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Where there's a house share, some landlords choose a single joint and several tenancy and others choose individual tenancies on a room-by-room basis. There is no right or wrong way, and it's a personal choice.
Please see this article for a look at the pros and cons of each option.
Generally, we prefer the joint and several method whereby a single tenancy is used for the whole property with multiple names.
However, one of the drawbacks is if one or more joint tenant(s) wishes to move out and be replaced, what should the landlord do? Our advice has always been that where there's a change to joint tenants, a completely new tenancy from scratch is needed (as if all the tenants had vacated).
Where the tenants change, and it is known or accepted by the landlord without a new tenancy, it is a surrender of the original tenancy and re-grant to the new composition of tenants. This was confirmed in Sturgiss & Anor v Boddy & Ors (2021) EW Misc 10 (CC), as HHJ Luba QC held (paras 67 - 69):
As to the extent to which a landlord needs to know - in advance - that joint tenant X is being replaced by joint tenant Y, Mr Jacob relied on Tower Hamlets v Ayinde [1994] 26 HLR 631. There, on markedly different facts, the Court of Appeal found that having been told that an outgoing tenant had departed and had installed a replacement, a landlord was thereafter fixed, by its conduct, with the new incumbent by surrender and re-grant. The short point is that the landlord’s acceptance of the new set up amounted to a completion of the process of surrender and re-grant even in circumstances where it had not known of the switch of occupiers when or before it took place.
Here, there was in place, as the landlord’s own evidence sets out, a prior arrangement that at the departure of one or more individuals the property would be treated as, in effect, re-let to those remaining and the new arrival(s). The arrangement did not require the landlord to participate in any way at the time or to be informed each time (although the Judge found he was). Given that this was a structure of the landlord’s own making he can hardly be heard to complain if the law gives effect to what has been agreed through the medium of surrender and re-grant.
As explained in QFS, the authorities on surrender are infused by the concept of estoppel i.e. the landlord who has acted consistently with the termination of a tenancy and the acceptance of a new tenancy cannot later resile. In the current context, it would be absurd to think that the landlord could insist that an individual who was a joint tenant before a ‘churn’, and had left after it, was still a tenant even though he was accepting rent he knew (or can be taken to have known) was being tendered on behalf of a new group.
In respect of deposits, it's crucial when completing a change of tenant (by way of a new tenancy) that the deposit for the old group is returned and then re-protected under the new tenancy/group.
In the case mentioned above, the incoming tenants had been paying the outgoing tenants a proportion of the deposit for the whole tenancy. However, this was regarded (quite rightly) as the landlord receiving new deposits for each change in tenancy (referred to in the case as a 'churn'), and the landlord was held liable for a deposit penalty for each churn as the deposit was failed to be protected each time.
It seems to me that where the landlord has entered into a construct by which, at his own design, there is a single initial payment of a deposit and thereafter a churning in the identities of tenants, he must be treated as having been ‘paid’, by each new cohort, the amount held in respect of the original cohort and each subsequent cohort. The alternative is the very artificial notion that Mr Boddy is fixed with an indefinite liability to account to his original (and long gone) 2004 tenants for such sum as is left after proper deduction in respect of acts for which they are not responsible and have assumed no responsibility.
For a more detailed look at Sturgiss & Anor v Boddy & Ors, please see this NearlyLegal post.
As already discussed, the deposit must be unprotected for the old composition of tenants and re-protected under the new tenancy and composition.
The deposit will be a single amount for the entire tenancy, and each tenant can pay a proportion if they wish. Still, it will nevertheless be a single joint deposit covering the whole tenancy (and as such, any penalties for a failure to protect will apply to the total amount, not just an individual tenant's portion).
If using a custodial scheme such as with the Deposit Protection Service, as long as all the tenants agree, the deposit could be returned to the landlord, making re-protecting quicker and easier.
If preferred, the outgoing tenant could be sent their proportion by DPS and the remaining to the landlord. The landlord would then collect a new portion from the incoming and add it to the pot for protection of the entire single deposit.
We know this has been well covered in this article, but always give a new tenancy when a tenant changes. With digital signing, this is much easier than it used to be.
We've heard of advisors suggesting an assignment for this purpose. An assignment is not suitable for assigning part of a tenancy (i.e. one name) in our view. Furthermore, assignment is not usually ideal for any short term tenancies such as assured shorthold.
To give a visual context of when assignments are generally suitable, think of a shop on a 25-year lease. After five years, the shop may wish to sell its business.
As such, the landlord may agree (or be bound by the tenancy) to allow the tenant to assign the tenancy for the remainder of the lease (in this example, the remaining 20 years). That is when assignments are appropriately used for their intended purpose. Crucially, in this example, the whole lease is assigned for the remainder of the term.
It might be suggested a new name could instead be added as a "permitted occupier". We always prefer names on the tenancy to match adult occupiers where possible.
The problem is if the named tenant(s) left and the permitted occupier remained, what notice should be served, and what court order is required for someone not shown as a tenant?
It's also possible that the permitted occupier could argue the status was a sham and, in reality, was a tenant all the time (a little like trying to give someone a licence when they're a tenant). There are occasions when permitted occupiers are suitable (for example, adult children living with parents), but otherwise, in our view, it should only be used in rare and specific circumstances. A new tenancy should be done with the new name added.
Most common is for a tenant to leave and be replaced. However, there are occasions where one tenant wishes to go, and there's no replacement. If a tenant leaves without the landlord knowing, the tenancy will continue as before. Section 1(1)(b) Housing Act 1988 states that as long as at least one of the joint tenants occupies their only or principal home, the tenancy will continue:
A tenancy under which a dwelling-house is let as a separate dwelling is for the purposes of this Act an assured tenancy if and so long as- ... (b) the tenant or, as the case may be, at least one of the joint tenants occupies the dwelling-house as his only or principal home ... ...
However, if the landlord is aware and accepts the tenant leaving (or is bound to accept by the tenant giving a valid notice to quit), the landlord must complete a new tenancy.