THESE GUYS? Part One
© Copyright 2002-2011 Landlord.com
What, exactly, is the legal
status of the people in my rental unit?
The answer to this question is important because
their legal rights, and yours, arise out of their status.
This is not just a matter of pedantry.
How one deals with a cotenant is very different from how one deals with
an assignee, for example. You will
not be able to understand how to deal with a problem unless you can accurately
classify the occupants. If you
cannot do this, there is no way you will be able to tell which rule of law,
advice column, or article from us applies to you.
Cotenants are created when they rent the premises
together at the same time, or one of them moves in later and there is agreement
among the landlord, the original tenant, and the new occupant, that he be a
cotenant. A subtenant is one who
makes an agreement with the original tenant for occupancy of the whole or a part
of the premises, either exclusively or jointly with the original tenant.
The original tenant is then often referred to as the "master
tenant." An assignee is one who takes over all the lease obligations
entered into by the original tenant. An
assignment takes place by agreement of the original tenant and the assignee.
An unauthorized occupant simply moves in in the absence of the original
tenant without any defined agreement with the original tenant and without notice
to the landlord.
While it is common for all cotenants to enter into
the same rental agreement at the same time, this is not always the case.
The key is that cotenants all have a rental agreement with landlord.
Unless it is explicitly agreed among all parties to the contrary, each
cotenant has all the rights and duties and the same rights of occupancy that all
the other cotenants have. They are,
in effect, partners in the tenancy. This
is true whether the agreement is in writing or oral, or not even explicit, but
Abercrombie owns a three-bedroom house in Sunnyvale that he rents to Bob
and Carol, husband and wife, under a written lease for two years.
Abe (that's what his friends call Abercrombie), Bob, and Carol all sign a
written lease to that effect, after which Bob and Carol move in.
This one is easy, Bob and Carol have both entered into an express rental
agreement with the owner, they share the same rights, and they are, therefore,
Don rents his four bedroom town home in Milpitas on a one year lease to
Elizabeth and Frank, who have a 17 year old son, Gerald, who lives with them.
Upon reaching 18, Gerald gets a job and starts contributing to
Elizabeth's and Frank's household expenses, but he never talks to the landlord
and never pays any money to him.
This one is also easy. Remember
that the key is the agreement. Elizabeth
and Frank are clearly cotenants, but Gerald is not because he has no agreement
with Don. He may have an agreement
with his parents (see below on subtenants), but that does not make him a
cotenant. If problems arise, Don
will have to be careful to treat Gerald according to his true legal status
because once he became an adult, he acquired certain legal rights.
Heloise rents her two-bedroom apartment in Stockton to Isaac and John.
They all agree to and sign a six-month lease, which automatically renews
from month to month on expiration. Isaac
is transferred to Racine by his company and moves out without telling anyone.
John moves in another roommate, Kyle, to share the rent.
Next month, Kyle goes to the rental office, hands the rent to the
resident manager, explains he is now living in the apartment with John, and is a
tenant there. No one gets around to
having Kyle sign a new rental agreement.
This is a common scenario. Note
that all parties have an agreement with the landlord.
Isaac and John were the original tenants but Isaac never got a release
from his obligations under the rental agreement.
He continues to be liable to perform all obligations under the agreement,
and has the undivided right with John to occupy it.
Kyle, on the other hand, never signed the original lease but nevertheless
has an implied agreement with the landlord, because he paid rent while he was in
possession of the unit, with the knowledge of the landlord's representative (the
resident manager). So Kyle is also
a cotenant. His obligations may not
be the same as the others, however. This
last will be discussed more fully below.
The key is the agreement with the landlord.
If the occupants all have an agreement with the landlord, they are
cotenants. In law, this is called "privity of contract."
If some do not, then they are something else, one of the categories that
we will now discuss.
The subtenant is a person who occupies, or has a
right to occupy, the rental unit through an agreement with the tenant who, in
turn, has an agreement with the landlord. The
key here is that the subtenant does not rely on an agreement with the owner, his
agreement is with the owner's tenant. While
in many cases there is an agreement with the owner that the subtenant can do
this (and sane property management requires such an arrangement be subject to
the landlord’s agreement), still, all the duties regarding subtenancy are owed
to the original tenant (or "master tenant" as the original tenant is
often called). If the subtenant
stops paying rent, the landlord has nothing to say about it. If the original tenant stops paying rent, the subtenant has
no legal obligation to pay it in his place.
