Understanding Joint and Several Liability in Rental Leases

by | May 12, 2014 | Rental Forms

Joint and several liability gives landlords an important advantage when renting one unit to multiple tenants.

‘Together and apart’, the phrase means all tenants are liable, but any one tenant could be held accountable for the entire balance of rent or any other charges or judgments that stem from the lease agreement. Any one tenant could be held accountable for the actions of a roommate who damages the property.

How to Create Joint and Several Liability in a Rental Lease

tenant screeningJoint and several liability is a feature of contract law and may be implied just by virtue of the fact that the lease is signed by multiple tenants. However, local laws and practices vary, so many standard lease forms include a “joint and several liability” clause just to be on the safe side.

Using this clause accomplishes two things: First, it makes it crystal clear that it is a lease with multiple tenants, as opposed to a tenant subletting arrangement, which would change the landlord’s rights. Just as important, by reading the clause, the tenants become aware from the onset that they share liability, together and separately. That gives the roommates pause to consider if they want to throw their financial lot in with the others. That will go a long way towards enforcing the provisions of the lease.

Your lease form may already contain this provision. Typical language reads something like this:

All tenants shall be held jointly and severally liable for all terms and obligations under this Lease.

Some leases include an explanation: Joint and several liability means that, while all Tenants are jointly liable for rent and all other obligations under the lease, at the same time any one Tenant may be held responsible to the Landlord for the entire amount of unpaid rent or other charges or for damages owed by any Tenant.

The lease also may include non-waiver language, which essentially provides that no actions by the landlord or other tenants will in any way limit the joint and several liability clause.

These are contract clauses that should be drafted with care by your attorney. It’s worth the extra expense should a problem arise during the lease term. Otherwise you may limit your ability to collect what’s owed you from specific tenants.

How to Destroy Joint and Several Liability

It may not be necessary for the lease to include a joint and several liability clause. Still, if you have a written lease with a defective joint and several liability clause, it could limit your legal rights.

In general, any time the language in a lease agreement is confusing or ambigious, unintended consequences can follow. A lease agreement that is signed by only one tenant, or does not identify the names of each tenant in the lease (e.g. “John Doe, et.al”) in the are examples of potentially fatal flaws in a rental lease.

It’s a good idea for the lease to track in number throughout — ‘tenants’, not ‘tenant’, for instance. There should be just one rental figure for the lease and no mention made of pro rata payments or refunds.

Actions by the landlord after the lease is signed can affect joint and several liability of the tenants. More accurately, these actions can create defenses to joint and several liability with respect to one or more of the tenants. Such actions can include refunding a portion of the security deposit to an exiting tenant, accepting one tenant’s early termination, or accepting partial payment, like 50% of rent, from one tenant.

To avoid these problems, some landlords refuse to accept separate rent checks from the multiple tenants. However, that may not be necessary. Problems more typically arise when the landlord treats the tenants as separate entities, like accepting half the rent and then charging only the “defaulting” tenant a late fee. Likewise, security deposits are generally best refunded with one check made jointly to all of the payees. Local rental laws vary greatly, so speak with your attorney if you are concerned how to proceed with partial rent payments or security deposit refunds.

Collecting Against Joint and Several Tenants

When eviction co-tenants, it’s important to name all of them individually to avoid the unfortunate circumstance of a hold-over tenant.

The rights provided by joint and several liability mean that a landlord can pursue payment against all co-tenants without regard for proportion: 100% could be collected against one or nothing against the others, or any other possible combination. Once the landlord is paid, then it’s up to the co-tenants to sort out any redistribution amongst themselves.

Even though some co-tenants may have more assets to collect against, it’s still best to name and serve all tenants in any lawsuit you bring to enforce the lease. The one exception is where one tenant is proving impossible to locate or serve. Rather than delaying your lawsuit, your attorney may advise you to proceed and add the missing person when you can. This strategy places the burden on the other tenants to ferret out their absent roommate to make him or her share the responsibility.

The first step to a successful tenancy is understanding and preserving your rights as a landlord. The next is to educate your tenants on their rights and responsibilities. When it comes to joint and several liability, the best defense is a good offense — if the tenants know what’s at stake, they can act accordingly, so there’s never a need to enforce the right.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post in not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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