I had a great day on Thursday at the Landlord & Letting Show. I met all sorts of people there and it was great to catch up with some people I had not seen for a while.
I also did two talks.
A nice lady has a novel approach with vacating tenants
In one of my talks I talked a bit about how problematic it can be when one of joint tenants wants to leave, and how that is why renting individual rooms in a shared house is better if tenants are going to want to vacate at different times.
After the talk a lady came up to speak to me (one of many, I’m generally a bit swamped after a talk).
“Why” she asked me “didn’t you mention assignment?”. “Because” I replied “I think it is better that a new tenancy is signed, as it seems seems to be to be a much cleaner and neater way of doing it” (or words to that effect). “No” she said “I mean assignment of the individual tenants share of the tenancy. We do it all the time”.
I asked her if she had had any legal advice on this procedure and she seemed a bit vague about it. I did not have time to say much else to her, other than I would raise it on the blog.
Does anyone else do this?
The trouble I suppose with all of these things, is that they work well enough when everyone is happy and agreeable, but can throw up problems if anything goes wrong.
My understanding with joint tenancies is that, so far as the landlord is concerned, his tenants are treated (legally) as one. They may be individual human beings, but so far as the relationship of landlord and tenant is concerned, they are collectively ‘the tenant’. I have heard of groups of tenants (ie all of them) assigning their interest to another tenant or group, but I have never heard of one of them doing this while the others remain in occupation.
So lets take an example. Say there are four tenants, Alison, Barbara, Clare and Donna. Donna, being ‘difficult’ is always having arguments with the others and finally says she wants to leave. She manages to persuade Edith to take her place.
Now my standard advice would be that
- Either a new tenancy agreement should be signed with Alison, Barbara, Clare and Edith and the landlord (who will no doubt make a charge for referencing etc).
- Or the girls should ask for permission to take in Edith as a lodger until the fixed term ends, with a view to signing her up formally as a tenant when the tenancy is renewed at the end of the term.
These are all nice clean and clear situations where everyone knows where they are.
What happens though if Donna assigns her interest (or signs a document to that effect) in the tenancy to Edith? Assuming of course that the landlord agrees to this.
Thoughts and speculation
First of all, is this actually legally possible? I don’t think it can change the legal ownership of the tenancy, as this will remain with the signatories on the tenancy agreement. All Donna will be assigning is her beneficial interest (see here in the Foundations series for an explanation of this) to Edith.
This may (perhaps) entitle Edith to live in the property, but I am not entirely sure how the rest of it will work out. Will the landlord have a direct right to name her in court proceedings, for example for eviction and/or a claim for a CCJ for rent arrears? Will she be bound by all the terms of the tenancy agreement, or just those ‘touching and concerning the land’.
Or would the actual fact of the situation (assuming the other tenants let her move in) somehow impledly change the terms of the tenancy itself? Surely not.
My nice lady said that they did it ‘all the time’. What would happen then if ALL the legal tenants had assigned their beneficial interest to others, and no-one actually named on the tenancy agreement was living in the property?
For example if the landlord wanted to issue possession proceedings, what would he do about serving proceedings on the defendants (who would presumably be the tenants named on the tenancy), if none of them were there and he had no idea where they were living?
I would be very interested to hear from any lawyers who have any views on this situation.
A shadowy memory of a past case
I can dimly remember a nightmare case from when I was an assistant solicitor which nearly went to the Court of Appeal (the only time I have ever been anywhere near it) on what I think was a similar point.
From what I can recall, it involved a lady who, after a bust up with her husband, paid £15,000 for someone’e beneficial interest in a local property let out on a long lease. The other occupiers promptly excluded her and refused her entry, and we had a long drawn out case about it, on legal aid, which only the barrister (and in my more intelligent moments, myself) really understood. Certainly it was way over the heads of the clients, who were not the brightest.
The case dragged on for several years, and I think it was eventually settled. It is not a happy memory. I would not want my nice lady to be involved in anything similar.