5 tenants on AST ?

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    5 tenants on AST ?

    Hi there

    I have just agreed to let my property to 5 students and my letting agent tells me he doesn't think it can be let on a single AST, as it would need to be 4 or less people to use this. (In case it matters, FYI the property is not classed as a licensable HMO.)

    Last year a different letting agent had drawn up a joint AST, which seems clearly at odds with that this new agent is saying.

    Which is correct? Can you let to 5 people on a single AST ? Is there a good reference I can check somewhere ?

    If not, is the alternative 5 individual ASTs or a non-shorthold tenancy agreement? There is more risk for landlords for non-shorthold right?

    many thanks in advance for any insight anyone can offer!

    #2
    You can have 4 tenants jointly and severally liable, and a 5th person as a permitted occupier.

    I would avoid separate ASTs as you could end up with responsibility for all the shared areas - and no 'joint and several' if one decides to not pay rent.

    Having said that - separate ASTs are usually pitched at a higher rent than joint (less tenant responsibility and more tenant flexibility) so you will have to weigh up the pros and cons.

    Comment


      #3
      1. If you grant an AST to more than four persons and all those persons agree to be bound by the terms of the tenancy (which will be the case if they all accept the tenancy) then as a matter of contract all of those persons will be bound to observe and perform the terms of the tenancy

      2. If you grant an AST to more than four persons the legal estate is only vested in the first four named on the agreement. (Who the legal estate is vested in if you grant the tenancy orally is a conundrum.)

      3. If you grant a tenancy to more than four persons then each of them is a tenant because the relationship of landlord and tenant exists simply by virtue of the tenancy having been granted. The relationship of landlord and tenant does not depend on the existence of an estate in land.

      Comment


        #4
        Thanks Snorkerz, Lawcruncher!

        So I can have a 5-tenant AST but the "legal estate" is only vested in the first four? What does this mean and what are the implications?

        Or alternatively having a 4-tenant AST and one permitted occupier, I guess I only have recourse against the 4 tenants?

        Many thanks !!

        Comment


          #5
          Are you sure it isn't a licensable HMO?
          '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
            Originally posted by rathga View Post
            So I can have a 5-tenant AST but the "legal estate" is only vested in the first four? What does this mean and what are the implications?
            It is the tenants' problem and not the landlord's problem. It means that the first four named can transfer or mortgage or otherwise deal with the legal estate.

            Originally posted by rathga View Post
            Or alternatively having a 4-tenant AST and one permitted occupier, I guess I only have recourse against the 4 tenants?
            As a matter of contract, and irrespective of whether or not he is a tenant, the fifth person named will have agreed to comply with the terms of the tenancy. However, if you want to be belt and braces about it, you can make the shiftiest looking applicant the fifth named tenant.

            Comment


              #7
              Originally posted by Lawcruncher View Post

              As a matter of contract, and irrespective of whether or not he is a tenant, the fifth person named will have agreed to comply with the terms of the tenancy. However, if you want to be belt and braces about it, you can make the shiftiest looking applicant the fifth named tenant.
              Ha! That is the best suggestion I have heard in a long time. Alternatively, send them all a text/email asking them to confirm they have received it and name the tenants in order of the time they take to reply to you (if they reply!)
              '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


                #8
                Originally posted by Lawcruncher View Post
                As a matter of contract, and irrespective of whether or not he is a tenant, the fifth person named will have agreed to comply with the terms of the tenancy. However, if you want to be belt and braces about it, you can make the shiftiest looking applicant the fifth named tenant.
                Better: let to persons1-4 and allow them (by your written consent) to share occupation with named person5.
                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


                  #9
                  Many thanks all - this is extremely useful to know

                  So I guess I can proceed with a normal AST with 5 tenants, and the issue of 'legal estate' is more of that tenant's problem ? Jeffrey - why would letting to 4 only be better from my perspective?

                  either way, do I need a special contract or any sort of special conditions to deal with this?

                  Cheers

                  Comment


                    #10
                    Who ever prepares the tenancy agreement should be able to deal with it, but in braod terms, you would define all 5 as "the Tenant", and then in the interpretation section state that where the Tenant is more than one person, an obligation on the Tenant is to be construed as an obligation on each and all persons comprising the Tenant, with each and all being jointly and severally liable for the performance of that obligation.

                    Comment


                      #11
                      Originally posted by rathga View Post
                      Many thanks all - this is extremely useful to know

                      So I guess I can proceed with a normal AST with 5 tenants, and the issue of 'legal estate' is more of that tenant's problem ? Jeffrey - why would letting to 4 only be better from my perspective?

                      either way, do I need a special contract or any sort of special conditions to deal with this?

                      Cheers
                      Because, were I acting for person5, I would deny that my client is T (and therefore any action or omission by persons1-4 cannot make person5 jointly and severally liable with them).
                      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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