Joint Tenants - 1 dropped out

[Matt_D]

Hi everyone,

 

I've got quite a complicated problem - I hope someone can help me out. I've tried to explain it as best I can, but if any of it is unclear, I apologise in advance!

 

I signed an AST with friends in August 2007 for one year, and it has just come to an end. We have vacated the property.

 

Initially, there were 6 of us going to live there, and there are 6 named tenants on the AST. However, 1 tenant dropped out and never actually moved in. The landlord allowed us to move in anyway, on the understanding that we would look for a replacement sixth tenant. This never happened.

 

We signed the AST agreement and returned it to the landlord, but we never received a copy of it signed by all parties (i.e. the five tenants who moved in and the landlord).

 

The rent payable was specified in the AST as one large monthly amount, and we each simply paid 1/6 of this amount every month. This meant, therefore, that by the end of the tenancy, there was a shortfall of 1/6 of the monthly rent for each of the 12 months of the tenancy, as a replacement sixth tenant was never found.

 

The landlord is now seeking payment of the shortfall in rent.

 

Although the actual AST agreement did not state that we were jointly and severally liable, there is an "Important Note for Tenants" on the cover page of the AST that states that we are jointly and severally liable. The AST itself is poorly drafted and appears to have simply been copied and pasted from a precedent document.

 

We each also had a guarantor who signed a guarantee agreement. This guarantee agreement named only the particular tenant with whom they were associated, and not all six tenants.

 

My questions are as follows:

 

1. Should we request a copy of the AST agreement signed by all parties? Would the landlord's failure to be able to produce this negate his ability to recover the remainder of the rent?

 

2. Are we bound by the "Important Note for Tenants" regarding joint and several liability, despite the fact that it does not form part of the body of the agreement?

 

3. Is the shortfall in rent classed as a debt (i.e. performance of the contract) or damages? This would, I imagine, affect the following two questions:

 

4. Is the landlord under a duty to mitigate his loss by looking for a sixth tenant himself? I suspect not, having read the post on recent case law, but I thought that I would check anyway.

 

5. As the landlord allowed us to carry on living there, and did not demand payment of the remaining rent until the expiry of the 12 month period, could we argue that he had waived the breach of contract and consequently now has no right to recover the remaining rent?

 

6. Are our guarantors subrogated into our positions and therefore liable jointly and severally, or would they only be liable for the specific debt of the tenant named on the guarantee agreement?

 

Just to complicate matters a little further, the landlord took a deposit from us equivalent to one month's rent. It has, as far as I can tell, been held in accordance with a Tenancy Deposit Scheme (I am currently checking to see whether the landlord has complied with all the necessary provisions).

 

He is withholding this deposit on the basis that there is rent outstanding. There is, however, a clause in the AST agreement that states "The Tenant pays the Deposit as security for the performance of the Tenant's obligations and to pay and compensate the Landlord for the reasonable costs of any breach of those obligations. It is specifically agreed that this money is not to be used by the Tenant as payment for any rent due under this agreement".

 

7. Does this mean that the landlord cannot use the deposit to offset the rent that is outstanding?

 

Finally, as I understand it, the Tenancy Deposit Scheme used, which is the Deposit Protection Service, provides for the payment of interest on deposits.

 

8. Does anyone know in what circumstances I can claim interest on my deposit?

 

9. Does wording in the AST agreement stating that "No interest shall be payable on this Deposit" override the provisions of the Deposit Protection Service terms and conditions, or does this constitute a waiver of my right to interest on my deposit?

 

Thank you in advance for your help!

[MrShed]

What does the AST you signed say regarding rent - i.e. what does it specify as the monthly rent? And what did you each pay?

 

Unfortunately I think you could be onto a loser here, answers below in red(assuming that the tenancy agreement is a standard joint tenancy):

 

1. Should we request a copy of the AST agreement signed by all parties? Would the landlord's failure to be able to produce this negate his ability to recover the remainder of the rent?

 

You should request, and he should supply. However, it doesnt negate his ability to recover the rent, as he would almost certainly just produce at court.

 

2. Are we bound by the "Important Note for Tenants" regarding joint and several liability, despite the fact that it does not form part of the body of the agreement?

 

AFAIK joint and several liability is assumed, legally, for joint tenancies and does not have to be explicitly stated. However, this is dependant upon the question I asked above. Was the "note" signed by the parties concerned?

 

3. Is the shortfall in rent classed as a debt (i.e. performance of the contract) or damages? This would, I imagine, affect the following two questions:

 

I dont really understand the question, but it has nothing to do with damages.

 

4. Is the landlord under a duty to mitigate his loss by looking for a sixth tenant himself? I suspect not, having read the post on recent case law, but I thought that I would check anyway.

 

Unfortunately not.

 

5. As the landlord allowed us to carry on living there, and did not demand payment of the remaining rent until the expiry of the 12 month period, could we argue that he had waived the breach of contract and consequently now has no right to recover the remaining rent?

 

No - the landlord has 6 years to recover shortfalls. However, it may well be questioned in court why he took so long, and this will look badly upon him, but ultimately will not change the result.

 

6. Are our guarantors subrogated into our positions and therefore liable jointly and severally, or would they only be liable for the specific debt of the tenant named on the guarantee agreement?

 

That would depend on the exact wording of the guarantor agreement - but quite possibly yes, they could be liable to cover for the 6th rent.

