Here is a blog clinic question from Andrew (not his real name) who is a tenant:
I was a tenant with my partner, she was the lead tenant but I paid the rent,c.t, bills, deposit etc (you can see why we split!) We vacated the flat early and broke the tenancy agreement due to her attitude.
It transpires that she released my deposit from the DPS without my consent and told the landlord to keep it against his claim for unpaid future rent.
I am now being chased through county court to pay my share of unpaid future rent and the fact that it was my money she used to pay her share seems unjust.
Is it lawful that a deposit held by the DPS can be used to pay a future rent claim?
This money was mine not my partners, if it is lawful/unlawful what is the act?
This question just illustrates how important it is to be careful about who you share with and maybe, not trust them too much.
Lead tenants
The whole point of having a lead tenant is that this is a person who the landlord and the tenancy deposit company are authorised to deal with for all matters relating to the deposit.
If you were the one paying the rent, it would have perhaps been more sensible to have been the lead tenant yourself. Then you would have been the one giving the instructions to the DPS regarding what to do with the deposit money.
The use of lead tenants is not set out, so far as I am aware, in statute but in the DPS terms and conditions which you can see online here. As I discuss here, not all our law is found in statute.
Future rent
As regards future rent, your landlord cannot sue you now for rent which has not yet fallen due (and if he has you should be able to put in a defence).
However if you, say, signed up for a year and left, say, after month nine, then you will BE liable for that rent on a month by month basis – unless the landlord has re-let the property, when your liability under the tenancy agreement will cease (as it will have been replaced by the new tenancy agreement between the landlord and the new tenants.
So if then you left at the end of month nine, and your former partner authorised the deposit money to be released to the landlord in respect of month ten, that sounds legitimate to me. If that months rent had not actually fallen due yet at the time, it is not perhaps something a court of law could order, but it is something that can be paid by agreement.
If the landlord did not re-let the property he would in due course, have been entitled to the rent for months eleven and twelve, when those months came around. And be entitled to sue for those months rent and any earlier rent not paid at that time.
Joint and several liability
As regards who he sues for the money – when two people sign a tenancy agreement together they have what lawyers call ‘joint and several liability’. This means that so far as the landlord is concerned he is entitled to receive the whole of the rent from both or either of you – it does not matter who actually pays it so long as he gets it.
So if tenants make a private arrangement between themselves to pay half of the rent each, that arrangement is not binding on the landlord – he is just entitled to get his rent from ‘the tenant’ which means both or either of you. So he can sue both or either of you – his choice.
This is why it is so very important that tenants ONLY ever sign a joint tenancy with someone they trust. As you are potentially making yourself liable for the other tenants share of the rent. Again, this is not specifically set out in an act of Parliament, it is part of the general common law.
There is nothing to stop you suing your former partner for reimbursement of her share of the rent which you have paid on her behalf (if it was agreed between you that she would pay this).
Couldn’t agree more with Tessa here. Lead Tenant certainly has no legal standing and is a status dreamt up first by DPS and now being increasingly copied by the other two TDP schemes, especially My|deposits.
Really the deposit never could be used for rent, though Landlords did sometimes ask pre TDP, and agents did so, pursued the arrears and if paid made the deposit back up. The clauses in the agreement should provide for the deposit to be used to pay rent if the landlord so wished, but it was very much a last resort.
Post TDP you are much more restricted.
If the deposit is used in an insured scheme and then there is a dispute the disputed amount has to be paid into the scheme – so where does that money come from if already paid to the Landlord? From the hard up Landlord? So agents beware.
Under DPS you have no chance as you don’t even hold the money so how are you going to persuade DPS to release it even if all parties agree as they can only deal with deposit distribution at the end of the tenancy.
In this case it is end of tenancy and if the other tenant was lead tenant and has got her mitts on the deposit and used it to pay rent then at least it saves you finding your half for that month, as Tessa in effect is saying.
Tessa’s advice on joint and several commitments is very sound too – I have always thought these rent share jobs with complete strangers very risky. Buyiong with a complete stranger means you are certifiable!!
This type of situation can be avoided as DPS recommend that joint tenants’ deposit shares are protected separately (clause 8 current version of their terms and conditions) – though Kevin Firth, DPS’s director, didn’t seem aware of this in Tessa’s January 2011 podcast. The notion of a lead tenant is not compatible with joint and several liability but unfortunately the term is appearing in more and more tenancy agreements. I don’t think TDS require a lead tenant, although apparently Mydeposit does.