Maximum of four owners: status of T5/6/7 etc?

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    Maximum of four owners: status of T5/6/7 etc?

    J4L said in another thread:

    I think I was advised on this forum that the fifth and subsequent named individuals on an AST contract aren't actually tenants, but have a licence to occupy. As such they have fewer rights than the first four tenants named on the TA.
    It is certainly the case that where a tenancy is granted to more than four persons the legal estate only vests in the first four named. However, I do not think it follows that the remainder are not tenants at all.

    First, the landlord has expressly granted them a tenancy and thereby created the relationship of landlord and tenant. It is not necessary for a tenant to have a legal estate vested in him.

    Secondly, tenants 5 and so on will be a party to the agreement and have taken on the same obligations as tenants 1 -4. Those obligations include an obligation to pay rent. If you are in occupation of a property with an obligation to pay rent I do not see how you can be other than a tenant.

    I think it must be the case that tenants 5 and so on are equitable tenants. Since the whole arrangement includes legal tenants I cannot see that for any practical purposes tenants 5 and so on have fewer rights than tenants 1 - 4.

    An interesting question is how do you work out who the legal tenants are where a tenancy is granted orally to more than 4 persons.

    #2
    Could it be you'd pick the oldest 4 or wisest 4 tenants?? The prettiest??

    Oh I don't know haha.

    Seriously, let's not do oral agreements and make them sign!
    Ambition is Critical

    I don't profess to be a knowledge in all areas, my advice is based on life experience.

    Comment


      #3
      Originally posted by Lawcruncher View Post
      J4L said in another thread:



      It is certainly the case that where a tenancy is granted to more than four persons the legal estate only vests in the first four named. However, I do not think it follows that the remainder are not tenants at all.

      First, the landlord has expressly granted them a tenancy and thereby created the relationship of landlord and tenant. It is not necessary for a tenant to have a legal estate vested in him.

      Secondly, tenants 5 and so on will be a party to the agreement and have taken on the same obligations as tenants 1 -4. Those obligations include an obligation to pay rent. If you are in occupation of a property with an obligation to pay rent I do not see how you can be other than a tenant.

      I think it must be the case that tenants 5 and so on are equitable tenants. Since the whole arrangement includes legal tenants I cannot see that for any practical purposes tenants 5 and so on have fewer rights than tenants 1 - 4.

      An interesting question is how do you work out who the legal tenants are where a tenancy is granted orally to more than 4 persons.

      I would have thought as you do, in that the fifth (etc) occupiers are in fact tenants too, with the same rights and responsibilites as the first four. But please read the thread I started on 2 Sept called 'Deposit received from replacement tenant' where I am given to understand they do not have the same status.

      What are 'equitable tenants', exactly?
      'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

      Comment


        #4
        Originally posted by mind the gap View Post
        I would have thought as you do, in that the fifth (etc) occupiers are in fact tenants too, with the same rights and responsibilites as the first four. But please read the thread I started on 2 Sept called 'Deposit received from replacement tenant' where I am given to understand they do not have the same status.
        Obviously what I have said above does not agree with what is in that thread.

        I note you said, "Tenancy contract was amended to show new tenant's name." I am not sure you can do that.

        Originally posted by mind the gap View Post
        What are 'equitable tenants', exactly?
        How long have you got?

        Comment


          #5
          Originally posted by Lawcruncher View Post
          Obviously what I have said above does not agree with what is in that thread. I am going to have to research this one a bit more deeply, because it rears its head regularly and no-one seems to know the definitive answer. It is of particular interest to me as all the houses I rent out have 5 or 6 students in them!
          I note you said, "Tenancy contract was amended to show new tenant's name." I am not sure you can do that. No, knowing what I do now, I agree with you. It was actually an estate agent who suggested it at the time!

          How long have you got? As long as it takes - if you don't mind trying to explain it to a lay brain, and can spare the time! .


          Thanks in advance!
          'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

          Comment


            #6
            The answer is that you can have as many tenants as you want on an AST, but the landlord can only take legal action against the first four named; it therefore follows that all named tenants enjoy the status of being tenants as far as their lawwful occupation is concerned, but the landlord is restricted against whom he can take action in the event of a breach. You only have to think about it for a minute or two to arrive at this conclusion.
            The advice I give should not be construed as a definitive answer, and is without prejudice or liability. You are advised to consult a specialist solicitor or other person of equal legal standing.

