Parents often unaware of tenancy agreement pitfalls

University students all over the country are coming out of their first year in halls and happily signing up to tenancy agreements on student houses in preparation for the coming academic year in September. Virtually all will be asked in their tenancy agreement to commit to “joint and several liability”, which, according to John Foster, property partner with corporate law firm Shulmans LLP Solicitors and a specialist in student accommodation, means each student assumes full individual responsibility for everything in the tenancy agreement, even in the event of departures or defaults by their housemates.

Landlords nearly always require their parents to act as guarantor for their rent. If the student chooses to live in a house with, say, seven others, at an average cost of £90 per week – often for a full 12 months even if the students only live in during the term time – then that parent will be guaranteeing a figure over £30,000, not to mention damage and other claims.

And John explained that this is only one concern. “I’m afraid it gets worse,” he said. “While the tenancy agreement will often impose on the tenants full responsibility for repair and upkeep, in many instances this obligation will not exclude damage by insured risks. I have such a document in front of me where there is no obligation on the landlord actually to insure the property.”

According to John the worst case scenario can be truly frightening. “The property burns down, it is uninsured and the landlord sees you as the easiest and most effective target. In strict law you will have to meet the cost of repairing the premises entirely, with no recourse against your child’s now absent housemates or their guarantors.

“In the way that these things are done it is not feasible either in cost or time to seek to negotiate the tenancy agreement, nor to seek counter-indemnities from the other housemates or their parents. Often your child is desperate to commit to the property and to his/her best friends and will bring to bear the pressure that only children can. One bout of very loud tears over the telephone was enough to make me sign up; happily none of the above came to pass, but this did not make it risk free.”

Unfortunately, this is a situation to which there is no practical or feasible answer; the best you can do is to get assurances, often telephoned, but better in writing or email, that the landlord has got the property insured on terms where the insurer cannot then sue the tenants for breach of covenant. You should also seek confirmation from your fellow guarantors that they will reimburse you if you are the landlord’s unlucky victim, in the event of their own child’s default, or in the event of your guarantee being called before theirs to make good any disastrous consequences of a wild student party. If the Landlord is affiliated to it, you can also check with the University’s accommodation department, to see if the Landlord’s terms depart from any agreed protocol, or to check that the Landlord is basically sound and responsible.

But, as John warns, this is only comfort, not legal protection, as he knows from personal experience. “I tried to negotiate the guarantee wording to limit its scope, but heavy demand from other students meant the Landlord could flatly refuse.”