Joint and several liability in rental agreements

Joint and several liability in a lease agreement is a common contract form in Switzerland, especially for shared apartments or when several people jointly rent commercial premises. But what exactly does this term mean and what are the consequences for the involved parties? This article highlights the most important aspects regarding joint and several liability in tenancy law.

The joint renting of office or commercial spaces often offers financial and practical advantages. Companies can share costs and benefit from larger, more attractive premises that might be unaffordable for a single tenant. Couples or partners in a flatshare experience similar benefits in the private sphere. However, a joint signature on a lease agreement is usually associated with the so-called joint and several liability, a legal construct with far-reaching consequences. For landlords, joint and several liability in the lease agreement provides increased security, as multiple parties vouch for the fulfillment of the contractual obligations. For the tenants, however, it means mutual responsibility, which requires a high degree of trust and clear internal arrangements. In the following, the core aspects of joint and several liability are explained in detail.

Definition of Joint and Several Liability

To understand the scope of joint and several liability, a clear definition is first necessary. In the Swiss Code of Obligations (CO), joint and several liability is regulated in Articles 143 et seq. It states that several debtors (in this case, the tenants) are liable to the creditor (the landlord) for the entire debt in such a way that the creditor can demand performance from each individual debtor in whole or in part. All debtors remain obligated until the entire claim is settled.

In concrete terms, this means for a lease agreement: If several people sign the contract as main tenants, they become joint debtors. In this case, the landlord has the right to demand the fulfillment of all contractual obligations in full from each individual tenant – in particular the payment of the entire rent and the ancillary costs as well as the liability for any damage to the rented property. It does not matter how the tenants have divided the costs internally or who caused any damage. The landlord can turn to the tenant who appears to be the most solvent or the easiest to reach. This regulation primarily serves to protect the landlord, thus minimizing their risk of payment default. Only when the landlord has been completely satisfied are all joint tenants released from their external obligation.

Joint and Several Liability in Renting

Joint and several liability means that each individual tenant who has signed the joint and several liability lease agreement is liable for the payment of the entire rent, not just for their presumed share. For example, if a flatmate in a three-person shared apartment does not pay their share, the landlord can demand the outstanding amount from the other two tenants. They are then obligated to settle the missing amount to avoid rent arrears and possible legal consequences such as termination.

This joint and several liability for the rent exists regardless of whether a tenant is actually still using the premises. Even if a joint tenant moves out prematurely without the lease agreement being formally adjusted, their liability for the rent and other obligations under the contract remains in effect until the tenancy is properly terminated or they are legally released from the contract. This underscores the necessity of clear internal agreements among the joint tenants and a careful examination of the situation before entering into a joint and several liability lease agreement.

Internal Right of Recourse Among Joint Tenants

Although externally each tenant is liable for the entire debt, the law provides for compensation in the internal relationship between the joint tenants (Art. 148 CO). If a tenant has paid more than their actual share of the rent or the repair of damages, they can reclaim the share attributable to the other joint tenants from them. However, this so-called right of recourse must be enforced by the paying tenant themselves against their co-tenants. The landlord is not involved in these internal disputes. It is highly recommended to make written agreements on the internal division of costs and the procedure in the event of payment defaults by individual members already when concluding the lease agreement or establishing the tenant community. Such agreements can help avoid later disputes and financial bottlenecks.

Rights and Obligations of Joint and Several Liability

In addition to the main obligation to pay the rent, a joint and several liability lease agreement gives rise to further rights and obligations for the tenant community. In principle, all joint tenants have the same rights of use to the rented property, unless otherwise stipulated in the contract or in an internal agreement. Each tenant is also obligated to use the rented property carefully and to be considerate of the other tenants as well as the neighbors.

Important decisions affecting the tenancy must generally be made jointly and communicated uniformly to the landlord. This includes, for example:

Termination of the lease agreement: A termination is only valid if it is signed by all tenants named in the contract or if one tenant has been authorized in writing by the others to give notice on their behalf as well. A unilateral termination by only one tenant is invalid and does not end the tenancy.
Consent to contract changes: If the landlord wishes to change the contract (e.g., a rent increase) or if a tenant wishes to leave the contract and be replaced by a new one, this requires the consent of all contracting parties – i.e., the landlord and all joint tenants.

If one of the joint tenants causes damage to the rented property, all tenants are again jointly and severally liable to the landlord for repairing this damage. The landlord can claim the costs from each individual tenant, regardless of who actually caused the damage. Here too, the internal right of recourse of the paying tenant against the actual causer then applies again.

Dissolution and Modifications of Joint and Several Liability

Terminating or changing a lease agreement with joint and several liability can be complex, especially if the circumstances of one or more tenants change, for example through separation, moving out, or financial difficulties.

As already mentioned, an ordinary termination of the tenancy is only possible by all tenants jointly. If only one tenant wishes to leave the contract while the others want to continue the tenancy, there are several possible solutions:

Amicable contract amendment: The most optimal solution is a written agreement with the landlord and the remaining tenants, by which the departing tenant is released from the contract and, if necessary, replaced by a new tenant. However, the landlord is not obligated to agree to such a contract amendment unless a reasonable and solvent replacement tenant is provided who is willing to enter into the contract under the existing conditions.
Subletting (with the landlord's consent): Another possibility could be that the moving-out tenant sublets their share with the landlord's consent. However, they then remain the main tenant and are jointly and severally liable. This variant is often only a transitional solution.
Joint termination and new conclusion: If no agreement can be reached on the departure of an individual tenant, often the only option left is the joint termination of the entire lease agreement by all joint tenants. The remaining parties could then try to conclude a new lease agreement with the landlord.

It is important to understand that a tenant who simply moves out without having obtained a formal release from joint and several liability remains liable for all obligations. This applies even if they have informed their flatmates and the landlord of their move out. Only a legally valid contract amendment or termination releases them from the obligations.

For commercial lease agreements, there is also the special regulation under Art. 263 CO, which allows the tenant of commercial premises, under certain conditions, to transfer the lease to a third party if the landlord consents in writing. The landlord can only refuse consent for a valid reason. However, the transferring tenant is jointly and severally liable with the new tenant for the obligations under the lease agreement until the time the lease ends or can be terminated according to the contract or law, but for a maximum of two years.