Problems arise when a prospective tenant seeks accommodation but cannot afford their ideal – to rent a one bedroom flat.
The next best arrangement is to share a house with a group of like minded friends and form a joint tenancy all sharing the costs of rent and bills equally. Student tenants fit this classic scenario.
Some tenants are less fortunate and do not have a readily available nucleus of friends also seeking to house-share. The older the house mate the less likely their peer group will be seeking accommodation, most older people do not want to share. This is when problems manifest – problems of compatibility in particular.
Most Landlords and agents, given the choice, would opt for a group of joint sharers. They all share a single joint tenancy.
This is in contrast to a group of unrelated individuals who all share a house with separate tenancy agreements, each starting and finishing on different dates. Each tenant pays their rents in accordance with the perceived value of their room and shared amenities.
In the UK, this has numerous ramifications involving complex Council Tax calculations and determinations. In addition, legal implications affect tenants who have ‘not exactly’ chosen to live together, what happens if they fall out with each other?
The problem is exacerbated when some tenants, who would otherwise be exempt from Council Tax, find themselves having to pay anyway. Students and benefit recipients have to pay Council Tax simply because of the type of tenancy they hold. In this situation the landlord is likely to become responsible for paying the Council Tax, even when all the occupants would otherwise be exempt. Were the tenants instead part of a joint tenancy agreement, they might be better off. The landlord is consequently obliged to reflect this additional cost of Council Tax in the rent. This means that any exemption is effectively lost. Yes it is so messy and it gets yet messier! Once there is a separation of tenancy dates and rents, residents become individual tenants attracting a raft of specific rules. The landlord is similarly affected.
Other considerations include damage to property. E.g. who is responsible for the hole which mysteriously appears in a door? With individual tenancies and the absence of joint responsibility, timid tenants might not wish to name the culprit, simply stating, “Honest it wasn’t me!” This is not the sort of house-share that most tenants would choose. Without collective responsibility, enforcement is almost impossible. Eviction of bad tenants on an individual basis can take several months, hampered by the absence of cooperation and witness statements.
Costs are yet another consideration. E.g. in the UK, each tenant in this scenario must have a separate TV license for their own TV, if it is located in their own room. This is in contrast to joint tenants who need only one TV license for all televisions located anywhere within the property.
Planning permission is a further consideration. This may be required for such tenancies where there are more than three unrelated occupants sharing an HMO (house in multiple occupation). If granted, it is time consuming and attracts an application fee. Any acceptance will include restrictions.
Simple maintenance matters must be communicated, but who will be responsible for reporting urgencies to and from the landlord or letting agent? Within a disparate group of transients some may not convey a landlords’ response to immediately attend to say, an emergency electrical fault.
Such tenancies seldom see the entire house empty. However, despite this, incidences of theft are higher than joint tenancies. This is not caused, as one might expect, from break-ins, but from inter-tenant theft of possessions – especially food. Tenants who have not chosen each other are less benevolent to one another. When a property is empty, this is normally the ideal time to decorate and renovate. Perpetual occupation makes decoration more difficult to plan, resulting in greater inconvenience to all. Working with tenants in situation also adds to any costs for labour, due to working around an existing group. This is in contrast to groups of students normally absent during summer vacations allowing the house to be decorated in the tenant’s absence.