You sometimes have two people’s names on lease of a property interest, in actual fact sometimes even more. They’re maybe married or partners living together, or possibly business colleagues with a commercial property. And sometimes they may even be a company rather than individual name.
However many names you’re dealing with, there may be a request to have one of these removed, often when a lease is renewed or possibly even beforehand. Upon first impressions this might seem all okay, with them being good payers and possibly no actual changes even to the occupation of the property, just a technicality of changing a name on the tenancy.
You need to tread carefully though, as things are not always what they seem. Even in legitimate cases there may be legal loose-ends that need tying together so that everyone knows where they stand.
Therefore here are a few pointers to consider as you look into it. They’re based more on an example of a residential AST lease, where a couple living together have an agreement in their joint names and when it comes to a renewal they would like just one name on the lease even though they will both still be at the property. But the same principles apply to other similar scenarios as well.
1. Joint Liabilities
First of all remember the principle that all the tenants share liabilities on the basis of being joint tenants. Therefore with more names included, there are more people involved in needing to pay the rent and resolve issues.
Consequentially, when one tenant leaves, the responsibility lies back to fewer people. To get more technical, you can even look at separate tenancies for each party with split amounts and liabilities.
In reality this may be okay, but make sure that the remaining person (or people) have the ability to cope with things going forward, whether that’s affordability to pay the rent or ability to liaise with you regarding issues.
2. Remaining Responsibilities
Even where you remove a named party from the actual lease, remember that behind the scenes in the non-property world there may still be rights between them that have an effect on the property right.
So if they are a married couple, or even partners with civil rights, then the other partner may need to give permission for things happening. Therefore get this clarified, and if you’re changing names and renewing agreements on a new basis check that the named parties have separately clarified this with any other parties.
3. New or Transferred Agreements
An easy way would be to look at a new agreement on a new-name basis and a fresh start rather than trying to transfer an existing agreement. Either way, make sure the legal documentation is completed correctly.
Also, remember that leases do tend to provide rights for tenants to renew a lease term afterwards on a similar basis, so all existing tenants may want to insist upon this being the case if the change is not unanimously agreed by everyone.
4. Right to Rent
For residential short term lets, this Right to Rent is a new obligation to have vetted adults officially residing at the property, including those not actually on the lease. Therefore ideally you have this under way anyway irrespective of lease names, but watch out for older agreements that were not caught under these obligations suddenly falling within it for a renewal under a technically different names and so as landlord now needing to complete these checks.
As a rough benchmark, adults who are treating this as their home for over three months fall within this duty, so dig into whether any falling-away joint-tenant comes under this category (check out government guidance here).
5. Costs Involved
As a final point, just watch out for the fees and costs mounting up on something like this, and who covers. Letting and managing agents can suddenly demand extra costs if there is a pile of extra work to do, and even if a tenant needs to pay then make sure this is realistic and not a deal-stopper.
Joint Up The Joint-Tenant Dots
When you have joint tenant names on a lease, removing one of these is possible on the basis of a reduced number of tenants now being liable for things. Even if you’re fine with this, go through these other above points to see what other issues you need to consider in order to prevent issues arising later on.
Of course it’s going to be worth seeking advice, whether solicitors or surveyors you’re already involved with, or landlord-help services. For any unique situations this is particularly important as the detail can cause you big headaches later on.
Once resolved though, things can be more plain sailing with a happy landlord receiving rent and tenant benefiting from occupation.
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