This information is for private landlords.
If you’re renting to more than one tenant in a joint tenancy, dealing with deposits is slightly different. You’ll still need to protect the tenancy deposit but it can involve a little more coordination.
Dealing with the lead tenant
In a joint tenancy, the full deposit is usually protected as a lump sum.
One tenant must act as the lead tenant and they are responsible for:
- asking for the deposit back when the tenancy ends
- disputing any deductions from the deposit
- distributing the returned deposit amongst other tenants
You and your tenants can decide who will be the lead tenant. You can change the lead tenant during the tenancy but you will need to show that the other tenants agree to this.
Returning a deposit to joint tenants
If the deposit is in the custodial scheme, either you or your tenants can ask for it to be returned. You’ll need to say how you think it should be distributed between the joint tenants.
The scheme will let your tenants know what you propose. The lead tenant can either agree or suggest an alternative split.
If the deposit is in the insurance scheme, the lead tenant should ask you directly for the deposit. If there is a dispute, the lead tenant can contact the scheme.
Dealing with changes and replacement tenants
If a tenant moves out and a new tenant moves in, this creates a new tenancy.
When this happens, you should:
- ask the outgoing and incoming tenants to 'surrender' the old tenancy
- set up a new tenancy with the remaining and incoming joint tenants
- inspect the property for any damage
- end the protection on the old deposit
- protect the deposit immediately with the details of the new tenancy
This will avoid confusion and a potential penalty for not protecting the incoming tenant’s deposit.
Relationship breakdown between joint tenants
Dealing with deposits when joint tenants split up can be complicated.
Your tenants may want:
- to end the tenancy early, or
- for one tenant to remain and continue with the tenancy
If one tenant leaves without giving written notice, you can hold both tenants responsible for unpaid rent or damage.
This is because joint tenants are usually 'joint and severally' liable. This means they are both responsible for any debt or damage until they end their part in the joint tenancy.
If your tenants decide to end the tenancy, you’ll need to deal with the lead tenant to return the deposit.