Renting with Roommates: Joint and Several Liability in New Zealand Tenancies
When multiple people choose to rent a property together in New Zealand, they often enter into a single tenancy agreement as co-tenants or roommates. In such arrangements, a key legal principle known as joint and several liability typically applies. Understanding this principle is crucial for all tenants involved.
What is Joint and Several Liability?
Joint and several liability means that each tenant is individually responsible for the entire amount of any obligation under the tenancy agreement, and collectively they are also responsible for the entire amount. This principle arises from general contract law and is applied to tenancy agreements where multiple parties are named as 'the tenant'. While the Residential Tenancies Act 1986 does not explicitly use the term 'joint and several liability', the obligations placed on 'a tenant' in sections such as s 39 (tenant's responsibilities) and s 40 (payment of rent) mean that where multiple individuals are named as tenants on a single agreement, they are generally treated as being jointly and severally liable for those obligations.
This means that if, for example, the rent is not paid in full, the landlord can legally demand the entire outstanding amount from any one of the tenants, from some of them, or from all of them. The landlord does not have to pursue each tenant for only their 'share' [Source: The principle of joint and several liability arises from general contract law, which applies to tenancy agreements. The obligations of tenants are set out in the Residential Tenancies Act 1986, s 39 and s 40].
Implications for Tenants
This principle has several significant implications for tenants renting with roommates:
- Rent Payment: All named tenants are equally responsible for ensuring the full rent amount is paid on time. If one tenant fails to pay their share, the other tenants remain liable for the shortfall. The landlord can seek the total overdue rent from any one of the tenants [Source: Residential Tenancies Act 1986, s 40].
- Property Damage: If damage occurs to the property beyond fair wear and tear, all named tenants can be held responsible for the cost of repairs, even if only one tenant caused the damage [Source: Residential Tenancies Act 1986, s 39(2)(b)].
- Breaches of Agreement: Any breach of the tenancy agreement by one tenant can be considered a breach by all tenants, potentially leading to consequences for everyone on the agreement [Source: Residential Tenancies Act 1986, s 39].
- Continuing Liability: If one tenant moves out, their liability under the original agreement typically continues unless a formal change to the tenancy agreement is made and agreed upon by the landlord and all remaining tenants (e.g., through a tenancy assignment or new agreement) [Source: Residential Tenancies Act 1986, s 42, s 42A].
Bond and Multiple Tenants
The tenancy bond, which is typically lodged with Tenancy Services, is held for the entire tenancy, not for individual tenants. When multiple tenants are on an agreement, the bond is usually treated as a single amount [Source: Residential Tenancies Act 1986, s 18].
- Bond Claim: At the end of the tenancy, if there are issues such as unpaid rent or property damage, the landlord can make a claim against the entire bond. All tenants named on the bond lodgement form (or a representative) must agree to how the bond is disbursed, or Tenancy Services will make a determination if there is a dispute [Source: Residential Tenancies Act 1986, s 22].
- Tenant Changes: If a tenant moves out and is replaced by another, it is common for the outgoing tenant to privately arrange their share of the bond with the incoming tenant. The bond lodged with Tenancy Services generally remains in place until the end of the entire tenancy, unless all parties (landlord and all current tenants) agree to a bond refund and re-lodgement process, or a change of tenant form is submitted [Source: Residential Tenancies Act 1986, s 22].
Exiting a Tenancy with Roommates
If one tenant wishes to leave a fixed-term tenancy, or if tenants wish to end a periodic tenancy, specific procedures must be followed:
- Fixed-Term Tenancy: A fixed-term tenancy can generally only be ended early by mutual agreement of the landlord and all tenants, or by applying to the Tenancy Tribunal for an order to end the tenancy due to severe hardship [Source: Residential Tenancies Act 1986, s 66]. If one tenant leaves without following proper procedures, they may still remain liable under the original agreement, and the remaining tenants will continue to be jointly and severally liable for all obligations.
- Periodic Tenancy: To end a periodic tenancy, the tenant (or tenants) must give the landlord at least 21 days' written notice, or the landlord must give the tenant specific notice periods depending on the reason (e.g., 90 days for no cause) [Source: Residential Tenancies Act 1986, s 51, s 52]. If only some tenants wish to leave, the landlord may agree to amend the tenancy agreement or require a new agreement with the remaining tenants and any new occupants.
When to Seek Independent Legal Advice
Navigating tenancy issues involving multiple tenants and joint and several liability can be complex. Individuals seeking clarity on their specific situation, or who are involved in a dispute with a landlord or co-tenants, may find it beneficial to consult with an expert. Information about tenancy law is available from official government agencies. Free legal advice can be accessed through Community Law Centres located throughout New Zealand.
Key Resources
- Tenancy Services: https://www.tenancy.govt.nz
- New Zealand Legislation (Residential Tenancies Act 1986): https://www.legislation.govt.nz/act/public/1986/0120/latest/whole.html
- Community Law Centres Aotearoa: https://communitylaw.org.nz/