Help Needed re:- letting spare rooms

debbie77

Hi, to cut a long story short I have just purchased a large 8 bedroomed house and would like to rent out some of the rooms monday to friday. My questions are what type of insurance do I need? Who do I need to tell? Are the people renting the rooms classed as lodgers? how many people can you take in? - as you have probably guessed I have never done this sort of thing before so any help would be appreciated.
Thanks in advance

Sophie

lynzpower

your frst port of call is to check out what the inland revenue think - I think the first 4k ( ish) is tax free after that you pay income tax on it.

Second, your contents insurance. Lots of insurers wont touch lodgers, but CIS will, and I found them v competitive.

clutton_2

FIRSTLY - contact the local authority Planning Department, and then the House in Multiple Occupation (HMO) Officer at your local council who will tell you whether you MAY be able do this (you will need to submit planning permission for change of use.)

IF you are granted planning permission, (this could take 2-6 months) then you will need to bring the property up to standard for health and safety and fire precautions. This can be very expensive. There are now a myriad of regulations to comply with. Most of the the 2004 Housing Act is now in force, (from April 2006) and if you are running a HMO which this will be, and if you are caught non-compliant, you run the risk of a £20,000 fine.

Depends on which town or part of town you have bought in, but, each street in this country is categorised as to what type of property useage is allowed - this information is available on the Local Plan. If your town already has its quota for HMO's you simply will not be allowed to do what you want.

In terms of insurance, if you do not declare it as HMO and you have a claim, the insurers will not pay out.

lynzpower

Clutton

Does it become a HMO if the owner lives there tho? I thought HMO was only whne the property was let out in its entirety

debbie77

This HMO thing is very confusing, the lodgers have a home of their own to go to at weekends etc.

clutton_2

""This HMO thing is very confusing"" - it certainly has become so, as individual local authorities are interpreting the law in different ways.

HMO regs are about fire safety precautions more than anything else, and are about "households". Its based on the theory that if a family leaves a house due to fire, everyone will know if someone is still trapped inside - but if it is a house full of individuals who come and go, then, no one will know who actually lives there at anyone time, and it is likely that someone may die.

One single person = one household. A family with however many kids = one household. Eight individuals living in one house = 8 households.

If you have 8 people living in a house and it is not one family it definitely will be a HMO. Whether they go home for weekends is utterly irrelevant - you are responsible, as landlord, for providing a safe environment for them to be in. This involves a lot of money.

As i said, phone your local HMO Officer

Regrettably you may have found it useful to have done all this research before you bought.

debbie77

Will probably just take 2 lodgers then and save myself a lot of hassle.