When they run smoothly, joint tenancies can be a good source of income for landlords. This three-minute read explains how to get the best out of them.
Joint tenancies are a great way for friends or couples to live together and share the rental burden. (Think about best buddies and flatmates Joey and Chandler in Friends, they had a ball, right?)
And joint tenancies can also be good news for landlords, providing steady long-term income and low tenant turnover. (If your tenants are happy and get along like Joey and Chandler, they’ll stay for years.)
But sometimes, the relationship between tenants turns sour and things can get complicated. Before we look at managing tenant relationships, here’s a quick recap on joint tenancies.
- As a general rule*, all tenants in a joint tenancy are liable for the rent. This means that if one tenant falls into arrears, the landlord can ask any or all the other tenants to cover the shortfall.
- The same goes for damage to the property – all tenants are liable. Even if only one tenant (or their guest) caused the damage, any or all tenants could be required to pay for the repairs.
- One person can’t pull the plug on a joint tenancy; the landlord and all tenants must agree to end the tenancy.
- If end-of-tenancy deductions are agreed upon, they’re taken from the overall deposit.
Getting the best out of a joint tenancy
- Never rely on one tenant to share important information with other tenants for you (they may fail to do so or may get it wrong).
- If there’s an issue with arrears, notify all the tenants and explain that they’re all liable. Tenants who have paid their share of the rent can be valuable allies and help persuade the tenant who is behind to get back on track.
- Remain professional and don’t get caught up in a melodrama between friends or lovers who have fallen out (they may want you to take sides). Remind all parties of their joint liability and encourage them to sort it out amongst themselves.
- Always notify people who sign up to be the sole guarantor on a joint tenancy that they’re liable for all rent and damages. Often a parent thinks they’re just covering their own child – not all the tenants.
To find out how Greyfox can help manage your property and avoid tenancy troubles, get in touch.
*Always check the terms of your rental agreement and, if in doubt, seek expert advice.