When Co-Tenants Split

When Co-Tenants Split

Many, perhaps even most tenants are co-tenants with other persons. Sometimes the co-tenants are spouses or relatives by blood, other times the co-tenants have no legal relationship beyond their tenancy. Renting to unrelated parties can result in problems for the landlord that are not usually seen with renting to a single adult, a husband and wife, or two siblings. However, there is sometimes no choice except to do so. There are a number of circumstances that might make it necessary or beneficial, including (1) it may be required under fair housing laws, (2) a college area location may mean that this is your primary pool of potential tenants, or (3) a bad economy may push people into shared arrangements.

Similarly, there are many possible reasons why co-tenants might want to or need to cease living together in the same rental unit. Specific reasons include:

• Separation and/or divorce for spousal co-tenants   
• Non-spousal co-tenants no longer get along
• Financial difficulties
• Change in plans

Separation and/or Divorce – If a married couple separates and/or divorces during the term of a lease resulting in one of the residents departing, the landlord is well advised to evaluate the credit worthiness of the remaining resident before deciding whether or not to renew the lease. If the lease is renewed without the signature of the former spouse, the landlord may be deemed to have released the former resident from liability and will only have recourse to the assets of the spouse who remains as the resident.

No Longer Get Along – It is not unusual that non-spousal co-tenants find that they can’t live together peacefully and one or more wish to leave. This is particularly true when the parties have not previously tried living together. There can be a big difference between being friends with a person and living with that person. The issues of money and property use can create stress and strain upon a relationship.

Financial Difficulties – Sometimes a co-tenant can no longer meet his/her share of the financial obligations. This may be due to loss of employment, change of employment with reduction in income, or increased expenses (e.g., medical).

Change in Plans – The plans of one or more co-tenants may change during the term of the lease. This may be due to a change in employment location, transfer of schools, or any number of other personal reasons that require a change in address.

Leases Agreement Issues
There are a number of issues regarding residential lease agreements that can be of importance regarding co-tenants, including the following:

All occupants of legal age should be required to sign the lease. This should include both spouses of a married couple because, in some states, the assets or income of a spouse who has not signed the lease agreement cannot be subject to collection of any judgment.

Although most states make co-tenants jointly and severally liable by statute, the lease agreement should still contain the clause because the tenants then cannot claim to be unaware of their liabilities.

Unless prohibited by law, the lease agreement should require written consent of the landlord to a tenant’s request to sublet or assign the rental unit or to replace one co-tenant with another.

The agreement should include clauses regarding the security deposit and rent payment issues discussed below.

Replacing or Adding Co-Tenants

If a co-tenant leaves and the residents find a replacement resident who is accepted by the landlord, then the landlord can agree to the replacement subject to the applicant meeting the landlord’s qualifying criteria.

The proposed replacement or additional co-tenant should be required to submit a rental application, pay any usual application and screening fees, and consent to the landlord’s standard tenant screening process.

Upon acceptance of the new co-tenant by the landlord, a new lease agreement or an amendment to the existing agreement should be executed by all occupants of the rental unit.

As a general rule the more individuals liable for the lease the better for the landlord. Accordingly, if a co-tenant departs during the term of a lease, there is seldom a reason why the landlord should release that person from responsibility during the original lease term even when another person replaces him as co-tenant.

In the case where a departing occupant will not be replaced, landlords may also want to consider financially re-qualifying the remaining occupants regarding their joint ability to pay the rent. However, one must be careful to consider familial status issues under fair housing laws.

Security Deposit

Allocation of security deposit shares among old, new, and remaining co-tenants should usually be left as a matter between those parties. The landlord is not legally required to release any of the security deposit until all lease terms are met and the tenants have vacated the rental property. The new co-tenant usually should not pay a security deposit to the landlord. The landlord should return the security deposit only to the last person on the rental agreement to leave the apartment.

For protection of new, departing, and remaining occupants, it is a good idea that a walk-through inspection be performed and a checklist be completed. If a new lease is being written, it is recommended that the landlord collect reimbursement for damages to that date so that the continuing occupants can properly settle up with the departing co-tenant and start out with a clean slate and minimize damage claims later, a benefit to all parties.

Rent Payment

The landlord should only accept one full security deposit (in cash or bank check) and the FULL rent each month from one person. The residents can fight it out among themselves for the “privilege,” but if anybody offers partial rent, the landlord should refuse to accept, referring them to the lease agreement which should so specify. Accepting multiple separate checks can result in additional problems if one or more, but not all, bounce.

Unauthorized Occupants

If the landlord discovers that a replacement or additional occupant has been added in violation of the lease agreement, the landlord should immediately take action to end the stay or qualify the occupant as a co-tenant. Unreasonable delay may be construed to have indicated approval of an assignment or sublet without the landlord being able to exercise the usual control.

Co-Tenant Agreements

By utilizing a separate written agreement among the co-tenants, they may be able to lessen misunderstandings and disputes among themselves. The landlord should never be a party to such agreements and should never become involved in the writing or enforcement of them. So long as not a party to such an agreement, the landlord is not bound by the agreement.

Lease Defaults

It is important to remember that only landlords can evict tenants. A co-tenant cannot evict another co-tenant. Co-tenants cannot change locks to bar other co-tenants from access to the rental unit. Lease clauses customarily and should state that tenants will be in violation of the lease if they change locks without the landlord’s permission. Violations of the lease may result in eviction of one or all occupants. A default by any one occupant may result in the eviction of all occupants.

The landlord must decide whether to evict all occupants in those situations when the breach of the lease was for a reason other than nonpayment of rent. Certain circumstances could dictate that only the offending tenant be served with eviction. As a practical matter, the eviction of one tenant may impose a financial hardship on the rest of the occupants, resulting in nonpayment of rent. The breach of the lease by nonpayment of rent should always result in service of a “pay or quit” notice with nonpayment triggering initiation of the eviction process.

Domestic Violence

Many states and cities have special protections for victims of domestic violence. The landlord should become familiar with applicable statutes and know what action to take accordingly. Some states have an antidiscrimination statute that says the landlord cannot refuse to rent to or terminate a lease simply because the individual is a victim of domestic violence. In some states, the victim may have early lease termination rights and may end the lease without giving the customary amount of notice. Landlords in some states are prohibited from terminating the lease of a tenant who calls police for help in a domestic violence situation.

This entry was posted on August, 2010 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.