What you need to know about taking in lodgers

If you have a spare room in your home, taking in lodgers can be a great way to boost your household income. Before a lodger moves in, it is crucial that you fully understand the legal implications of having someone pay to live with you.

 

What is a lodger?

 A lodger is someone who lives in your home with you and shares your living spaces. In most cases, a lodger will have their own room but will share your kitchen, bathroom or living room (or all three) with you.

 

How can I find a lodger?

Many people find lodgers by placing adverts in local newspapers or online.

If you are considering taking in a lodger, you could also ask friends or family members if they know somebody who is looking for a room to rent.

 

Taking in lodgers: do I need permission?

 If you are renting a property, you may need to get your landlord’s permission before taking in a lodger. Check your tenancy agreement for any clauses which refer to this.

 If you are a council tenant, you may have a legal right to take in a lodger. However, you may still have to inform your landlord, so it is always best to check your tenancy agreement.

If you own your own home and have a mortgage, you may need permission from your lender in order to take in a lodger.

 

Will I be able to get tax-free income by taking in lodgers? 

If you let out furnished accommodation in your home, you may be able to earn up to £7,500 per year tax-free. Take a look at our article on the government’s Rent a Room Scheme[1]  for more information.

 

What does taking in a lodger mean for my home insurance? 

Your home contents insurance may be affected by taking in a lodger. It is important to let your home insurance company know if you are thinking of renting out a room. Otherwise, your insurance policy may not be valid.

 

Make sure your home is safe if you are taking in a lodger 

It is vital to ensure that your home is safe for a lodger to live in. You must make sure that any gas appliances in your home are checked on a yearly basis by a Gas Safe engineer (if you are a renting your home, your landlord should already be doing this).

Also, any electrical appliances, such as your toaster, must be safe, as should the electrics in your home as a whole.

You should also make sure that any furniture complies with fire safety regulations.

 

You must check your potential lodger’s immigration status

 You have to check your potential lodger has a right to rent in the UK before renting them a room. Otherwise, you could receive a fine.

 

What rights does a lodger have? 

The way you share your home with your lodger will affect the type of tenancy they have and ultimately both your and their rights.

If your lodger lives in your home and you (or a member of your household) shares a living room, kitchen or bathroom with them, they will likely be viewed as an ‘excluded occupier’. This means you will only have to provide ‘reasonable notice’ (normally the length of the rental payment period) to end their time in your home and will not have to evict them through the courts.

If, however, your lodger lives in your home but does not share any living space with you or a member of your household, they are likely to be viewed as an occupier with basic protection. This means that if they do not leave when you ask them to, you may need to go to court in order to evict them.

 

Do I need a tenancy agreement to take in a lodger? 

It is always best to have the agreement between you and your lodger in writing. This way, you will both fully understand your rights and responsibilities and, should anything go wrong in the future, your agreement will be documented.

A tenancy agreement is not the right type of agreement for a lodger. Lodgers are not regarded as tenants and do not share the same legal statutory protections (see above). For a lodger, you will need a Lodger Licence Agreement. 

You can visit a solicitor or you can buy a Lodger Licence Agreement online. A Lodger Licence Agreement will set out the standard terms of the agreement between you and your lodger including rent amount, permitted usage of the room and other rooms in the house and any additional services and charges.

 

A Lodger Licence Agreement can easily be altered to suit your needs.

 

READ MORE: 5 Tips for Taking on a Lodger