Tuesday, August 12, 2014

Joint Liability of Tenants

It is not uncommon to encounter a situation when two or more original tenants under a single lease agreement would act differently, and then expect different treatment by the landlord. A non-defaulting co-tenant might want to disassociate from a defaulting one. And, sometimes, a defaulting tenant would like to take all the liability on his or her own, in an effort to save other co-tenants from being held liable alongside with the defaulter. The outcome for such intentions may be decided based on the text of the lease.

Particularly, the liability clause. It worth to check if the tenants are held jointly and severally liable under the lease. If the clause is present, the landlord may hold each and every tenant liable for only one co-tenant's fault. But the absence of the clause is not the end of this inquiry--the next item to check is whether the language of the lease affirmatively waives joint liability in any of the lease obligations, or, whether there specific and separately defined liability is assigned to any particular co-tenant.

This situation being rare, tenants are generally seen "united" in their promises made under the lease and receive an undivided benefit of the premises' possession. Civil Code, Section 1659, holds that the parties' liability is presumed to be joint and several. Compare this rule with the Civil Code, Section 1431, which extends the joint presumption over both the obligations and the rights. According to the California Law Review, Vol. 29, No. 6 (1941), the rule was generally developed by the courts of equity, in order to have a joinder of parties to resolve the whole controversy in one action.

According to the decisions I located, the court will first read the lease and then presume tenants' joint liability, unless it is expressly stated otherwise in the contract. In the landlord-tenant setting, the relationship is contractual, and the presumption of joint liability "must control" under CC 1659, in the absence of evidence showing a contrary intention of the parties. De Angeles v. Cotta, 62 Cal.App. 691, 692 (1923). Death of a co-tenant does not cut liability of the surviving co-tenant. Wood v. Longyear, 197 Cal. 723 (1925).

However, there is an exception carved out for non-contractual obligations. Non-economical damages under such obligations are not administered jointly. CC 1431.2. This argument may come up in tenant's defense against tort damages, but not just there. I have mentioned "original" tenants at the beginning for a reason--subsequent tenants are often deemed in privity relation with the landlord by privity of estate, not privity of contract. This is especially a sensitive topic for rent-controlled cities like San Francisco, where the issue of replacing original tenants is highly debated and where two different sets of rules co-exist: the citywide Rent Ordinance and the statewide Costa-Hawkins act. I wrote a post about it a year ago, it contains links to interesting articles covering different angles of the problem.


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