In the absence of a written or oral agreement between them to the
contrary, the landlord and subtenant have no contractual obligations to each
Zelda rents her house in Santa Rosa to Yolanda.
Yolanda, in turn, rents the in-law unit in the basement to Xavier, who
pays Yolanda $300 a month rent for it. Yolanda
never mentions this to Zelda. Yolanda
stops paying rent and after three months, Zelda discovers Xavier there for the
first time. Zelda threatens to sue
Xavier for the three months of rent Yolanda has failed to pay.
Xavier moves out.
Even though Xavier has lived at Zelda's house for three months while
Yolanda failed to pay rent, Xavier is under no obligation to pay Zelda anything,
even if he knew Yolanda was not paying rent to Zelda.
The obligation to pay rent arises out of an express or implied contract
between the parties. Since there is
no contract, there is no obligation to pay rent.
Xavier is Yolanda's subtenant, and all his obligations are owed to her.
In most jurisdictions the subtenant is presumed to know all the terms of
the contract between the master tenant and the landlord.
So, if there was a no pet clause in the master agreement, Zelda could
evict both Yolanda and Xavier if Xavier brings his Schnauzer on the premises.
This is only because Xavier’s tenancy can be no less restricted than
Yolanda’s. In other words,
Yolanda cannot give Xavier the right to have his dog in the premises if Yolanda
does not herself have this right.
William rents a two-bedroom apartment in his complex to Victor.
Victor, in turn, sublets one of the bedrooms to Ulysses.
Ulysses and Victor pay a call on William's resident manager who runs a
credit check on Ulysses, finds him acceptable, and approves the arrangement.
Ulysses signs an agreement that if Victor fails to pay his rent, Ulysses
will guarantee any rent that goes unpaid. Everyone
lives happily ever after.
The change in detail does not effect a change in status.
Ulysses is still a subtenant. His obligation is not to pay rent, but to
reimburse William for any rent loss as a result of Victor's failure to pay. If Ulysses does not make good his guarantee, he cannot be
evicted for failure to pay rent (although there would be other good grounds to
evict him), and any effort to collect on the guarantee would have to be by way
of a separate action. If the
parties had agreed that the subrent to be paid by Ulysses to Victor should be
paid directly to William on Victor's default and notice, this still would not
change Ulysses’ status, but simply amount to an assignment of rent which would
be paid on Victor's account. If, on
the other hand, there were an agreement that the subrent was to be paid directly
to William all the time, this would probably convert Ulysses to a cotenant.
The key to a subtenant situation is that there is
no contractual relationship between the landlord (sometimes referred to as the
"overlandlord" in this setting) and the subtenant.
At common law, without an agreement to the
contrary, leases and rental agreements are freely alienable, that is, they can
be bought, sold and transferred. An
assignment results when the tenant, the "assignor," transfers to the
proposed new tenant, the "assignee," all his right, title and interest
in the lease or rental agreement. The assignee, in turn, assumes all the obligations which the
old tenant undertook, whether he knows them or not, and is
"subrogated," that is, stands in exactly the same position as the
original tenant. Absent an
agreement to the contrary, the original tenant gives up all his right to occupy
the premises, but he continues to owe all the duties of faithful performance of
the contract to his landlord. In
other words, he may have transferred his contract, but unless the landlord
agrees, he is not off the hook. The
new tenant owes no duty to the old tenant, except to perform all the terms and
conditions of the assignment (not the rental agreement).
This situation usually arises in the case of commercial leases, and then
in connection with the sale of a business.
In such cases the landlord is often locked into a long term lease with
terms favorable to the tenant, which cannot be matched in negotiating a new
lease. It does occasionally arise
in a residential setting, often being attempted in rent control situations.
Ron leases his ranch near Mountain Home to Steve on a three year lease
which prohibits assignment or subletting without Ron's prior consent.
After a year Steve decides he would rather move to Tahiti, and finds
Thomas, a frustrated stockbroker who wants to chuck it all, buy Steve’s
ostrich egg business, and take over the lease on the ranch.
