Deposit In A Shared Tenancy When One Tenant Leaves

KarenT1978

Hello,

I have a flat with a couple of tenants. One of the tenants is leaving. The terms of the lease state clearly that the deposit fee is £400. The lease also contains the statement.

[FONT=Helvetica, sans-serif]Where there are two or more persons included in the expression "the Tenant", the obligations and conditions incumbent upon the Tenant, including payment of the Rent, shall be held to bind all such persons jointly and severally.[/FONT]




[FONT=Helvetica, sans-serif]My tenant who is leaving is looking to get their half of the deposit back which is fair enough. Would I be correct in thinking that should the other tenant wish to continue staying on in the flat then under the statement from the lease above I would be entitled to ask them to meet the full £400 deposit fee from their own funds rather than the half of the fee they have paid up until now.[/FONT]


[FONT=Helvetica, sans-serif]Thanks in advance
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[FONT=Helvetica, sans-serif]
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[FONT=Helvetica, sans-serif]KarenT
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pmlindyloo

KarenT1978 wrote: »

Hello,

I have a flat with a couple of tenants. One of the tenants is leaving. The terms of the lease state clearly that the deposit fee is £400. The lease also contains the statement.

[FONT=Helvetica, sans-serif]Where there are two or more persons included in the expression "the Tenant", the obligations and conditions incumbent upon the Tenant, including payment of the Rent, shall be held to bind all such persons jointly and severally.[/FONT]




[FONT=Helvetica, sans-serif]My tenant who is leaving is looking to get their half of the deposit back which is fair enough. Would I be correct in thinking that should the other tenant wish to continue staying on in the flat then under the statement from the lease above I would be entitled to ask them to meet the full £400 deposit fee from their own funds rather than the half of the fee they have paid up until now.[/FONT]


[FONT=Helvetica, sans-serif]Thanks in advance
[/FONT]
[FONT=Helvetica, sans-serif]
[/FONT]
[FONT=Helvetica, sans-serif]KarenT
[/FONT]

From what you have said I am presuming this is a joint tenancy and one deposit of £400 was taken when they signed the tenancy?
(doesn't really matter about who paid what)

So now one of the tenants is leaving.

What you do next depends on whether the remaining tenant stays or not.

So, if the remaining tenant stays then you should return the deposit (if there are no deductions) and let them split it up however.

Then you should create a new tenancy agreement with the remaining tenant (and other new tenant if applicable) and take a new deposit from the new tenant(s) and protect it.

Many landlords do not bother to do this and consequently things can become 'awkward'.

It is important that you do a 'check out' for the tenant leaving so that the remaining tenant(s) do not feel aggrieved later on when they leave and you need to make deductions from the deposit- 'that was so and so who did that'.

I am presuming that the outgoing tenant has discussed everything with the remaining tenant?

And just to check that there are no further complications - is this a fixed term tenancy/periodic tenancy?

A link to read:

http://england.shelter.org.uk/get_advice/private_renting/private_renting_agreements/joint_tenancies

G_M

If one of two joint tenants leave you have two options:

1)
* End the tenancy via an Early Surrender
* check the property and inventory as per normal
* decide whether any deductions are required for damage etc
* return the full tenancy deposit (up to the 2 tenants how they divide it)
* create a new tenancy either
a) in the name of the remaining sole tenant assuming you are happy to have just 1 tenant to chase for rent, or
b) in the name of the remaining tenant + a new joint tenant who you've checked/approved
* complete a new inventory and get signed by new tenants
* take and register a new deposit (and comply with the new post Oct 2015 rules)

2)
* Continue the existing tenancy
* Execute a Deed of Assgnment, removing the departing tenant's name (and substituting a new name if a new joint tenant is moving in following your checks/approval)
* make sure Deed is signed by LL, all current tenants, any new tenant(s), and all signatures are witnessed
* Keep the existing deposit (in full) since the tenancy has not ended. (any arrangement regarding deposit payment by new tenant to old tenant is none of your business)
* no check out inspection is needed as the tenancy has not ended. The remaining tenant (and any new joint tenant) will be fully liable for damage when the tenancy finally ends, whether that damage ocurred before or after the leaving tenant departed)

KarenT1978

Thanks for the excellent replies pmlindyloo and G_M

I am based in Scotland. The deposit is currently held by a third party government run scheme which I believe is legally required here in Scotland.

pmlindyloo, Being based in Scotland I am not sure how much of the link you posted applies to my circumstances I am however very grateful for the advice anyway.

pmlindyloo

KarenT1978 wrote: »

Thanks for the excellent replies pmlindyloo and G_M

I am based in Scotland. The deposit is currently held by a third party government run scheme which I believe is legally required here in Scotland.

pmlindyloo, Being based in Scotland I am not sure how much of the link you posted applies to my circumstances I am however very grateful for the advice anyway.

So here the link for Scotland>

http://scotland.shelter.org.uk/get_advice/advice_topics/families_and_households/sharing_rented_accommodation/joint_tenancies

You can always give Shelter a ring to ask any questions.

G_M

My own post was based on my understanding of tenancy law in Eng/Wales.

I am not familar with Scottish tenancy law.