The pros and cons of a joint tenancy agreement

As a landlord, letting out your rental property to a group of friends, a couple, or a professional house share means that you’ll need to decide on the type of tenancy you want to issue, whether it be an individual tenancy or a joint tenancy agreement. 

From your perspective, issuing a joint tenancy agreement can bethe best-case scenario because it simplifies the administrative process and provides you with a certain level of financial security. Here, we’ll go through the pros and cons of a joint tenancy agreement and how the Renters’ Rights Act is impacting this. 

What is a joint tenancy agreement?

When a joint tenancy rental agreement is issued, all the occupants in the property are collectively viewed as ‘the tenant’. This means that every person named on the tenancy agreement is responsible for the property and the rent. So, your relationship is essentially with one legal entity, and not separate individuals.

Tenants with a joint rental agreement will need to share the communal areas and the bedrooms they have agreed to. This also means that the tenants will pay one lump sum of rent and will need to provide one single deposit that is registered under one lead tenant. 

Joint and several liability

This principle is one of the main benefits of issuing a joint tenancy agreement because it means that every tenant is responsible for the rent, as mentioned above. So, if you have three tenants in your rental property who are under a joint rental agreement and one stops paying their share of rent, you have the right to demand the missing payment from the other two tenants or their guarantors. 

Damage and deposits

Also, if there is major damage to the property and no one admits to causing it, you’ll be able to deduct the repair costs from the deposit they paid you at the start of the tenancy. 

The Renters’ Rights Act

One of the main things that has come out of the Renters’ Rights Act is that fixed-term contracts will no longer be an option for landlords to provide. Instead, all tenancies are now going to be structured as periodic assured tenancies, and this inevitably will have an impact on landlords using joint tenancy agreements. 

The end of the fixed-term agreements

Previously, landlords were able to lock tenants into a 12-month-long contract, whereas with the new regulations, tenants are able to give two months’ notice at any given time within the leasing agreement. What this means for landlords is that you’ll need to be more selective of your tenants because guaranteed rent for a year is no longer a given. 

The unilateral notice risk

Another complex part of the new Act is that the way a joint rental agreement ends is different from before. Now, anyone with a joint tenancy agreement can hand in notice for anyone else also on that tenancy agreement. They will not need the permission of their housemates, and once the tenancy period ends, it will end for all occupants. 

But the great thing is that you don’t have to force those who want to remain in the leasing agreement. Instead, it will be your responsibility to negotiate a new joint tenancy agreement with the remaining tenants. This way, you can easily avoid a total void period. 

Joint tenancy vs. individual room lets

Let’s now take a look at the difference between a joint tenancy agreement and individual tenancies. 

Joint tenancy agreement

As mentioned above, all tenants on the joint rental agreement are liable for the full amount of rent and the council tax bill. They’re also responsible for managing their own utility bills. Also, as we mentioned above, notice is served for every occupant of the property. The nice thing about a joint tenancy agreement is that management time will be more streamlined, as you will only need one point of contact. 

Individual room let

With individual room lets, you’ll lose money if one of the rooms is vacant, and, oftentimes, you will be responsible for the council tax as the landlord. With individual room lets, you’ll also have to dedicate more time to management, as you’ll need to manage individual disputes instead of collectively. One advantage, however, is that you can evict one person without affecting the other tenants. 

Best practices 

Next, let’s discuss everything you need to be implementing to make a joint rental agreement work for you and your business. 

Use comprehensive guarantors

Make sure that you use a guarantor who can cover the entire rent of the house, not just one individual tenant. Also, make sure that your guarantor forms explicitly state that they are jointly and severally liable. This is your best safeguard against rent arrears. 

Lead tenant

You’ll need to have a ‘lead’ tenant who will be the first point of contact for the Deposit Protection Service (DPS). Make sure your tenants decide who this is before the tenancy agreement is signed to avoid disputes. 

Formalise the change of the sharer

Always make sure you have a process in place in the event that one tenant wants to exit the tenancy, but the others want to stay. You’ll need to either use a formal ‘deed of assignment’ or end the current tenancy and start a fresh one. This way, any new tenants will have also been thoroughly credit-checked and right-to-rent verified. 

Is a joint tenancy agreement right for you?

From your perspective, as the landlord, this is the easiest way to manage letting your property out to a group of tenants because it eradicates the risk of void periods and rent management, giving these responsibilities to the tenants.

While the Renters’ Rights Act 2025 has introduced more flexibility for tenants to end rental agreements, there is still protection for landlords with ‘joint and several liability’. So, if your tenants are properly vetted and you have a reliable guarantor, having a joint tenancy agreement is the best way forward. 

Once you have decided on how to implement the joint tenancy agreement, you may be looking for reliable landlord insurance deals. Make sure to get in touch with our team of specialists at CIA Landlords on 01788 818 670 for more information and ensure you invest in the safety of your property.