They execute the sale papers, and go to Ron, who runs a credit check,
finds Thomas acceptable, and agrees in writing to an assignment of the lease.
Escrow closes and Thomas takes over, successfully marketing his product
as "an eight egg omelet in a shell."
By Ron's agreement to the assignment, Thomas has become his tenant.
All terms and conditions of the original rental agreement, including any
modifications, written or oral, are now Thomas's responsibility, whether he
knows of them or not. Steve, on the
other hand, is now fully relieved of all obligations of the tenancy, and no
longer has a right to go on to the ranch except as a guest.
Steve does, however, guarantee that all terms and conditions of the lease
will be fully performed by Thomas, and would be liable to Ron if Thomas's omelet
business bellies up and Thomas breaches the contract.
Assume that in the previous example, Steve retains a right to re-enter
the property if Thomas defaults on his lease (remember, by law he is still on
the hook if Thomas defaults). The
right of re-entry is part of the assignment to which Ron agrees.
"Eight egg omelets in a shell" is not very successful and
Thomas falls behind in the rent. Steve
gets wind of this and flies back from Tahiti, ejects Thomas and takes over the
business, paying rent to Ron.
Now the situation is different. Thomas
is clearly a tenant, because he has taken over the lease, but Steve, who has
exercised his right to re-enter and pay rent, now being back in possession, is
also a tenant, having assumed by this action all the rights and duties of a
tenant of the ranch. Ron may look
to either or both for full performance of the lease.
They have become cotenants.
The whole situation among Ron, Steve and Thomas is the same, but Steve
and Thomas forget to obtain Ron's permission before they close the deal for the
sale of the business. Thomas takes
over and is visited by a surprised Ron.
An assignment does not depend on Ron's agreement.
The assignment is complete at the time that it is made between Steve and
Thomas. Because Ron's lease prohibits an assignment without his
consent, he could, if he wishes, treat the assignment as a breach of the lease
and take appropriate action to evict, but that has nothing to do with the
efficacy of the assignment.
The key to understanding the assignment is that it
relieves the original tenant of all obligations under the original lease and
terminates his right to occupancy. He continues to guarantee faithful performance of the lease,
but this is not the same as being in a lease situation. The new tenant is not a subtenant, because he becomes a party
to the original lease and has a contractual relationship directly with the
When we discuss unauthorized occupants we do not
mean occupants unauthorized by the landlord.
Remember, neither assignment nor subletting require agreement by the
landlord. Such an assignment or
subletting may be wrongful, a breach of the rental agreement, but it is
effective when agreed to between the tenant and subtenant or assignee.
By unauthorized occupant, we mean a person who is there without the
agreement either of the tenant or the landlord.
This always arises in a situation when the occupancy of the premises is
in flux. The only circumstance we
can think of in which this would not be the case would be if the occupant forces
his way into the premises without the express or implied consent of the tenant
(otherwise it would be a subtenancy). Violence
like this is a police matter and outside the scope of this article. An unauthorized occupant in the true sense is a trespasser,
but although he is a trespasser, neither the landlord nor the tenant can remove
him if this might result in a breach of the peace.
The police can, but seldom will.
Oscar has had Penelope as a tenant for years on a month to month rental
agreement. Penelope gives notice to
Oscar that she is moving to take a new job.
Her notice expires while Oscar is taking a world cruise, and she moves
out, securing the rental unit as best she can.
After she moves, Penelope's ne'er-do-well brother, Quincy, forces his way
into the unit and resides there without utilities for two weeks until Oscar
returns. Oscar discovers Quincy when he inspects the unit, and Quincy
lies that Penelope said he could crash there.
Quincy refuses to move out.
This sort of thing happens occasionally, and often enough to merit some
discussion. Note that Quincy has
received no permission from anyone to move in.
Penelope is innocently working at her new job.
Oscar had nothing to do with it and was ignorant of Quincy's occupancy
until he inspected. Quincy is an
They key to understanding Quincy's position is the
absence of any agreement with any person to occupy the property, which is why he
is called "unauthorized." Quincy
has no rights in the premises at all, but that does not mean that the landlord
can simply send over a couple of thugs to kick him out.
This is so because the landlord still owes a duty to the law to proceed
without a breach of the peace.
Discussion of how the principles we have just discussed affect the
landlord in practice will be discussed in part two.