Student Legal Services at Virginia Tech
Leasing Terms
|
- Terms |
JOINT AND SEVERAL LIABILITYThe phrase "Joint & Several Liability" is almost certain to appear in your lease. Example: "All lessees are jointly and severally liable for all obligations under this lease." This means that the landlord can choose to hold you, and only you, responsible for the rent and damages not paid by your roommates. If your roommate leaves town without paying for the holes he punched in the living room wall or without paying his last month's rent, the landlord could choose to sue just you for the amounts your roommate owes. If you pay the landlord, you can turn around and sue your deadbeat roommate for the money--but only if you can track him down. ATTORNEY FEESMost leases provide that the landlord can recover his reasonable attorney fees if he successfully sues you for breach of the lease. Some judges consider one-third to be a reasonable attorney fee. Thus, if your landlord proves you owe him $1000, he can tack on another $333 for his lawyer. The reverse is usually not true. Since leases are written by landlords, they usually don't contain provisions for allowing the tenant to recover attorney fees. Thus, if you sue the landlord because he never fixed the dishwasher, the lease usually won't allow you to add attorney fees to the amount you win. On the other hand, if your rental situation is covered by the Virginia Residential Landlord and Tenant Act and you are suing your landlord for certain major breaches such as failure to provide heat or water, the law will allow you to add on a reasonable attorney fee. GUARANTORSCollege students usually don't have a credit history, rental history, or proof of sufficient income to cover their rent payments. This makes renting to a 19-year old college student much more financially risky than renting to, say, a 40-year old, gainfully-employed lawyer with an excellent credit rating. If the landlord is forced to sue a college student for back rent or damages, the student usually won't have any wages to garnish or assets to seize. This makes getting paid rather difficult for the landlord. Thus, landlords want to be able to hold someone responsible--someone with a job and assets. The college student's parents usually fit the bill. The landlord can hold the parent responsible for the student's obligations by having the parent sign as a guarantor either on the lease itself or in a separate guaranty document. When a guarantor signs a guaranty, he guarantees that the principal's obligations to the creditor will be fulfilled. In a rental situation, the principal is the tenant and the creditor is the landlord. The guarantor essentially promises that all monies owed by the tenant to the landlord will be paid. A multi-tenant lease will often contain a signature page with two columns of signature lines, one column for the tenants and an adjacent column for the guarantors. There is an expectation that each parent signing as a guarantor will sign next to the line his son or daughter signs. This implies that the parent is guaranteeing only his son or daughter's share of the rent and damages; however, this implication is usually wrong. If the lease contains a statement such as "all tenants and guarantors are jointly and severally liable," each parent/guarantor is really guaranteeing to pay the other tenants' shares as well. This is essentially true even if the lease states only that "all tenants are jointly and severally liable." Why? Because each tenant is liable for the full obligation and the guarantor is promising to back that up. So if one tenant fails to pay his share of the rent, the landlord could, in theory, choose to sue one, some, or all of the other tenants and guarantors. In reality, if the landlord has to sue, he will usually try to sue all of the tenants and guarantors at the same time; however, if some of the tenants or guarantors can't be found or have declared bankruptcy, the landlord can choose to just go after the other tenants and guarantors. When a guarantor pays a debt properly owed by one of the tenants, it is sometimes--but not always--possible for him to sue the tenant for compensation (i.e. subrogation) or sometimes to sue the other guarantors for them to contribute their fair shares of the debt he had to pay (i.e. contribution). It depends on the exact situation and the terms of the lease or guaranty. In this situation, you should consult an attorney. A final note about terminology: Guarantors are sometimes called "co-signers" because they often sign the actual lease itself (along with the tenant) as opposed to signing a separate guaranty; however, a co-signer is really anyone who signs an obligation (such as a lease) along with another person. This might include two people who both sign a lease as tenants. They are co-signers and are jointly liable on any and all obligations under the lease. A guarantor might or might not be a