you need to end the tenancy agreement. This means that relationship issues between tenants can cause you major hassle. For example, say your joint tenants have an argument and one leaves the property and stops paying rent. The tenant who has left and the existing tenants are still liable to pay that rent. You have to choose whether to:

• Pursue the tenant who has left for rent

• Ask the remaining tenants for the rent

• Start a new tenancy agreement
  
  If you pursue the remaining tenants, then they might also refuse to pay. You can either find new tenants or take legal action. Either way, the tenancy agreement will come to an end.

• Good tenants suffer from bad tenants: If a bad joint tenant doesn’t pay their rent then you can pursue the others for it. While this will get you your money, it also means good tenants suffer for the actions of bad ones. 
  
  

Joint Tenancies FAQ

Here are answers to some common questions involving joint tenancies.

How does a deposit work under a joint tenancy?

Under a joint tenancy agreement, a single deposit is paid by all of the tenants together. 

Like with other tenancies, this is held by a deposit protection scheme. The deposit is tied to the tenancy and not to individual joint tenants. In other words, you only need to return the deposit if the tenancy agreement ends. 

You don’t have to give it back if one joint tenant decides to leave but the tenancy continues. However, you can agree to protect each tenant’s deposit separately. 

Getting your tenants to agree on what will happen when a joint tenancy ends is a good idea. This can be written into the tenancy agreement, which helps avoid future disagreements. 

Ask your tenants to appoint a lead tenant

Your deposit protection scheme may ask joint tenants to choose a lead tenant who they can contact when the tenancy ends.

Some schemes pay all of the money to the lead tenant, while others will distribute it amongst joint tenants.

If your tenants do not name a lead tenant then the deposit protection scheme will either choose one for them or repay the deposit to the first joint tenant that contacts them.

Can new tenants enter an existing tenancy?

You cannot add new tenants to a joint tenancy. Instead, you have to start a new one. 

To avoid disagreements and confusion you should ask the new joint tenant to pay their deposit directly to you, rather than via another tenant. 

Who pays rent?

As mentioned earlier, under joint tenancies all tenants are usually responsible for paying all of the rent to you. In other words, if three tenants pay their share of the rent but a fourth tenant does not, then all tenants are responsible for the shortfall. 

If the shortfall isn’t paid, then all four of the tenants are considered to be in rent arrears. This means that you can take action against all tenants, including:

• Deducting deposit money

• Evicting all tenants

• Recovering money from tenants

• Recovering money from a guarantor (a third party who guarantees the rent) 
  
  

How are bills paid?

Responsibility for paying bills at the property should be left up to your tenants to decide between themselves. 

It might be helpful to explain to them that whoever’s name is on the bill is responsible for it. In joint tenancies, the fairest approach might be to have everyone’s names on a bill.

If for whatever reason you want to pay the bills, this should be clearly stated in your tenancy agreement. 

Who pays for damage and repairs?

Joint tenants are also equally responsible for damage to your property. You can choose to ask an individual tenant to pay for any damage, or ask all tenants to pay for it. 

Like with rent, you don’t necessarily need to ask the tenant who caused the damage to pay. 

You can also deduct money from the joint deposit at the end of the tenancy for damages, even if only one joint tenant caused it.

Any of your tenants can report poor housing conditions and ask you to perform repairs.

What happens when there are disputes between tenants?

Only get involved in disputes when one of your tenants has broken the terms of their tenancy agreement. 

This could include:

• Damaging the property

• Antisocial behaviour (like drug abuse)

• Unauthorised subletting
  
  

Tenants have the right to invite guests into their home and let them stay overnight. 

Neither you nor other joint tenants can force a tenant to leave the property. The only way to do this is to end the tenancy for everyone.

If your tenants contact you about a dispute between them you can give them this guide from Shelter. It provides useful information that could help them resolve the problem. 

What happens if I need to take court action?

Similar to rent recovery, you can choose to take court action against any and all tenants in a joint tenancy or a guarantor. You can only take recovery action for a sum of money once. 

If you want to repossess your property then you must take this action against all tenants, as you will be effectively ending the joint tenancy.

How to end a joint tenancy

Joint tenancies are usually based on rolling periodic or fixed-term contracts. How you end your tenancy depends on which one you have.

Note: under the upcoming Renter’s Reform Bill fixed-term contracts will be scrapped and all tenancies will be periodic. At the time of writing the bill has not yet been written into law.

What if all tenants want to move out during a fixed-term tenancy?

If your tenants were to leave the property then their fixed tenancy continues. You can ask them to continue paying rent even if they are living somewhere else. 

It is possible for your tenants to end a fixed-term joint tenancy if:

• There is a break clause in their tenancy agreement that enables it

• You agree to negotiate an early end to the fixed term

• The tenant unwinds the contract in court because you misled them
  
  

Your tenants cannot end a joint tenancy unless they all agree to do so, and all agree on which of the options above they use. 

What if all tenants want to move out during a rolling tenancy? 

If your tenants have a rolling contract then they can usually end it at any time, as long as:

• All tenants agree

• They give you notice, usually one month
  
  

What if one of your tenants wants to move out?

If one tenant wants to leave then you need to start a new tenancy agreement. The new type of tenancy agreement depends on how many other joint tenants you have left, or if you replace the tenant who leaves. 

What if all tenants move out when the fixed term expires?

Your tenants are free to leave by the last day of the fixed term. It’s usually a good idea to write a clause in their tenancy agreement requiring them to inform you if they choose to do so. This ensures you have time to advertise for new tenants.

What if tenants stay after the fixed-term joint tenancy expires?

If at least one tenant stays on after the fixed term expires then the contract continues as a rolling or periodic tenancy.

However, this technically still counts as the same contract, so tenants who have moved out are still equally responsible for paying rent. 

You should move your new tenants onto a new contract as soon as possible. 

What if your tenants’ relationship breaks down?

If you rent to a couple under a joint tenancy agreement and their relationship breaks down then the same rules above apply.

A relationship breakdown can make things more complicated, as one partner will probably leave the property and the other may have to cover rent alone. 

Here are some of the things you can do in this situation:

• Communicate well: Don’t get involved in people’s personal affairs, but stay in touch about what is happening from a tenancy perspective.

• Inspect the property: The chances are that one or both of your tenants will be moving out, so it’s worth checking its condition and whether you need to make repairs for the next tenant.

• Review the tenancy agreement: Keeping the same joint tenancy agreement means that both partners will be responsible for rent, even if one of them moves out. This means you have a better chance of being paid. However, there may be reasons to switch to a single tenancy, for example, if one partner has experienced domestic abuse. 

• Consider your tenants’ status: If your tenants get divorced then it can impact you. For example, they could become eligible for housing benefit, in which case you’ll need to arrange for payments to come directly from the Department for Work and Pensions (DWP).
  
  

Take the Hassle Out of Managing Your Properties with EVO

Joint tenancy agreements are a good way to ensure that you are paid rent and that your property is looked after well. 

But they can be complicated for you and your tenants. 

A digital property management platform like EVO won’t help you draw up these tenancy agreements. But it does allow you to store all your property and tenant documents online, making them easy to access for you and your tenants. 

This empowers tenants and means less questions for you to answer. 

Get in touch to find out how EVO takes the hassle out of managing your properties.