Assignment, and replacing a tenant properly

A housemate is leaving and somebody else wants the room. Everyone calls this a swap. Legally it is one of three quite different events, and which one occurred determines who is liable for the property afterwards.

Nobody chooses deliberately. The route taken is usually whichever one required the least paperwork at the time, and the consequences surface much later.

The three routes

They are distinguishable by what happens to the original agreement.

Assignment. The outgoing tenant transfers their interest in the tenancy to the incoming person. The agreement itself continues; the identity of one party changes. The incoming person steps into the position the outgoing one held — the same term, the same rent, the same obligations — and in most systems the landlord’s consent is required, because a landlord contracted with particular people.

A new agreement. The existing tenancy is brought to an end and a fresh one granted to the new combination of people. Everything restarts: term, rent, deposit arrangements, and the obligations. This is often the cleanest route and it is also the one that resets things the remaining occupants may not have wanted reset, including a fixed term they were most of the way through.

Nothing. The new person moves in, pays their share to the others, and the agreement is untouched. The outgoing tenant commonly remains a party and remains liable, and the incoming person is an occupant with no position under the tenancy. This is by far the most common route and the reason the previous two are worth distinguishing.

What assignment carries with it

More than the right to occupy, which is the part that surprises incoming tenants.

An assignee generally takes the tenancy as it stands. That includes the remaining term rather than a fresh one, the existing rent, any accrued state of affairs the agreement attaches to the tenancy, and the obligations as written. It is not a new arrangement negotiated by a new person; it is somebody else’s arrangement, continued.

What happens to the outgoing tenant’s liability varies and is worth pinning down rather than assuming. Assignment with consent commonly releases them going forward, but not always, and not always in respect of what accrued before. Some systems and some documents keep an outgoing tenant answerable in defined circumstances. A release is a thing that either was or was not given, and it is the sentence to look for in whatever was signed.

Where liability is joint and several, the same question applies to everyone who stays: the remaining tenants continue to hold the whole obligation, and now they hold it alongside somebody the group may or may not have chosen.

Because a party cannot be substituted into a contract by one side alone.

That is the underlying principle and it explains a great deal of what people find frustrating about the process. Two housemates can agree entirely sincerely that one is taking over from the other, and that agreement is real between them, and it does not change who the landlord’s counterparty is. An agreement between occupants cannot move anyone in or out of a tenancy for exactly this reason.

Landlords therefore hold a genuine veto, and their conditions are usually procedural: they want to check the incoming person, they want the paperwork done in a particular form, and they may want their reasonable costs of doing it. Whether a refusal can be challenged depends on how the agreement is worded and on local rules, in much the same way as refusal of consent to sublet does.

What turns on it

WHAT TURNS ON IT — which route was used

  · Assignment with consent
                    → the agreement continues with a
                      different party in one position

  · A new agreement
                    → everything restarts, including
                      the term and the deposit
                      arrangements

  · An informal swap
                    → the outgoing tenant commonly
                      stays liable; the incoming person
                      holds nothing

  · "I found a replacement, so I am out"
                    → NOT SO. Only a release by the
                      landlord ends being a party.

  · The deposit
                    → generally still connected to the
                      original parties unless it was
                      formally dealt with

  · Whether consent can be refused, and what
    formalities apply
                    → VARIES. Requirements for a valid
                      assignment differ substantially;
                      a local service can identify them.

The deposit is the part that unravels years later

Because it sits still while the household changes around it.

A deposit taken at the start of a tenancy is generally held in relation to that tenancy and those parties, in whatever manner local rules prescribe. An informal swap does nothing to it. Several swaps later, the sum being held may be connected to people who left long ago, and the person entitled to receive it back at the end may be someone nobody currently in the house has met.

Where the room changed hands informally, the incoming person typically paid their money to the outgoing one rather than to the landlord. That payment is an arrangement between two individuals; it is not a deposit held under the tenancy, and it does not give the payer any claim on the sum the landlord holds. How a deposit works as a legal object is the part that makes this tangle explicable.

Reading which route you took

Answerable from documents, and the absence of documents is itself the answer.

If a deed or written assignment exists, naming the outgoing and incoming parties and consented to by the landlord, that is an assignment. If a fresh agreement was signed by everyone currently in the house, that is a new tenancy. If the only artefacts are messages between housemates and a change to a standing order, nothing formal happened, and the original agreement is still the operative document with the original names on it.

That last case is not a disaster and it is extremely common. It is simply a different legal position from the one the occupants believe they are in, and the belief tends to be corrected by a letter about arrears or a dispute about a deposit rather than at a convenient moment. Who is currently a party to what is the question that resolves it.

The two relationships

Occupant and landlord is where substitution happens or does not. Only the landlord can release a party or accept a new one, and only a document has that effect.

Between the occupants, a swap is entirely within their control: who takes the room, what they pay, whether the outgoing person is reimbursed for anything. That arrangement binds the people who made it and supports an ordinary claim between them if it is broken. What it cannot do is make anyone a tenant or stop anyone being one, and treating a domestic handover as a legal one is the mechanism by which people end up liable for houses they left.

Where this stops

Whether an assignment was validly effected, whether an outgoing tenant was released, what formalities your jurisdiction requires, and how a deposit should have been dealt with on a change of parties are all local questions turning on documents.

If a swap is being planned, or an old one has just produced a demand or a deposit dispute, the categories of help are a tenant advice service, a housing charity, a tenancy tribunal or board, or a solicitor. Bring the original agreement, anything signed since, and a list of who actually lived there when — that chronology is usually what the answer depends on.