Live in Landlord - legal requirements & advice

SilverSix

Hi,
Via an online listings site I have found myself a lodger to rent a double bedroom in my house on a rolling 6 month contract. I'm trying to think of all the necessary and legal requirements.

There of course will be a signed tenancy agreement and a few basic 'house rules'. A deposit taken and first months rent in advance etc, employer reference, previous landlord reference and possible a credit check.

I will remember to tell the council I would no longer be entitled to my single person discount. My utilities are managed online so pay for what I use on variable direct debit. I may need to notify my contents insurance provider and increase the coverage limit. I will also enquire with my mortgage provider if having a lodger breaks any T&C's.

Having rented accomodation whilst at Uni I'm aware of the deposit protection scheme, will this apply to me? Do I need to request anything other than the council, any form of license etc?

The income generated will top the £4,250 tax free limit by £550. So I assume I will need to declare this on my (first ever) tax return which I also have some surrendered bonds to include on. This would of course need to be done annually. Is it just taxable for 20% (I will stay under the higher earnings bracket) or will there be N.I and my student loans coming off that too?

Any other advice, tips or links to useful websites would be appreciated.

Many thanks,

Ben

jamie11

There of course will be a signed tenancy agreement and a few basic 'house rules'. A deposit taken and first months rent in advance etc, employer reference, previous landlord reference and possible a credit check.

Make it 'LODGER AGREEMENT'

I will also enquire with my mortgage provider if having a lodger breaks any T&C's.

You should not have to do that.

GDB2222

I would tend to avoid a 6 months rolling contract. Your lodger can hold you to it, whilst if he/she decides to break it there is buggah all you can do about it. For someone living in my home, 2 weeks notice would be the maximum I would want to have to give.

SilverSix

Thanks, I was just reading up on the difference between lodger, license to occupy & tenancy agreements.

HappyMJ

BennyC wrote: »

Hi,
Via an online listings site I have found myself a lodger to rent a double bedroom in my house on a rolling 6 month contract. I'm trying to think of all the necessary and legal requirements.

There of course will be a signed tenancy agreement and a few basic 'house rules'. A deposit taken and first months rent in advance etc, employer reference, previous landlord reference and possible a credit check.

I will remember to tell the council I would no longer be entitled to my single person discount. My utilities are managed online so pay for what I use on variable direct debit. I may need to notify my contents insurance provider and increase the coverage limit. I will also enquire with my mortgage provider if having a lodger breaks any T&C's.

Having rented accomodation whilst at Uni I'm aware of the deposit protection scheme, will this apply to me? Do I need to request anything other than the council, any form of license etc?

The income generated will top the £4,250 tax free limit by £550. So I assume I will need to declare this on my (first ever) tax return which I also have some surrendered bonds to include on. This would of course need to be done annually. Is it just taxable for 20% (I will stay under the higher earnings bracket) or will there be N.I and my student loans coming off that too?

Any other advice, tips or links to useful websites would be appreciated.

Many thanks,

Ben

There are minimal legal requirements.

As has been said call it a lodger agreement. Collect rent weekly or fortnightly. Make that the notice period. If you give a lodger a 6 month agreement you can't kick them out but they can legally give you a days notice then move and the most you will be able to keep is the rent paid to date.

Deposit protectipon does not apply to lodgers but if you take one you will need to keep it safe anyway. Personally I wouldn't make the deposit much more than 2 weeks.

You don't credit check lodgers. If they don't pay on time give them notice straight away to move out within the week or whatever period of time the deposit will cover allowing for any possible damage. If they do damage something they pay up straight away or move out straight away losing the deposit. You don't ever risk losing anything.

Your contents insurance will not cover lodgers belongings so no need to increase that.

And my final comment.. Is the rent £92.30 per week? £400 per month? Personally I'd just make it just under the annual allowance of about £85 per week (allows for 2 weeks of voids per year) and not bother with the HMRC. If this is the first time you won't pay any tax this financial year and next year you can then reduce the rent to £85 per week and ignore the tax. If they do stay the entire 12 months then give them 2 weeks of free rent in April to stay under the limit.

Some place I've stayed at each lodger would put a fiver into a jar every week to cover small purchases you could do that too if you needed a bit more for toilet rolls and such.

Badger_Lady

PM me if you'd like a copy of a 'Houseshare Agreement' 'House Rules' and 'Application Form'... I use them for my lodgers and several other people have based theirs on the same documents

Registering for income tax is a bit more painful and I'm not sure how it impacts on your student loan (never having had one myself). But you can still take advantage of the rent a room scheme at the same time, so you'll only be paying tax on that tiny bit over and above.

GDB2222

Under the rent-a-room scheme, can you offset some expenses (eg extra council tax, electricity and loo rolls) against the rent?

Badger_Lady

GDB2222 wrote: »

Under the rent-a-room scheme, can you offset some expenses (eg extra council tax, electricity and loo rolls) against the rent?

Nope, that's the trade-off.

Brallaqueen

You'll need a gas safety certificate if you are renting a room out (assuming your property has gas)
You'll have landlord obligations with respect to electrical and health and safety regulations so read up on those.
I'd advise against long term contracts, and make sure that your notice period is cearly laid out and something you're happy with. My personal agreement is 7 days notice, or 24 hours notice in the event of aggressive or illegal behaviour. Make it short, you'll have far less problems finding a new lodger than having to live with one you can't stand or harrasses you.

AFK_Matrix

jamie11 wrote: »

Make it 'LODGER AGREEMENT'



You should not have to do that.

It's interesting you say that. I am thinking of taking a lodger in come the new year and I am worried about letting my Mortgage provider know about it incase they say no.

So are you saying I don't have to let the mortgage lender know? I am just worried as the Mortgage Lender (Post Office) have apparently taken out their own insurance as they have lent me over what they normally do and so this may affect me having a lodger.

jamie11

AFK_Matrix wrote: »

It's interesting you say that. I am thinking of taking a lodger in come the new year and I am worried about letting my Mortgage provider know about it incase they say no.

So are you saying I don't have to let the mortgage lender know? I am just worried as the Mortgage Lender (Post Office) have apparently taken out their own insurance as they have lent me over what they normally do and so this may affect me having a lodger.

It doesn't really affect your mortgage company, but you might want to check with your insurance company about the possibility of them refusing a claim because you have a lodger, and it's a good idea to get the lodger to sign something saying he has no convictions.