Chapter 8 Cotenants, Sublets, and Assignments

• Library: Every Landlord's Legal Guide (Nolo) (2020 Ed.)

CHAPTER 8 Cotenants, Sublets, and Assignments

Cotenants

Obligation for Rent

Violations of the Lease or Rental Agreement

Disagreements Among Cotenants

Domestic Violence Situations

When a Cotenant Leaves

What to Do When a Tenant Wants to Sublet or Assign

Create a New Tenancy

Allow a Sublet or Assignment

When a Tenant Brings in a Roommate

Giving Permission for a New Roommate

Preparing a New Rental Agreement or Lease

Raising the Rent

Guests and New Occupants You Haven't Approved

Short-Term Rentals Like Airbnb

Landlords' Concerns

Cities' Concerns

How to Find Your Local Laws and Other Legal Restrictions on Short-Term Rentals

FORMS IN THIS CHAPTER

Chapter 8 includes instructions for and samples of the following forms:

• Landlord-Tenant Agreement to Terminate Lease
• Consent to Assignment of Lease
• Letter to Original Tenant and New Cotenant

The Nolo website includes downloadable copies of these forms. See Appendix B for the link to the forms in this book.

Conscientious landlords go to a lot of trouble to screen prospective tenants. However, all your sensible precautions will be of little avail if unapproved tenants simply move in at the invitation of existing tenants. Not only is it possible that you'll have difficulty getting these tenants to pay rent or maintain the rental unit, but if they fail to do so, you might have an extra tough time evicting them.

This chapter helps you analyze your options when your tenant asks questions like these:

• "Can I sublet my apartment?"
• "May I get someone else to take over the rest of my lease?"
• "Is it okay if I move in a roommate?"

We also advise you on what to do when your tenant attempts to do any of the above without consulting you. Because the best defense is a good offense, we'll help you protect your interests from the outset by suggesting lease clauses that limit occupants and require your permission for subleasing or assigning.

In particular, this chapter explains:

• why everyone living in a rental unit should sign a lease or rental agreement
• the legal differences between sublets and assignments
• your right to prohibit sublets and assignments, including short-term stays, such as Airbnb rentals
• the legal and practical limitations of prohibiting sublets and assignments
• how to add a tenant to an existing tenancy, and
• how to deal with repeated overnight guests.

RELATED TOPIC

Related topics covered in this book include:

• Limiting how long tenants' guests may stay: Chapter 2 (Clause 3)
• Requiring your written consent in advance for any sublet or assignment of the lease or rental agreement, or for any additional people to move in: Chapter 2 (Clauses 1, 3, and 10)
• Your duty to rerent the property if a tenant neither sublets nor assigns, but simply breaks the lease: Chapter 14
• Returning security deposits when one tenant leaves but the others stay: Chapter 15.

CAUTION

New York tenants have special rights. By virtue of New York's Roommate Law (RPL § 235-f), New York tenants have the right to bring in certain additional roommates without obtaining the landlord's prior approval and subject only to any applicable local laws on overcrowding. If you own rental property in New York, be sure you understand this law before setting restrictions on tenants and roommates.

Cotenants

When two or more people rent property together, and all sign the same rental agreement or lease—or enter into the same oral rental agreement and move in at the same time—they are cotenants. Each cotenant shares the same rights, and each is legally responsible to the landlord to carry out all of the terms of the lease.

Obligation for Rent

Among themselves, cotenants may split the rent equally or unequally, depending on their own personal arrangement. However, any cotenant who signs a lease or rental agreement with you is independently liable for all of the rent. Landlords often remind cotenants of this obligation by inserting into the lease a chunk of legalese which says that the tenants are "jointly and severally" liable for paying rent and adhering to terms of the agreement (see "Joint and Several Liability," below). If one tenant can't pay rent a particular month or simply moves out, the other tenant(s) must still pay the full rent during the rental period.

Joint and Several Liability
"Joint and several" refers to the sharing of obligations and liabilities among two or more people—both as a group and as individuals. When two or more tenants are "jointly and severally liable," you can choose to hold all of them, or just one of them, responsible to pay rent and to abide by the rules of the tenancy.
That means you may demand the entire rent from just one tenant should the others skip out, or evict all of the tenants even if just one has broken the terms of the lease.
Clause 1 of the form lease and rental agreements in Chapter 2 makes cotenants jointly and severally liable. Cotenants are jointly and severally liable for rent and other obligations—even if your lease or rental agreement does not include this clause. Nonetheless, we recommend you include a "jointly and severally liable" clause to alert tenants to this responsibility.


