Contracts


 

What is a contract?


Your housing contract, also known as a Tenancy Agreement, is a (usually written) document outlining the terms of your arrangement with the landlord, including the address of the property that you are to rent, how much the rent will be, details of the deposit and any fees and usually when your tenancy starts and ends.

Most students sign an Assured Shorthold Tenancy contract, which typically has a fixed minimum term of either 12 or 9 months. The key thing to remember about contracts is that once signed they are legally binding – meaning that you can’t just walk away from it before the end of the tenancy. You’re legally bound to paying that rent to that landlord for that property with any other tenants on the contract right up until the tenancy expires. It’s very difficult to ‘get out’ of a contract once you’ve signed it, and if you stop paying rent before the end of the tenancy or in any other way breach the terms of the contract then you could face legal action.

 

Joint Contract vs Individual Contracts: There are two types of Tenancy Agreement (this bit is also really important!) – there are:

Joint tenancy

This is the most common type of tenancy contract offered to students. If, when it came to signing the contract, several of you signed the same piece of paper then you are in a joint contract. In a joint contract all the tenants are, for most legal purposes, seen as one ‘big’ tenant rather than several ‘little’ ones – so it’s actually just one huge sum of rent that’s due (which you happen to split between you) and similarly one big deposit (not several separate ones). This is significant primarily because it means that you’re financially tied to your housemates – if one of your housemates doesn’t pay their share of the rent, the landlord can legally ask any or all of the other tenants to pay it, and likewise if you don’t pay your rent then the landlord can legally ask your housemates to pay it. If any portion rent remains unpaid, the landlord can take legal action against ALL of the tenants, which means that you could all end up with a CCJ and / or (in rarer circumstances) you could all be evicted. Similarly, if one tenant breaks something if their room for example then the cost or repair could be taken from everyone’s share of the deposit equally. Also if a tenant is replaced by a new person then usually all the other tenants in the property have to agree to the new person moving in.

It's also worth noting that if tenants have guarantors, this makes no different to joint liability and doesn't stop the landlord for chasing up any joint tenants for outstanding money  - whether the landlord chases up the tenants, the guarantor/s, or both, is entirely up to them (if matters progress to Court action, proceedings are usually instigated against all tenants and any applicable guarantors). Guarantors themselves should pay close attention to how the guarantor form that they sign is worded - sometimes the guarnator's liability is limited to but their own son / daughter's share of the rent; in other cases they can be held liable for any money owed under the contract (i.e. liable if any tenant - not just the tenant that they're associated with - has fails to pay).

Individual tenancy

This is a slightly rarer type of tenancy contract but nevertheless you can try negotiating for one (and if you want to avoid joint liability we would usually recommend that you do!). If, when it came to signing the contract, you all signed a separate piece of paper / separate contracts then you are probably individual contract. This means that you are all seen as separate individual tenants and liability for each person’s rent is limited to that one person (and of course their guarantor if they have provided one), so for the purposes of rent the tenants aren’t financially tied to each other. The if one person doesn’t pay their rent then the other tenants can’t be asked to pay it if they’re on an individual contract. So in essence you’re renting your own bedroom only plus shared rights to the common areas, and you pay your own individual rent and have your own individual deposit. However if one tenants breaks something in a common area (e.g. living room) then, unless they own up to it or the landlord has evidence of who was responsible for the damage, all the tenants in the property could still potentially have the cost of repair deducted equally from each of their individual deposits. If a tenant is replaced by a new person then usually the landlord can (in theory) sign off on the new person moving in without the written approval of the other tenants.

Click here for a summary pros & cons comparison of joint vs individual contracts

 

 

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