Joint and Several Tenancies
Joint tenancies can be agreed with two or more people from the outset of the tenancy. Each tenant can then be responsible jointly and severally for meeting the tenancy terms in full, including paying the rent. This is known as joint and several liability. Joint and several liability arises only by agreement. If nothing is agreed, the tenants will be jointly liable.
For example, if a property is let jointly and severally to four tenants, A, B, C and D, for a monthly rent of £800, with each agreeing to pay £200, and C decides to leave, they will each remain liable under the contract for all of the rent. So, C is still responsible for the rent even though they may not be living there, and A, B and D will each be liable to the landlord for all of the rent, including C’s £200 share. This situation will continue until either vacant possession is returned to the landlord or a new tenancy is signed, for example, with A, B, D and perhaps a new tenant, E.
Technically, a tenancy can only be in the names of four tenants, as only four people can hold a legal interest in land. However, if more than four tenants wish to share, the additional tenants will still be liable for the rent, and everything else under the contract, and their co-tenants will be deemed to hold the tenancy in trust for themselves and the others. Practically, therefore, the four-name rule is not a problem.
Changing joint tenants
You need to take extra care where there are joint tenants wishing to change.
A deed of assignment is usually not the best way to address a change in a joint tenancy, especially when one tenant is leaving, and another is being added.
That is because an assignment is really a transfer of the whole tenancy. It is not a natural fit where some joint tenants are staying, and only one person is leaving or joining.
The word “assignment” is not a term of art. It denotes any conveyance, transfer, assurance or other disposition of property from one party to another. The essence of an assignment is that it operates to transfer its subject-matter from the ownership of the assignor to that of the assignee. A lease is not an assignment, because it does not transfer any pre-existing property from the lessor to the lessee, but creates a new interest and vests it for the first time in the lessee. A purported assignment of the interest of one joint tenant to the other joint tenant does not constitute an assignment, because each of the joint tenants is already the owner of the whole. The so-called assignor has no separate interest of his own which is capable of being transferred to the other and which the other does not already own. …
Source: Lord Millett, Burton v. Mayor etc of The London Borough of Camden [2000] UKHL 8
Note: The above is not necessarily decisive, as it was an obiter comment and the case was not decided on that basis. However, it’s a helpful, authoritative comment. There are provisions in the Law of Property Act 1925 that allow certain transfers between joint tenants, which may be relevant in certain circumstances.
Using an assignment in that sort of case can create unnecessary complications:
- the paperwork becomes harder to follow
- the old tenancy may stay in the old names, with extra documents added later
- there is more room for mistakes
- if you later need to serve notices or start possession proceedings, the file may be harder to untangle
- the written statement of term, safety records and other documents need to be provided before the tenancy is entered into or before occupation.
For most landlords, the better course is usually to:
- agree to end the existing tenancy
- grant a new tenancy to the new group of tenants
That way, the tenancy agreement itself shows the correct tenants from the start.
Permitted Occupiers
The general rule for joint and several tenancies is that all occupants aged 18 or over should be named as tenants on the tenancy agreement.
Permitted occupiers should generally be avoided, as it can be challenging to understand the correct possession procedure when occupiers in the property are not named as tenants on the tenancy agreement.
The exception to the general rule is where a family is occupied with their children. The children would not ordinarily be named as tenants, even if they were adults. It would not be expected that children living with their parents would be liable for the rent or for damages.
Otherwise, many tenancy agreements allow “permitted occupiers” to be listed. Any occupiers of any age can be listed if desired.
A permitted occupier will essentially be a lodger of the named tenants. Care should be taken not to do anything that could convert them into a tenant, such as accepting rent from them or taking repair instructions from them.
Listing permitted occupiers can be helpful for right-to-rent or overcrowding rules because it effectively gives consent to a limited number of occupiers. If more occupiers are found to be at the property later, it will be clear from the tenancy agreement how many occupiers, not just tenants, were permitted when the tenancy was granted.