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.
An example
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.
Gary Webber in his Understanding Possession Proceedings Book (8th Edition para 3.027) refers to changing a tenant being a surrender and regrant and quotes London Borough of Tower Hamlets v Ayinde (1994)26 HLR 631 CA.
On the comment above about one tenant many individuals, I would presume you would have a “different” group of individuals after the assignment and therefore a different tenant. This being the case, the new tenancy bring s a number of interesting questions about deposit protection, new minimum right of occupancy etc.
Thanks for your comment David.
I have had a quick look on the internet for the case and found this link http://www.swarb.co.uk/lisc/Housn19941994.php. From this it looks as if this was a situation where all of the tenants changed not just one of them.
So far as the minimum right of occupancy is concerned, I would assume this would be six months from the time the new tenant took over, IF she was one of the legal tenants. Not at all sure how it works out though if she only has a beneficial interest.
I don’t think assignment of part of a joint tenancy can be done. Not least, there is the general prohibition on assignment in Housing Act 1988.
Two options in law – either the Departee has ended their tenancy and in doing so ended the joint tenancy in toto, in which case the position is a new tenancy with the incomer and a fresh 6 month term; or, if the Departee has not ended his/her tenancy, they are no longer fulfilling the primary residence requirement of an AST and as a result the whole tenancy (including the others) becomes a purely contractual tenancy, determinable at any time by NTQ. But the landlord would have to include the Departee as a tenant in any legal remedy.
I can’t see any way at all in which a joint AST (fixed term or statutory periodic) could continue by assignment of one of the joint tenancies. As such, the beneficial interest question is kind of by the by – at best a beneficial interest in a contractual tenancy.
Thanks NL, thats very helpful. But a few things bother me.
So far as the residence point is concerned, are you saying that if ANY of the joint tenants are not residing at the property, then the residence requirement of an AST is not fulfilled and the tenancy becomes non regulated/a common law tenancy?
Or is this just in as a result of the assignment of one of the beneficial interests?
Because you often get one of joint tenants moving out. It would be a serious matter if all those tenancies were really common law ones. For a start, the landlord might not know that they had moved out and would use the wrong eviction procedure by mistake.
So far as the prohibition on assignment in s15HA1988 – this says ‘except with the consent of the landlord’. But I rather gathered from my nice lady, that she was the landlord and that the DID consent to it. Frequently apparently. (My blood did run a little cold, I must say, when she said that).
Just goes to show though that this is something which REALLY ought to be avoided by landlords …
NO, you are right. I was thinking on the hoof – presence of any of the joint tenants is enough for the only or principal home rule. HA 1988 1(1)(b)
But now the whole thing gets interesting. HA 1988 15(1)says that T shall not without L’s consent:
(a) assign the tenancy (in whole or in part); or
(b)sub-let or part with possession of the whole or any part of the dwelling-house let on the tenancy.
So (a) appears to encompass ‘part’ assignment (with consent). I’m still struggling to see how there could be a ‘part’ assignment of a joint tenancy. I would read (a) as meaning assignment of a tenancy of part of the demise, given that a joint tenancy is incapable of separation into parts. But hmm.
But the risk – where there is a purported assignment – is that it is actually a sub-let of part, without consent. So breach of 15(1)(b) – and loss of assured status.
So, if we start from the point that one cannot assign part of an indivisible joint tenancy, the results in order of likelihood would be:
1. Departee has determined whole tenancy (and purported assignment might well function as notice). Thus L is actually granting new tenancy, with all that that implies. (Could also be considered as surrender and re-grant.)
2. Departee has not given effective notice or surrender, but has sub-let part without consent. This would end assured status – surely for all joint tenants – by operation of law, leaving a contractual tenancy, with newcomer as departee’s sub-tenant.
3. Incomer has beneficial interest in joint tenancy (not a share of it), but Departee retains legal interest and remains joint tenant at law. Departee remains liable for rent etc. etc.. Hard to see how this isn’t parting with possession of part, though.
Interesting question, but I can’t see how one could assign part of an indivisible tenancy.