Can a joint tenant drop out?
29th January 2018
This week’s Ask the Expert in Times Bricks and Mortar is about joint tenancies. The reader rented a flat tenancy with two other flatmates, who moved out earlier this year. She found replacements, but the landlord wants to charge £300 for each name change. There’s no mention of this charge in the tenancy agreement. Can he do this?
The answer involves the legal distinction between two kinds of tenancy.
Historically, where more than one person owned land, they did so either in common or jointly. Common ownership means each individual holds a separate share of the property and has the right to transfer ownership of that share to someone else. Joint ownership is where two or more people each have an equal and indivisible right to keep or dispose of the whole of the property together. That is why joint tenants must always act together. If one of them wishes to drop out, the tenancy ends.
Although co-ownership remains important in other areas of property law, ownership in common is largely academic for tenancy agreements and leases. Under section 34 of the Law of Property Act 1925, it is no longer possible for a lease or tenancy agreement to be granted to tenants in common. A tenancy granted to more than one person is now always held as a joint tenancy, i.e. each tenant has an equal and indivisible right to the property and they must act together. Importantly, each tenant is liable for the whole rent until the end of the fixed period of the tenancy. They are jointly and severally liable for the rent. The result of this is that if one of the tenants does not pay their rent (which they would be liable to do until the end of the fixed term even if they have moved out) the landlord would be entitled to pursue the other tenant(s) for the full rent, although the person who pays is entitled to a contribution from the others. Another consequence of being joint tenants is that during the fixed period of the tenancy, a tenant cannot simply transfer their ‘share’ to someone else, even if the tenancy agreement permitted this. New tenants require a new tenancy agreement and a landlord is under no obligation to grant them one.
It follows that a change of “name” is therefore actually a new tenancy agreement. The old tenancy is surrendered by operation of law when it is replaced by a new letting to different tenants. It is not simply a case of crossing one name out and writing in another.
There is also the question of the deposit. Strictly speaking, the property will need to have a new inventory done as it is unfair to expect the incoming tenant to pay for any damage done before they moved in. The inventory will then have to be checked with all the tenants and any adjustments to the deposit dealt with. The landlord will probably not require a new inventory etc., but the relevant deposit scheme will need to be told and the names changed. It is therefore not a straightforward case of substituting new tenants.
However, since the landlord does not have to agree to a surrender during the fixed term of the tenancy, he can charge a fee for his ‘consent’ to the change of name.