 

Just to complicate matters a little further, the landlord took a deposit from us equivalent to one month's rent. It has, as far as I can tell, been held in accordance with a Tenancy Deposit Scheme (I am currently checking to see whether the landlord has complied with all the necessary provisions).

 

He is withholding this deposit on the basis that there is rent outstanding. There is, however, a clause in the AST agreement that states "The Tenant pays the Deposit as security for the performance of the Tenant's obligations and to pay and compensate the Landlord for the reasonable costs of any breach of those obligations. It is specifically agreed that this money is not to be used by the Tenant as payment for any rent due under this agreement".

 

7. Does this mean that the landlord cannot use the deposit to offset the rent that is outstanding?

 

No - it means YOU cannot say to use the deposit as rent. As it explicitly states that the deposit is to secure "performance of contract", it CAN be used to cover rent by the landlord.

 

Finally, as I understand it, the Tenancy Deposit Scheme used, which is the Deposit Protection Service, provides for the payment of interest on deposits.

 

8. Does anyone know in what circumstances I can claim interest on my deposit?

 

Not to my knowledge it doesnt - interest on deposits goes to fund the DPS itself.

 

9. Does wording in the AST agreement stating that "No interest shall be payable on this Deposit" override the provisions of the Deposit Protection Service terms and conditions, or does this constitute a waiver of my right to interest on my deposit?

Sorry - realise these arent the answers you are looking for. It really does all depend on the AST terms though, so I would advise to scan a copy of the AST in and post a link(with relevant details obscured) so we can have a read. Edited August 21, 2008 by MrShed

[Planner]

You cant have more than 4 people named on an AST. So if there are 6 people listed on it, only the first will be liable for the rent shortfall (of course ou can come to an agreement between yourselves to share it). What this means is that the landlord can only legally come after the first four people for the rent shortfall.

 

Unfortunatley it is due.

[MrShed]

You cant have more than 4 people named on an AST.

 

Eh??? Since when?

[Planner]

Eh??? Since when?

 

The Dawn of Time possibly, or more helpfully 1925.

 

- s.34(4) of Trustee Act 1925.

[MrShed]

The Dawn of Time possibly

 

Haha!!

[MrShed]

I'm fairly sure that doesnt apply to ASTs mate - all I can find is that it applies to "tenants in common". Any case law on it that you know of?

[BADGER 69]

I'm fairly sure that doesnt apply to ASTs mate - all I can find is that it applies to "tenants in common". Any case law on it that you know of?

 

I think you're right Mr Shed. The 1925 act is for "legal ownership" and there can only be four names on that. They must be of legal age, and they are joint tenants. There can be more than four names as to "beneficial ownership. They do not have to be of legal age and they can be either joint tenants or tenants in common. With an AST it does not apply as the AST has nothing to do with ownership.

Having said that the five tenants who took up their tenancy should look to the tenant who did not take up his tenancy to pay his share of the rent as it was incumbent on him to find a replacement for himself as he had signed the agreement.

[Planner]

Okay. You have been warned!

[MrShed]

Again....eh?

[Matt_D]

Thank you for your replies.

 

I will scan in the AST when I get access to a scanner.

 

In the meantime, is there any legal basis on which we can make the sixth tenant who did not take up his tenancy pay?

[Planner]

Thank you for your replies.

 

I will scan in the AST when I get access to a scanner.

 

In the meantime, is there any legal basis on which we can make the sixth tenant who did not take up his tenancy pay?

 

If im right, then no (assuming they are the 5th or 6th person listed on the AST).

 

If Mr Sheds right, then you will pay the landlord and then take this person to small claims court. Remeber the landlord doesnt have to come at each of you for a share, he could pick on one person and require the full amount from them.

[Matt_D]

OK. The sixth tenant, although they were named on the AST as a tenant, did not sign the agreement. Can we still attempt to recover the amount from them?

[Planner]

As they are the sixth person, in my view no. In Mr Sheds view yes.

 

BUT, applicable to both views is the fact that they didnt sign the AST. How are you going to prove that they are bound by it when;

 

a) they didnt sign it;

 

b) they never moved into the property ( I assume)

 

c) they never contributed towards the deposit (I assume)

 

Its not looking good.

[BADGER 69]

OK. The sixth tenant, although they were named on the AST as a tenant, did not sign the agreement. Can we still attempt to recover the amount from them?

 

As the sixth person did not sign the AST you have nothing to hold him to. It seams to me that the fairest thing you can do is to split the 1/6th rent between the other 5. That is, those who took up the tenancy. Also as he did not sign it was not up to him, as I said earlier, to find a replacement.

[MrShed]

Agree with you planner. BTW I dont think ANY of these questions can be answered without seeing the AST.

 

However, it is patently obvious that the 6th tenant cannot under any circumstances be held liable.

[Dotty50]

Remeber the landlord doesnt have to come at each of you for a share, he could pick on one person and require the full amount from them.

 

I know this is a REALLY OLD thread, but have a similarish situation and was reading about 'joint and several' liability and was going to start a thread to ask about it.

 

5 months into a 12month AST signed by 5 tenants, 1 moved out, without notice and is refusing to pay their share of the outstanding rent. The landlord is prepared to sue but states that it has to be done on a group basis.

 

I believe, as planner states here that the landlord could sue the single party that hasn't paid, although I realise if he didn't get anywhere, the rest would be liable, so I am looking for confirmation from the experts please.

 

There are also individual guarantees for each tenant.

 

TIA !