Landlords Should Treat Tenant Roommates As One Person

To Better Understand Joint and Several Liability and

Resolve Tenant Disputes

Posted By Tristan R. Pettit, Esq. On September 22, 2011 @ 5:28
pm In Collections,Joint & Several Liability,Rental
Agreements,Roommates,Security Deposit. I receive many calls
from landlords who have questions and concerns involving issues
involving their tenant roommates. While the problems are often
factually different the proper way to analyze the situation and
arrive at a resolution to the problem, often depends on the same
thing something called joint and several liability.
Joint and several liability is a legal concept that, according to
Blacks Law Dictionary
[1]
, is defined as the liability of co-
promisors of the same performance when each of them,
individually, has the duty of fully performing the obligation. A
liability is said to be joint and several when the creditor may
demand payment or sue one or more of the parties to such
liability separately, or all of them together at his option.
Confused yet? Let me try and explain joint and several liability
more clearly than Mr. Black
[2]
did.
Essentially joint and several liability means that each individual
tenant is responsible for the full amount of the rent as well as any
and all other obligations under the rental agreement.
I think it would be easier for landlords to comprehend the concept
of joint and several liability if they would just think of and treat
roommates as one person.
Here is an example:
A Landlord enters into a 12 month lease with Tenant A, Tenant B,
and Tenant C. The monthly rent is $750. The security deposit is
also $750.
The Landlord needs to remember that he has one lease with three
tenants NOT three separate leases with one tenant. As such all
three tenants are responsible for the full amount of rent. All three
tenants are responsible for abiding by the rules and regulations.
All three tenants are responsible for paying the security deposit.
All three tenants are responsible for paying the full amount of any
damages to the rental unit.
Instead of taking $250 from Tenant A, B, and C for rent (or the
security deposit), the landlord should insist that rent be paid via
one payment for the full amount. When landlords accept $250
from each tenant, the landlord is inadvertently telling the three
tenants that each of them is only responsible for 1/3 of the rent
that is wrong. Remember treat the roommates as one person
one person pays his entire rent not 1/3 of it.
I know many of you that have tenant roommates are thinking
that there is nothing wrong with accepting three separate checks
for $250 from your three tenants. You are correct, nothing is
wrong, there is nothing wrong with doing that . . . AS LONG AS
ALL OF THE TENANTS PAY RENT ALL OF THE TIME. But
problems arise is when one tenant falls on hard times and doesnt
have the money to pay rent. It is at this point that the other two
tenants start telling the landlord, well we paid my portion of the
rent so you cant evict us. WRONG.
Once again, think of roommates as one person. When you have
one tenant (no roommates), that tenant is responsible for paying
the entire amount of the rent not just a portion of it. The same
goes with roommates. One roommate is not just responsible for
paying 1/3 of the rent. Under joint and several liability, that one
tenant roommate is responsible for paying all of the rent if the
other tenants dont pay any rent. If Tenant A and Tenant B have
no money to pay rent, then Tenant C better rise to the occasion
and pay the full rent amount or else all three roommates can be
evicted.
Tenant roommates do not understand the concept of joint and
several liability. I believe it is in the landlords best interest to
take the time to teach his tenant roommates about joint and
several liability and how it specifically applies to them and their
roommate situation. The best way to do demonstrate joint and
several liability to your tenant roommates, after you have had the
discussion with them, is to make them write one check for rent. I
tell my roommate tenants that they must pay rent with one
check. I dont care who pays it but I will only accept one check
for the full amount of rent. The tenants can fight amongst
themselves as to how they divide up the rent amount or who
owes what to whom. How they do that should not be the
landlords concern. The landlord wants to impress upon his tenant
roommates that he expects the full amount of rent each month
and if they do that then they can remain as tenants. If not, then
they will be evicted.
So while it may seem a bit much to refuse to take more than one
rent check from tenant roommates, I believe by making the
tenants understand that they are not responsible for just a
portion of the rent, a landlord can avoid a lot of problems in the
future.
Lets turn our focus to tenant roommates and the security
deposit. If a landlord makes the mistake of accepting $250 from
