When deciding to let out accommodation to students it is important for landlords to decide on what sort of tenancy agreement to use.
The main choice landlords have is between joint or single shared tenancies, the benefits of which are subjective depending on your preferences and priorities.
In a joint tenancy, tenants have full access to all of the accommodation’s amenities with no one holding exclusive rights to a particular area. Tenants agree among themselves who will get which bedroom and one agreement is used to encompass all occupants.
With a tenancy agreement for a room, on the other hand, rooms are let out individually with tenants holding joint access to communal areas only. They hold exclusive rights to one room.
Under the Housing Act 2004, landlords should also familiarise themselves with the conditions of letting a House in Multiple Occupation (HMO).
The benefits of a joint tenancy
Joint tenancies are generally ideal for groups of people who already know each other and have a loyalty to one another.
This typically prevents one occupant from leaving the accommodation unannounced, placing pressure on its existing occupants to cover their fees and can make life easier for landlords as a result.
The benefit for landlords is that tenants are jointly responsible for all costs and must come to an agreement about how to deal with these themselves.
They also carry a lot or responsibility because if one or all of the them cause a loss to the landlord, perhaps by vacating without notice, the landlord can demand total arrears from any one of the occupants. This prevents the landlord from having to track down each individual.
Although students are exempt from council tax, it is worth landlords noting that under an Assured Shorthold Tenancy (AST), any other residing occupants are required to pay council tax directly to the local authority.
Under an AST, they will also be jointly responsible for paying utility bills directly to their providers.
If a tenant decides to leave, it is the obligation of the remaining tenants to ensure their rent is paid. In most cases, they will find a new tenant, but again, this is their responsibility and not that of the landlords.
If a new occupant is brought in, they must be signed up to a new joint tenancy agreement for the remainder of the term or start a new term.
When an occupant leaves, the matter of the deposit is another issue. The newcomer can pay their deposit to the leaver, allowing the landlord to keep hold of the original deposit.
Furthermore, under the custodial tenancy deposit scheme, landlords can choose whether to hold the deposit as one lump sum or break it down into individual payments for each tenant.
The benefits of a tenancy agreement for a room
Individual tenancies with shared facilities enable occupants to come and go as they please in either short or long-term tenancies.
The benefits of landlords issuing a tenancy agreement for a room to individual tenants is that the landlords then have the right to inspect communal areas without prior notice, whereas they do not have the right to ‘drop in’ unannounced on a joint tenancy household.
In most instances, the landlord is also able to charge higher rates of rent.
One of the minor problems with a tenancy agreement for a room is compatibility among residents. Because they are effectively strangers coming together with no prior friendship, they could clash or fail to make compromises for one another.
This clash could result in a poor occupant driving more reliable residents from the accommodation, which is often a disappointment for landlords.
Moreover, tenants are not jointly responsible for bills, meaning landlords risk picking up the costs of amenities if occupants turn out to be unreliable. However, the property owner can counteract this threat by including bill payments in the rent sum.
This outline is meant as a guideline only for landlords and is not an exhaustive list of the conditions of joint and individual agreements.
Download Lawpack’s tenancy agreement for a room, an agreement for an individual tenancy, approved by Anthony Gold Solicitors.