Joint and Severally Liable Tenancies: a Guide for Landlords, Tenants and Guarantors

This guide to the legal concept of joint and severally liable tenancies was written by Clara Zang and Salmaan Hassanally, practising barristers at 4-5 Gray’s Inn Square Chambers.

What Is a Joint Tenancy?

It is common for landlords to grant joint tenancies to their tenants. A joint tenancy will arise where, for example, an assured shorthold tenancy (AST) is granted to two or more persons and each person’s name is included in the tenancy agreement as the lessee. Each named tenant must also sign the agreement; it is not enough to name two people as tenants but for only one of them to sign the agreement. 

For a joint tenancy to exist, the four unities must be present: unity of time, possession, interest and title. In the context of ASTs, this means that all tenants must have entered the same tenancy agreement, were granted the same interest in the same property at the same time, they each have an equal right to occupy the entire property, and they are subject to the same rights and obligations under the agreement. Note also that, in law, you can only have up to four joint tenants. If more than four people are named as joint tenants in the agreement, only the first four will hold a legal title in the property (and the rest will hold an equitable interest only).

The Difference Between Joint and Several Liability

Joint Liability

Joint liability will arise when two or more tenants (T1 and T2), make a joint promise to another (the landlord (L)), to do the same thing. Accordingly, there is only one promise. For example, if T1 and T2 jointly promise to pay £100 to L, whilst both are equally liable for ensuring that L receives the full £100, the promise can be fulfilled by either T1 or T2 paying the £100. Since joint liability gives rise to a single promise, historically, legal proceedings had to be brought against all the promisors in the event of default, each of whom would be a defendant to the same proceedings. However, this is no longer the case and L can choose to issue legal proceedings against either T1 or T2, or both. 

Several Liability

Several liability arises when two or more persons make separate promises to another. There are therefore two or more promises. For example, if T1 and T2 severally promise to pay £50 to L, there exists one promise between T1 and L, and another between T2 and L. T1 and T2 are responsible for paying £50, each, to L. If T1 pays £100 to L, this simply results in an overpayment and does not satisfy T2’s promise. If neither T1 nor T2 pay the full £50, L will have to bring separate legal proceedings against each of them.

Joint and Several Liability

Joint and several liability is a mix of the above. It arises when two or more persons make a joint promise to do something, but each is also separately responsible for fulfilling that promise in its entirety. For example, if T1 and T2 jointly and severally promise to pay £100 to L, whilst both are equally liable for ensuring that L receives the full £100, the promise is fulfilled by either T1 or T2 paying the £100. In the event that L does not receive the full £100, he can commence legal proceedings against T1 and/or T2.

Recovery of Rent Arrears in Joint Tenancies

In most joint tenancies, the tenants will be jointly and severally liable for paying the rent, subject to any express provisions to the contrary in the agreement. For example, L grants a joint tenancy to T1 and T2 at a rent of £1,000 per month. T1 and T2 agree with each other that they will pay £500 each to L. T1 pays his share but T2 does not because he recently lost his job. T1 and T2 are jointly and severally liable to pay the whole amount of the rent i.e. £1,000. Therefore, despite the fact that it is T2 who has failed to pay his share of the £500, L can choose to pursue the outstanding rent arrears from T1 only, as T2 does not have a source of income or any assets. 

Broadly speaking, a landlord can only pursue rent arrears against tenants who are named in the tenancy agreement. Therefore, any residents who are not tenants (e.g. friends or family members) will not be held liable for the actions or inactions of the named tenants, and the landlord will not be entitled to recover the unpaid rent from the non-party residents. 

Some AST agreements require tenants to have a guarantor. This is most commonly seen where the named tenant is of limited financial means, such as a student or those who are not in employment. In such cases, if the tenant fails to pay the rent, the landlord would be entitled to issue proceedings against the guarantor to recover the rent arrears. 

Practical Implications for Court Proceedings

The landlord can choose to issue legal proceedings against one tenant, all tenants, and/or the guarantor. It is not uncommon for landlords to commence legal proceedings against the non-defaulting tenant or the guarantor only, e.g. because the defaulting tenant has no money, has vacated the property without providing a forwarding address, or has moved abroad. The landlord would want to keep the case as simple as possible, in order to avoid protracted court proceedings and high legal costs. It may also be the case that a guarantor is more likely to simply pay the outstanding rent rather than be dragged through legal proceedings and risk being subject to a court order and legal costs. Note, however, that the landlord is not entitled to double recovery, and if seeking possession of the property, they must include all joint tenants as defendants to the proceedings.

If the landlord chooses to issue proceedings against one defendant only, the sole defendant can make an application to the court to join the other tenants and/or the guarantor as a party to the proceedings rather than bearing the stress of court proceedings and potential liability alone. However, this may also lead to protracted legal proceedings, “cut-throat” defences (in which the other defendant pins all the blame on the original defendant), and increased liability for legal costs, including the landlord’s costs, if the tenants are unsuccessful.

Alternatively, the sole defendant can wait until the conclusion of the proceedings and attempt to recover monies from the other persons if an order is made in favour of the landlord. If reimbursement is not forthcoming from the other persons, the sole defendant can commence separate court proceedings against the others for a contribution. Such proceedings must be initiated within two years of the date of the judgment in the initial claim (i.e. the court order requiring the tenant to pay the landlord) or of the date of any agreement made by the tenant to pay the landlord.

Miscellaneous Provisions Concerning Joint and Several Liability

In some situations, the law determines whether liability is to be joint and several. Two that commonly arise in the property context are in relation to council tax and divorce. In respect of council tax, a resident spouse is jointly and severally liable even if s/he is not named on the tenancy agreement or title deed. As to divorce, when a court orders a tenancy to be vested in the non-tenant spouse, it may also direct that both spouses are to be jointly and severally liable for any obligations, whether pre-existing or not.

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Notes:

• Section 34 of the Law of Property Act 1925.
• Chitty on Contracts, 33^rd Ed, paragraph 17-009.
• Section 81(1) and (3) of the Law of Property Act 1925.
• Section 1(1) of the Civil Liability (Contribution) Act 1978.
• Sections 10(1, 3, 4) of the Limitation Act 1980.
• Section 9 of the Local Government Finance Act 1992.
• Schedule 7 to the Family Law Act 1996.

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Clara Zang and Salmaan Hassanally are barristers at 4-5 Gray’s Inn Square Chambers. They accept instructions from landlords and tenants in all areas of commercial and residential property, including possession proceedings, rent arrears, tenancy deposits, disrepair, and freehold and leasehold disputes.

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