            Comment


              #7
              Originally posted by Paul_f View Post
              ...the landlord can only take legal action against the first four named;
              I do not think that that can be the case.

              If we are talking about suing for rent or breach of agreement, then we can forget about whether or not there is a relationship of landlord and tenant because there are, apart from the tenancy, obligations entered into which are enforceable as a matter of contract.

              When it comes to seeking an order for possession you have to name all those named in the tenancy agreement because you need a court order for possession even if an occuper is a licensee.

              The question arises as to the persons to be named in a section 21 notice. I would suggest it should be all the tenants. However, any doubt can be removed by serving two notices: one on the first four named and one on all the tenants.

              Comment


                #8
                Originally posted by Paul_f View Post
                The answer is that you can have as many tenants as you want on an AST, but the landlord can only take legal action against the first four named; it therefore follows that all named tenants enjoy the status of being tenants as far as their lawwful occupation is concerned, but the landlord is restricted against whom he can take action in the event of a breach. You only have to think about it for a minute or two to arrive at this conclusion.
                Thank you for your clarity, but as you can see, it has taken two good legal brains and my common-or-garden brain longer than 'a minute or two' to ponder this and we still didn't reach that conclusion!

                I'm intrigued by the rationale behind this restriction. Is it a mechanism to prevent landlords packing in too many tenants ? Surely the HMO regs ensure that.
                'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                Comment


                  #9
                  Originally posted by mind the gap View Post
                  I'm intrigued by the rationale behind this restriction. Is it a mechanism to prevent landlords packing in too many tenants ? Surely the HMO regs ensure that.
                  The restriction is contained in the Trustee Act 1925. It does not apply only to leases, but also to freehold land. Its sole purpose is to simplify the conveyancing process by keeping the number of persons a purchaser has to deal with to a reasonable number. It has nothing to do with trying to prevent overcrowding.

                  Comment


                    #10
                    Originally posted by Lawcruncher View Post
                    The restriction is contained in the Trustee Act 1925. It does not apply only to leases, but also to freehold land. Its sole purpose is to simplify the conveyancing process by keeping the number of persons a purchaser has to deal with to a reasonable number. It has nothing to do with trying to prevent overcrowding.
                    Interesting - thanks! (A bit optimistic/naive of them, though, hoping to be able to simplify the conveyancing process!)
                    'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                    Comment


                      #11
                      Originally posted by mind the gap View Post
                      Interesting - thanks! (A bit optimistic/naive of them, though, hoping to be able to simplify the conveyancing process!)
                      Believe me when I say that the 1925 property legislation simplified the law of property and the conveyancing system.

                      Comment


                        #12
                        Originally posted by Lawcruncher View Post
                        Believe me when I say that the 1925 property legislation simplified the law of property and the conveyancing system.
                        I believe you, I believe you.

                        Any more thoughts on what makes a tenant equitable, please?
                        'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                        Comment


                          #13
                          Originally posted by mind the gap View Post
                          Any more thoughts on what makes a tenant equitable, please?
                          Generally, a person's interest is equitable if the requirements for a legal estate or interest are unsatisfied. This is, for instance, how a long lease can be equitable [if not executed as a Deed]. The point is that an equitable interest usually binds only the then parties, not their successors.
                          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                          4. *- Contact info: click on my name (blue-highlight link).

                          Comment


                            #14
                            Originally posted by jeffrey View Post
                            Generally, a person's interest is equitable if the requirements for a legal estate or interest are unsatisfied. This is, for instance, how a long lease can be equitable [if not executed as a Deed]. The point is that an equitable interest usually binds only the then parties, not their successors.

                            Please could you explain how that works in the context of 12 month student AST lettings involving more than 4 tenants?
                            'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

                            Comment


                              #15
                              Originally posted by mind the gap View Post
                              Please could you explain how that works in the context of 12 month student AST lettings involving more than 4 tenants?
                              [Sorry for host of abbreviations in what follows!]

                              Let's say that L1 tries to grant an AST to six people, T1/T2/T3/T4/X/Y.
                              L1 then sells to L2.
                              L2 is bound by rights of T1/T2/T3/T4 (legal estate/interest created by AST).
                              L2 is not bound by rights of X/Y who cannot hold the AST, unless L2 bought with notice of their equitable interests..
                              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                              4. *- Contact info: click on my name (blue-highlight link).

                              Comment

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