co-signor. SUBLEASES, ASSIGNMENTS, NOVATIONS, RE-RENTALS, AND ROOMMATE CHANGESWhen you lease an apartment or house from the owner, you obtain a property interest in that apartment or house. You don't get all of the property rights of the owner, only some of them. For example, you can't sell or mortgage the property, but you can live there and prevent others from living there (assuming you have no co-tenants and aren't on an "individual lease"). Unless your lease prevents you from doing so, you can sublease or assign your interest in the premises to someone else. If you transfer your interests for only part of your remaining term, it is called a sublease. If you transfer your interests for all of the remaining term of your lease, it is called an assignment. Just like a lease, both types of transfer should be done in writing. If you sublease your interest to a sublessee (or sub-tenant), you become a (sub)landlord to the sublessee and legally stand between the sublessee and your landlord. If, instead, you assign your interest (to an assignee), you create a direct relationship between your assignee and landlord. The assignee pays rent directly to the landlord and the two may sue each other if either one breaches the lease. However, this doesn't let the original tenant completely off the hook. A landlord may still sue the original tenant (the assignor) for rent if the assignee fails to pay. If a tenant who has assigned his interest wishes to avoid his liability for rent not paid by the assignee, he must get a release from the landlord. If he does this at the same time as he makes the assignment, the entire process is known as a novation. This is usually what a re-rental is; however, the term "re-rental" isn't a legal term--it's just a term of convenience--and anyone involved in a re-rental should be sure that it really is a novation before agreeing to it. The phrase "roommate change" is another non-legal term that might be used to denote a novation. Again, make sure that's what it really is before agreeing to it. Even with assignments and subleases, don't rely on the title of the peice of paper you're signing. It's the actual terms of the agreement that decide what you're doing--not the name that the parties choose to (mistakenly) call it. INDIVIDUAL LEASESLandlords sometimes offer what they call an "Individual Lease" to tenants. For example, the landlord of a four-bedroom apartment might sign separate individual leases with each of four tenants, giving each tenant the exclusive right to use one bedroom and a joint right with the other tenants to use the common areas of the apartment. Generally, each lease will make that lease's tenant jointly and severally liable for damages to only the common areas of the apartment. The tenant would be individually liable for her own rent and damages to her own bedroom, but wouldn't be liable for the rent of the other tenants or any damages they do to their bedrooms. This significantly lowers each tenant's potential liability for breaches by the other tenants; however, each tenant will usually pay more in rent than she would pay in a normal rental situation. One drawback to individual leases (unless the lease contains a clause to the contrary) is that tenants don't have any control over who their roommates are. If you and three friends sign individual leases for a four-bedroom apartment and one of your friends decides not to return to school in the Fall, the landlord might find a substitute tenant to take your friend's place or your friend might sublease to someone else. You would have no control over who moves in or even what gender that person is (unless your lease says otherwise). If your potential landlord tells you not to worry, that he'd never put someone of the other gender in your apartment, make sure it says so in the lease. (Remember: Always get it in writing!) Another problem to look out for is a landlord who doesn't know how to write an individual lease. Be sure that the leases of the other tenants explicitly state that they are individual leases and that they are for only one bedroom and joint use of the common areas in the unit. Make sure that your lease limits your liability to only your share of the rent and damages to your bedroom and the common areas. Some inexperienced landlords have used generic leases as individual leases without tailoring them to the situation. This results in landlords renting the entire apartment (as a whole) to each tenant and holding each tenant jointly and severally liable for the other tenants' rents and damages. Be careful what you sign up for!
DISCLAIMER: The information provided on this website may not be current or valid. You must not rely on the information contained here without first speaking to a licensed attorney. Always speak to a licensed attorney regarding any legal issue you may have. |
This page is located at http://www.legal.sga.vt.edu/leaseterms.htm.
This page was last updated July 11, 2006.