We had a member who asked, "In a student HMO I always have individual contracts for each tenant but from a Council Tax perspective, I am better off using a Joint & Several contract (as if & when CT falls due, the local council will bill the landlord if on individual contracts but will not if the tenants are on a 'Joint & Several' AST - dumb distinction I know).
If I switched to Joint & Several ASTs but still collect the rent individually from each tenant, does that negate the J&S contract / would it be seen as such if it ever came to court / is there some other consideration I should be aware of?"
All PDPLA members are automatically members of the RLA and RLA members in the area are PDPLA members, even though both organisations are completely separate. So we thought we would take advantage of the excellent RLA helpline and forum and posted the question on the forum (though we could have called the helpline and got a response from the RLA rather than its members).
We had a range of responses and a discussion as this is a difficult topic and everyone has a view.
One respondent said, "If the council finds out about your method of collection, they can challenge it as being a deceptive practice; thereby being counter-productive. You will also be in danger of tacitly creating individual tenancies without the due process. This will put you in a bigger hole than that of the council tax."
Another came back with, "I think most joint tenants still pay their rent individually. Even my couple lets do that. I used to let my student house on a joint tenancy basis for the reason you mention, amongst other things, such as care of common parts. I avoided the lead tenant nonsense though and registered their deposits individually with DPS. Be aware that if you decide to do this the tenants might complain that they dont want to be responsible for other student's rent. You then get into fudging territory"
And one of our committee members jumped in with his view, "I think it is a little more complex than that. At first blush, what does the tenancy agreement say? How was it signed (were all of the tenants aware of the identity of all of the other tenants known to each other at the time of signing)? The method of collection is a factor, but not in and of itself exclusive proof. A similar example would be perhaps a husband and wife, in a shared house, one working and paying top up, the other claiming benefits and paying the landlord directly. There would be little suggestion that this would be a joint tenancy. At the other end of the scale, a tenancy where they were all of the same agreement, but coming & going on different dates, with previous tenants crossed about, a bit like triggers broom, in a HMO with locks on the door of each room and a cleaner in communal areas would suggest separate tenancies. Not sure it answers anything but helps show how difficult this whole area is."
Fortunately we have members and friends who are also legal professionals and we leave John Saulet of Saulet Townshend with the definitive and final word on this one: "What you say must be a misunderstanding, as it is not and never has been correct. Where a property is let to two or more people, the rent can be paid by each of or by some of or by just one tenant. If the tenancy agreement states that liability is joint or is joint and several, then that is what it will be, regardless of how the rent is paid or by which tenant. The problem may arise where the tenancy is in one name, but the rent is paid by someone different from the tenant (for example a personal tenancy where the rent is paid by a company). The landlord has to be sure that in accepting rent from the company, that he confirms with the tenant that the tenant remains personally liable and that the tenancy does to transfer to the company"
So what do we learn? As PDPLA members there is a wealth of help out there freely available and we recommend that all of our members make full use of the RLA forums and their excellent helplines - but for the important stuff, you can't beat proper legal advice.
Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.