Landlord refusing to offer a sole tenancy

Tenant Discussion
1

Hi

I’ll try and keep this brief and appreciate any advice.

A relative has put down a deposit for a flat via Openrent with two other parties. I have been asked to be a guarantor for my relative. Reading the ‘What is a guarantor’ information at https://help.openrent.co.uk/hc/en-gb/articles/115000710431, linked in the ‘You have been requested to be a guarantor’ email that I received, it looks like the flat is being offered under a joint tenancy agreement.

After reading that under a joint tenancy I could potentially be liable for paying the rent of the two other parties in the flat, I raised this issue with the landlord and was told (verbatim):

All tenants and all guarantors are jointly and severally liable at law on a rental contract. That is UK law. It is the same throughout the UK and will be the case wherever you go whatever contract is used.

There is no getting around it

And so after two minutes on the Citizens advice website I requested that the flat be offered with individual sole tenancies for each of the three occupants, thereby protecting them and their guarantors (I believe at least two out of the three tenants have guarantors). He refused and said:

…am unable to comply with your suggestion because Openrent have their own platform and cannot do three separate contracts and my mortgage company will not allow it.

…as said the Openrent contract, as indeed any joint contract in the UK, makes all parties jointly and severally liable. I nor anyone else can change that.

My limited experience with Openrent suggests that this is simply incorrect. In fact one of the example ASTs on the site is specifically for shared accommodation: https://d10hbub4nkludc.cloudfront.net/content/contractsamples/v4/OpenRent%20Sample%20AST%20-%20Room%20in%20House%20or%20Flat%20Share%20-%20With%20Guarantor.pdf

My gut feeling here is that the landlord wants all of the upsides of being a landlord but none of the potential downsides. He doesn’t want the additional administration of dealing with three individual tenancy agreements. I also believe that his flat is not registered as an HMO as I have looked at the local authority’s rules on this and then on the register and it is not listed.

My relative has already paid a holding deposit and I worry that she will struggle to get it back should this deal fall through.

My main concern about the whole situation is of course being potentially liable for the rent of the other two occupants.

Any advice greatly appreciated.

2

You are right that it is possible to have liabilty split so tenant and their guarantor are only liable for their shares, however this arrangement is not good for a landlord as there is more risk and work.

Ultimately landlords will want to rent to tenants that are lower risk so given demand exceeds supply in most areas they will choose to proceed with tenants happy to be jointly liable for whole rent which is standard.

3

Hi Richard

Thank you for taking the time to reply. This is what I feared and, I guess, given the current demand situation that may be fair enough.

I will take this on board as I decide what to do.

Best wishes

4

There is a compromise. The landlord can have a joint tenancy where the tenants remain jointly and severally liable, which is generally better for him. However, you can request a limited guarantor agreement where you are only underwriting the debt of your relative.

If the landlord refused this, I would withdraw the offer.

5

Thanks David.

This sounds ideal. Over the last couple of hours I have discovered ‘flatmate agreements’ on the advice of a friend with more knowledge in this area. For a very reasonable fee I can download a customised agreement from Lawdepot and each of the three tenants can sign that so that there is a contract between them which is separate to the joint tenancy agreement. I realise that from a legal perspective the landlord would ultimately pursue me, as the guarantor, for the missed rent, but then I would have my own contract on hand in order to go after the debtors. Obviously I hope it would never come to this, it’s just the security I am seeking, especially as I am looking to buy a home myself!

I will mention the limited guarantor agreement, but I suspect he will dismiss it as he has already said he’s not willing to entertain changes to what has been advertised. It’s a landlords and sellers market at the moment and so he and I know there’s a queue of other people lined up to take the place of these three prospective tenants.

Thanks again.

6

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