each of his three tenant roommates to apply to the $750 total
security deposit, I believe that the landlord is sending his new
tenants the wrong message again. Whether he is aware of it or
not, the landlord has unintentionally informed his tenants that
each of them are only responsible for 1/3 of the security deposit
and therefore only responsible for 1/3 of any damage to the unit.
How many times have you heard one tenant say that the hole in
the wall was caused by the other roommate who came home
drunk one night and put his fist through the drywall? And then
the next comment out of that tenants mouth was, so you should
take the cost to repair that wall out of his portion of the security
deposit.
Each tenant is jointly and severally liable for paying the total
amount of the security deposit and for the total amount of any
damage caused to a rental property regardless of which tenant
caused the damage. A tenant roommate is not just responsible
for his portion of any damage. Under joint and several liability,
if the cost to repair the wall is $500 then the landlord can keep
$500 of the security deposit and the three roommates can fight
over how to split up the remaining $250.
What if your tenant roommates cause major damage to the rental
unit that goes well beyond the security deposit on hand. Lets say
the damages total $5,000. Under the concept of joint and several
liability, a landlord can choose to sue all three of the tenants for
the $5,000 or the landlord can choose to sue only two of them for
the $5,000 (the two that are gainfully employed, for example) or
the landlord could even opt to sue just one of the three
roommates for the entire $5,000.
Assuming the landlord could prove his damages and meet his
burden of proof, the court could rightfully enter a judgment of
$5,000 against only Tenant A, if that is the only tenant that the
landlord sued. This is true even if it was Tenant C that caused the
actual damage. The landlord could then pursue and collect the
entire $5,000 from Tenant A. It would then be up to Tenant A to
sue either Tenant B or Tenant C, or both, if he so chooses.
Please note that joint and several liability does not allow a
landlord to obtain a double or triple windfall. A landlord cant
sue each tenant individually for the full $5,000 and end up with
three judgments totaling $15,000. This is why the most practical
course of action is typically for the landlord to sue all three
tenants for the entire $5,000 and then decide which tenant is
more collectible (and often more responsible) and pursue the
collection of the judgment against only that one tenant.
Now, lets assume there is no damage to the rental unit after the
three tenants move out and therefore the entire security deposit
will end up being returned. How is the landlord to return the
security deposit? Under Wisconsin law, specifically Wisconsin
Administrative Code, ATCP 134.06(2)(d),
[3]
a landlord is required
to refund the entire security deposit in one check, draft or
money order made payable to all tenants who are parties to the
rental agreement unless the tenants designate a payee in
writing. So under ATCP 134.06(2)(d),
[3]
a landlord is required to
treat the tenant roommates as one person by sending them one
check made payable to all three of them. If a landlord ended up
writing three separate checks to each of the tenants for 1/3 of
the security deposit each, that landlord would be violating
Wisconsin law.
So, if a landlord treats his tenant roommate as one person, he
will not only be adhering to the concept of joint and several
liability, he will make his life as a landlord more simple. Landlords
should not have to get involved in trying to determine which
roommate did or didnt pay his portion of the rent nor should a
landlord be concerned with which roommate punched a hole in
the drywall during a drunken rampage. It is not our job as
landlords to be social workers and resolve disputes amongst
roommates. Nor is it our job to be the judge or jury and
determine which roommate was at fault. Fortunately, the concept
of joint and several liability allows a landlord the ability to avoid
all of that unnecessary drama.
NOTE: If the rental agreement you are currently using does not
indicate that all tenants are jointly and severally liability for all
obligations under the rental agreement, then it is not a well-
written rental agreement and is not worth the paper that it is
written on. If that is the case, you should tear it up at the first
possible legal opportunity i.e. once the term ends if it is a lease
or with 28 days notice if it is a month to month tenancy. You
should then purchase and start using a rental agreement that
states that all tenants are jointly and severally liable. I hear that
the Rental Agreement sold at Wisconsin Legal Blank Company,
Inc.
[4]
is a very good one someone told me that the author of it
is pretty knowledgeable about Landlord-Tenant Law.