Rent a Room Scheme - Advice Required

Gwhiz

Hi Guys,

My ex wife will be taking in a lodger tomorrow at £450 a month. The agreement (verbal at present) is that this is for 6 months.

Does my ex need (and does one exist) a standard written agreement or is she safe doing this verbally - i.e. if she wants the lodger out at any stage are there any complications - as with an AST where a Section 21 is needed etc?

Also.... is the RARS based on 12 months average or is the £4250 threshold a total amount in a year (I ask because 12 months at £450 is £5400).

Many thanks!

poppysarah

She should explain and write down house rules before having made the agreement.

Gwhiz

poppysarah wrote: »

She should explain and write down house rules before having made the agreement.

I understand that. My question is about LEGALITIES - i.e. does the lodger have any tennancy rights as they would under an AST or could the ex just ask her to leave at any time without comeback?

Jowo_2

You should not issue an AST to a lodger (i.e. someone who lives with the landlord and shares amenities) - they are for tenants who have live out landlords and can advertently give the lodger security of tenure.

It is best to have a signed written agreement to prevent disputes and to formalise the notice period by both parties.

Have a look at the Landlordzone website for info on how to select lodgers and the rent a room scheme

Gwhiz

Jowo wrote: »

You should not issue an AST to a lodger (i.e. someone who lives with the landlord and shares amenities) - they are for tenants who have live out landlords and can advertently give the lodger security of tenure.

It is best to have a signed written agreement to prevent disputes and to formalise the notice period by both parties.

Have a look at the Landlordzone website for info on how to select lodgers and the rent a room scheme

Not using an AST if you read the post. No one wants to answer the simple question it seems

The lodger is a good friend of my ex but we JUST wanted to know if there were any pitfalls to be aware of at a top level (legal stuff) before I read all the forum stuff.

Fire_Fox

Legally you don't need a formal/ written lodger agreement but you would be foolhardy to rely on a verbal agreement which could easily be misunderstood (does the rent include bills? What about overnight guests?). If things go pear-shaped and one needs to take the other to the small claims court for missed rent/ failure to contribute to bills or returned deposit you will have a hell of a time proving what should and should not have been paid and when. I wouldn't give anyone (barring long term partner) a key to my house without a written agreement, and I wouldn't pay a deposit without a receipt of some sort! Be sure to inform the insurance providers of the new resident.

Gwhiz

Fire_Fox wrote: »

Legally you don't need a formal/ written lodger agreement but you would be foolhardy to rely on a verbal agreement which could easily be misunderstood (does the rent include bills? What about overnight guests?). If things go pear-shaped and one needs to take the other to the small claims court for missed rent/ failure to contribute to bills or returned deposit you will have a hell of a time proving what should and should not have been paid and when. I wouldn't give anyone (barring long term partner) a key to my house without a written agreement, and I wouldn't pay a deposit without a receipt of some sort! Be sure to inform the insurance providers of the new resident.

She is doing a written agreement AND her insurance have been notified!

Thanks all!

mrkbrrws

The rent a room exemption is £4,250 for the tax year (6 April to 5 April).

If the rents received are more than this then only the excess is taxable (unless you opt for the actual profit/loss to be used instead).

mlz1413

google 'lodger agreement' for places to buy / download a contract.

Landlord Zone has a good write up on Lodgers and the Rent-a-room scheme.

Legally you don't have to have an agreement but as you and others have said it is not only wise it shows your ex is professional from the outset.

I would agree that house rules are a must and ensure the lodgers timings for the bathroom don't clash!

roses

Gwhiz wrote: »

Also.... is the RARS based on 12 months average or is the £4250 threshold a total amount in a year (I ask because 12 months at £450 is £5400).

Many thanks!

Is the £4,250 including or excluding bills?

Is the £5,400 including or excluding bills?

I think if bills come to £100/month of the rent the lodger is paying and she declares them separately then she won't need to pay tax on the amount above £4,250 is the payment is soley for bills.