Tenancy Agreement Advice

toby_puppy

We are about to rent out our flat to 3 girls and need to get a tenancy agreement drawn up - it's asking if they should be classed as jointly and severally responsible or independent tenants? what is the best option? could anyone give an example of a scenrario under both options, ie. if one of the girls walked out and the other two couldn't afford the rent, what would our rights be under either of these terms?
thanks.

gemini24

No question - it must be jointly and severally liable. If you go for independent tenants, they will only have to pay for their own part of their rent if A N Other/s clear off! Under an assured shorthold tenancy, its the norm for it to be jointly and severally liable. If the full rent is not met under the usual terms of an AST you can gain possession. Please FORGET the independent tenant route unless someone can add something I don't know about tenant law.

barnaby-bear

jostenning wrote: »

We are about to rent out our flat to 3 girls and need to get a tenancy agreement drawn up - it's asking if they should be classed as jointly and severally responsible or independent tenants? what is the best option? could anyone give an example of a scenrario under both options, ie. if one of the girls walked out and the other two couldn't afford the rent, what would our rights be under either of these terms?
thanks.

3 unrelated girls will be an HMO, so you will have to adhere to HMO regulations / paperwork / fire safety etc....

RainMaker_2

barnaby-bear wrote: »

3 unrelated girls will be an HMO, so you will have to adhere to HMO regulations / paperwork / fire safety etc....

Certainly if they had separate Tenancy agreements. But what if they were all on the same agreement, jointly and severally liable ?

clutton_2

"Unrelated" is the key here - you can house as many related folks as you like, on as many agreements as you like - they will all look out for each other after a fire

if they are unrelated then i agree 3 folks will make a HMO - but if it is a 2 storey house the regs are not as onerous as if it is 3 storey - but you will have to register the property with the local authority in any case - a fee will be payable

up to £50k fines for non compliance - and yes it has already happened

Premier_2

Contact your coucil for advice.

There are two types of HMO licensing: mandatory licensing and additional licensing.

Licensing is mandatory for all HMOs which have three or more storeys and are occupied by five or more persons forming two or more households. (so contact them to find out what their policy is on additional licensing)

Additional licensing is when a council can impose a licence on other categories of HMOs in its area which are not subject to mandatory licensing.

If you are prosecuted by the council for not holding a licence and you are convicted of the offence you could face a fine of up to £20,000 plus costs.

All this information and more can be found in this official document:
http://www.communities.gov.uk/documents/housing/pdf/322460.pdf

In response to the question raised in the OP, if you put all tenants on the one TA and make them all jointly & severally liable, it will simplfy matters for you. e.g. If one decides to move out, you can hold the other two responsible for the full rent due.
If you have separate TAs for each tenant, then 2 could move out leaving 1 in the property paying 1/3 of the original total rent. If you then find 2 replacements to move in, they will have different start dates to their TA so will have a fixed term extending longer than the original which could cause problems if you wish to evict them. What's more, if 1 tenant didn't pay their rent and you successfully evicted that tenant, you couldn't evict the other 2 on that ground that were abiding by the terms of their TA, so reducing your rental income.

tbs624

Just following the slight diversion from the OP's query, after BBear's post .....

clutton wrote: »

.......if they are unrelated then i agree 3 folks will make a HMO - but if it is a 2 storey house the regs are not as onerous as if it is 3 storey - but you will have to register the property with the local authority in any case - a fee will be payable ...

The Housing Act sets out three types of HMO license - mandatory, additional & selective (usually for a specific area ) - not all councils seek registration for anything other than those that would qualify under the mandatory category (ie 3 storeys, 5 unrelated occs).

clutton wrote: »

.....up to £50k fines for non compliance - and yes it has already happened

The max fine for failing to license an HMO is £20K but the LL can also be slapped with a rent repayment order plus costs. Where the papers have reported higher fines, it's usually that the LL has also failed to meet other legal requirements relating to the management of their HMO.

clutton_2

you are quite right about the max fine being £20k - i was thinking about something else when posting

re registering a HMO - i can only recommend talking to the local council, as, whilst the 2004 Act appeared to be scrupulously clear, local authorities all over the country have been interpreting the HMO regs in their own inimitable fashions

DireEmblem

Interesting thread,

Looking into moving into a flat with a total of 3 unrelated people, and the landlord has omitted the third person from the lease. On initial queries after viewing we were ensured that it wasnt a problem and would get sorted out?

Should we speak to the council if we go for this flat?

tbs624

All Tenants should be listed on the tenancy agreement for their own security and yes, if you have any concerns, check the property out via the local council's private sector rentals team ( or HMO enforcement team) before you sign up or pay any money over.

The Council website should show what level of licensing applies in your area and you should be able to access the register of mandatory licensed HMOs at least. Some Councils such as Southampton do intend to make use of the rules under additional licensing.

There have been some cases where it was found that the LL had deliberately put fewer names on the agreement than there were actual tenants as part of an HMO license-evasion plan, but in your case could it perhaps have been a genuine error?