Termination of Tenancies for Tenant Default - Law Commission

5.80 The concern of those who did not support the proposal centred on the potential
prejudice to the landlord. It was felt that the position of landlords would be
weakened, “as not only would they have failed to regain possession but they
would also have lost one or more of the original joint tenants, [thereby] reducing
the number of people liable under the lease”. 61 Herbert Smith proposed that it
should be assumed that the joint tenant would remain liable under the obligations
of the tenancy for breaches committed after they had been released, as if they
had entered into an authorised guarantee agreement under the Landlord and
Tenant (Covenants) Act 1995.
Reform recommendations
5.81 We have reviewed the treatment of joint tenants set out in the First Report. We
now consider that there are two distinct issues that need to be addressed. The
first issue is whether, where the tenancy or a qualifying interest in the tenancy is
held jointly, all those who hold the interest in question must act in unison before
the court can consider their response to termination action taken by the landlord.
This is the case under current law but, as explained above, has long been
identified as a defect that should be remedied.
5.82 We intend to recommend that, where two or more persons constitute the holder
of a tenancy or of a qualifying interest in a tenancy, the court may consider an
application for a “joint tenancy adjustment order” by fewer than all of the holders
of that interest.
5.83 The second issue that this recommendation raises is the potential problem
identified in the First Report: that an “unwilling” joint tenant of the tenancy or a
qualifying interest in the tenancy will remain bound by obligations under the jointly
held interest in circumstances where he or she would not be had that interest
been terminated. We no longer consider this to be a reasonable justification for
refusing ever to allow one or more joint tenants to act to protect their interest in
the tenancy. As explained in the First Report, an “unwilling” joint tenant would not
otherwise be able to escape the obligations imposed by the tenancy without the
landlord’s consent.
5.84 However, we do accept that there may be circumstances in which it would be fair
to release an “unwilling” joint tenant from future liabilities. We are therefore of the
view that the court should have a power, in appropriate circumstances, to make
an order to this effect. We call this a “joint tenancy adjustment order”.
5.85 We have carefully considered the concerns of consultees regarding the potential
prejudice to the landlord where such a release is facilitated. The court will not
make such an order unless it is satisfied that the landlord will not suffer any
prejudice as a result. Where there is the potential for prejudice, this can be
mitigated by the court requiring, as part of the order, that the applicant provide
security for the continued performance of his or her obligations. As we discuss
below, 62 we recommend that the court should have a general power when
61 Response of the British Property Federation and PruPIM.
62 Paras 5.91.
93