What’s Joint and Several Liability? i.e. Who’s responsible for paying what?

Posted on August 18, 2015

All for one and one for all! When leasing a place with friends, you are ALL responsible for the full amount of the lease.

Joint (or “co”) and several liability means that each tenant is responsible for the full amount of the entire lease obligation. This is the typical way leases are structured everywhere, and is how our own lease, that you executed with us, also reads. This also means, and this would be true pretty much anywhere you go where you share a lease, that you have only one account–one lease, one account, one big bucket that all the expenses and payments, even pre-payments, go into–which is exactly the nature of joint and several liability: all for 1 and 1 for all!

We do not bill individual amounts and we do not track individual amounts because our relationship is with you as a group and what you and your leasemates choose to do, how you divvy up payments, who pays a little more for a nicer room, whatever the deals are you work out, are absolutely none of our business. Most the time, people split rent evenly, but that’s up to you! As a courtesy, we usually allow you to make separate payments but keeping track of who has paid what is up to you, though we are happy to help.

I paid my “share,” why do I get late notices and do I owe money?

You and other people on your lease may be allowed to make individual payments. You personally may have paid all of what you and your friend’s decided was your fair share (usually the total amount divided by the number of people on the lease–though that is entirely up to you, of course!). However, that does not mean you do not owe any money….

As a group, you owe all the obligations due under the terms of the lease. It is solely up to you to track who owes what to whom and to divvy up, and correct, any overpayments or underpayments by specific people on your lease. We will help, and we will provide one no-cost ledger review session for when you run into issues, but, in the end, it’s up to you to keep good records.

If anyone is late on a lease, the whole lease is subject to late fees because everyone is jointly and severally liable (remember?) for the whole amount, regardless of who has paid what individually. This means that, for example, if your full rent installment on a 5 person lease is not paid by the due date you would begin to accrue late fees at $4 per person per day, so 5 days late would be $4*5*5 or $100 regardless of who paid what among yourselves. The key thing: if any of it is late, the entire account is late, and the fees apply. Please don’t be late! :-)

We moved out, I’ve paid my share, but my roommates haven’t. Am I done?

This is a variation on the above. Let’s say you’ve done a good job of staying up to date, but one of your friends (who shall remain nameless), well, not so much. At the end of the lease, you move out, and you personally owe nothing among your group but your group has a balance due of, say, $2000, because your buddy hasn’t gotten caught up. Who is responsible?

That would be all of you. And, not as a group, but individually as well. And if we have to file a court case, it will be filed against all of you. Any judgment, under co- and several liability, will be against all of you, and payable by any of you. This can be a huge deal for you if, for example, you are the first one who seeks a loan for something, say a new house! Whoever does that will find the judgment against them and will be unable to get it removed until it has been paid in full.

All for one and one for all!

In the end, it’s very important to understand that obligations under a lease are truly like the three musketeers: all for one, and one for all. Meaning, everyone is responsible for paying, even for the debts of one person on the lease, and, moreover, one person may be held responsible for the entire amount, all alone. It’s like one big bucket, and its your responsibility to determine who put what into the bucket, and who owes the bucket….