The Lemon Fool

We are going to rent a property owned by a married couple. Do they both need to be party to the AST agreement as Landlords, or only one of them? Does it make any difference if as owners of the property they are tenants in common or joint tenants?


GS
P.S. The agreement is being made without the interference of an agent . The property is a standard semi-detached house, furnished, with garden, garage and shed. Any recommendations for a suitable boiler-plate AST contract and a trouble-free company to manage the deposit?

I've been in this situation from the other side, i.e. as a married landlord. I always signed the AST in my sole name, and the AST named only me. There is no requirement for me to name my spouse or even reveal whether I have one, although such information can be discovered readily enough. There are no problems that I am aware of with using my sole name.

However, in the event that a tenant sued me for breach of that agreement, then that tenant would be free to name both myself and my spouse, and sue both of us. It can make collection of a judgement easier in some situations, such as where I lack liquid assets but my wife has them.

The distinction between joint tenants and tenants-in-common shouldn't make much difference, although the majority of married couples who own property do so as joint tenants. I will defer to others on the differences between the two cases if you sue, win and then try and force the sale of the property to satisfy the judgement. That would be very rare, I'd imagine, although I did hear of one case when the tenant ended up owning the property he had been renting.

Regarding your P.S., the landlord usually provides the AST. I would not have accepted one from a tenant but your landlord might if you want to go down that path.

Lootman wrote:I've been in this situation from the other side, i.e. as a married landlord. I always signed the AST in my sole name, and the AST named only me. There is no requirement for me to name my spouse or even reveal whether I have one, although such information can be discovered readily enough. There are no problems that I am aware of with using my sole name.

However, in the event that a tenant sued me for breach of that agreement, then that tenant would be free to name both myself and my spouse, and sue both of us. It can make collection of a judgement easier in some situations, such as where I lack liquid assets but my wife has them.

The distinction between joint tenants and tenants-in-common shouldn't make much difference, although the majority of married couples who own property do so as joint tenants. I will defer to others on the differences between the two cases if you sue, win and then try and force the sale of the property to satisfy the judgement. That would be very rare, I'd imagine, although I did hear of one case when the tenant ended up owning the property he had been renting.

Regarding your P.S., the landlord usually provides the AST. I would not have accepted one from a tenant but your landlord might if you want to go down that path.

Thanks for the comments Lootman. I've never thought too much about Landlords and ownership, but in this case there is the distinct possibility of a divorce so thought I may as well consider it.

As for the contract, the Landlord will do it, but given the lack of Agent I thought I might pass on any cunning suggestions from knowledgeable and experienced Fools!


GS

GoSeigen wrote: in this case there is the distinct possibility of a divorce so thought I may as well consider it.

A divorce or, for that matter, a sale or change of ownership of the property, would not affect the tenants. The lease that you sign applies regardless of ownership - any new owner steps into the shoes of the old owner and is responsible for following the terms of your lease. I have both bought and sold properties with tenants in them.

In practice, of course, any such change of owner might well change the prospects for renewing the lease at the end of the initial AST, and typically they are for six months only. Longer ones can be agreed by mutual consent and might be appropriate if you fear a change of ownership. That said, anyone who is planning on selling a rented property might prefer to sell it with vacant possession, and so not agree a longer lease.

Lootman wrote:

GoSeigen wrote: in this case there is the distinct possibility of a divorce so thought I may as well consider it.

A divorce or, for that matter, a sale or change of ownership of the property, would not affect the tenants.

Oh yes it might.

When my one-time landlords got divorced, things got worse for me as she got the flat but took no notice of her responsibilities, then (in 2005) gave me notice 'cos she wanted to sell. The owner-occupiers in the other flats in the building weren't happy either: they wanted her contribution to normal service charges.

Of course it's down to the individuals concerned. But don't assume you won't be affected by what happens in their lives!

UncleEbenezer wrote:

Lootman wrote:

GoSeigen wrote: in this case there is the distinct possibility of a divorce so thought I may as well consider it.

A divorce or, for that matter, a sale or change of ownership of the property, would not affect the tenants.

Oh yes it might.

When my one-time landlords got divorced, things got worse for me as she got the flat but took no notice of her responsibilities, then (in 2005) gave me notice 'cos she wanted to sell. The owner-occupiers in the other flats in the building weren't happy either: they wanted her contribution to normal service charges.

Of course it's down to the individuals concerned. But don't assume you won't be affected by what happens in their lives!

Absolutely. My comment was restricted to the observation that a tenant's rights do not change and the lease continues.

The day-to-day reality of being in that situation may be very different. Although, when I bought two buildings with sitting tenants, I did go out of my way to assure minimal impact.

As the tenant you should definitely insist on both owners signing your tenancy agreement, or at least seeing some written evidence that the non-signing owner has authorised the other owner to sign on behalf of them both.

The risk you are avoiding - that the non-signing owner will claim not to be bound by the tenancy- is probably quite small, but the cost of avoiding it is so tiny that you would be silly not to insist. And if you get push-back - say from the husband trying to explain why his wife can't sign - then it's time to get worried.

patrickmacqueen wrote:As the tenant you should definitely insist on both owners signing your tenancy agreement, or at least seeing some written evidence that the non-signing owner has authorised the other owner to sign on behalf of them both.

The risk you are avoiding - that the non-signing owner will claim not to be bound by the tenancy- is probably quite small, but the cost of avoiding it is so tiny that you would be silly not to insist. And if you get push-back - say from the husband trying to explain why his wife can't sign - then it's time to get worried.

Except that it's not always possible or desirable. For instance my wife and I both rented a place overseas for a while. She signed the lease for it because I was in another country at the time. My name was actually on the lease but I never signed it, and it never mattered.

The other practical problem is that a tenant will typically not know who owns a building. Landlords perform background checks on tenants but few if any tenants know much about their landlord. And as a landlord, if an applicant started asking me personal information it would raise a red flag. It just doesn't happen.

There may be some tenants somewhere who check title records to ensure that the person they are renting from is the owner, but I'll bet not many. And of course you don't have to be an owner at all to be a landlord - you could just be managing the place on behalf of the owner.