EXAMPLE: James and Helen sign a month-to-month rental agreement for a $1,200 apartment rented by Blue Oak Properties. They agree between themselves to each pay half of the rent. After three months, James moves out without notifying Helen or Blue Oak. As one of two cotenants, Helen is still legally obligated to pay Blue Oak all the rent (although she might be able to recover James's share by suing him).
Blue Oak has four options if Helen can't pay the rent:

• Blue Oak can give Helen a written notice to pay up or leave (called a Notice to Pay Rent or Quit in most states), and follow through with an eviction lawsuit if Helen fails to pay the entire rent or move within the required amount of time (usually three to five days).
• If Helen offers to pay part of the rent, Blue Oak can legally accept it, but should make it clear that Helen is still responsible for the entire rent. It's important to make this clear, since it's common for one cotenant to offer only "my portion" of the rent, when in fact each cotenant (roommate) is liable for the entire rent.
• If Helen wants to stay and finds a new cotenant with a decent credit history, Blue Oak might not be able to withhold its approval of the new person and still hold Helen to her obligation to pay 100% of the rent. If Blue Oak accepts Helen's proposed roommate, it should, however, have the person become a cotenant by signing a rental agreement (as discussed below).
• If Helen wants to stay and proposes a cotenant who proves to be unacceptable to Blue Oak (because the applicant does not meet Blue Oak's usual credit or income specifications for every new tenant), Blue Oak may say "No" and evict Helen if Helen is unable to pay the entire rent.

Violations of the Lease or Rental Agreement

In addition to paying rent, each tenant is responsible for any cotenant's action that violates any term of the lease or rental agreement—for example, each cotenant is liable if one of them seriously damages the property or gets a dog despite a no-pets policy in the lease or rental agreement. This means you can hold all cotenants responsible and can terminate the entire tenancy with the appropriate notice, even though some of the cotenants objected to the dog or weren't consulted by the prime offender.

Sometimes only one cotenant breaks your rules (such as keeping a pet in violation of a no-pets lease clause), but the other cotenants are blameless. Naturally, you might want to get rid of the troublemaker only. But you generally can't do that (exceptions occur in some domestic violence situations, described below). That's because under the law, a joint and several contract can't be divided up ("bifurcated," in legalese). It's the flip side of being able to hold any one cotenant responsible for the entire rent. If one member of a cotenancy acts in a way that justifies termination, your only option is to terminate the entire tenancy.

However, if you want to retain the blameless cotenants (and are sure they can handle the rent), you can easily do so. Terminate the entire tenancy, then offer a new lease to the good tenants. Pay special attention to a situation involving domestic violence: In some states, laws allow the landlord to bifurcate the lease (evict only the violent cotenant) without terminating the lease of the victim cotenant. See "State Laws in Domestic Violence Situations," in Appendix A, for state rules.

Special Rules for Married Couples
We strongly recommend that everyone who lives in a rental unit—including both members of a married couple—be required to sign the lease or rental agreement. This underscores your expectation that each individual is responsible ("jointly and severally liable") for the rent and the proper use of the rental property.
If, however, you neglect to have either the husband or wife sign the lease, that person might still be directly responsible to you. That's because, in some states, a spouse is financially responsible for the necessities of life of the other, including rent.
But rather than counting on your state's law for protection, just put both names on the lease or rental agreement and make them each cotenants. And, if one of your tenants gets married during the lease term, prepare a new agreement and have both spouses sign it.

Disagreements Among Cotenants

Usually, cotenants make only an oral agreement among themselves concerning how they will split the rent, occupy bedrooms, and generally share their joint living space. For all sorts of reasons, roommate arrangements sometimes go awry. If you have been a landlord for a while, you surely know all about cotenants who play the stereo too loud, are slobs, pay their share of the rent late, have too many overnight guests, or create some other problem that their roommates can't abide. If the situation gets bad enough, the tenants might...