Renting out a room to my friend

philives

Hi,

I'm considering renting out a room in my house to my friend.

I own the property (not outright - I have a mortgage). The intention is to let him stay in the room for approx 4 months before he moves elsewhere as my wife is expecting a baby in September.

My friend intends to apply for housing benefit however I'm concerned that his application may be considered fraudulent if I haven't got the appropriate 'landlord bits' in place. I'm also concerned I could get into trouble.

Is there a checklist of requirements to have in place before I can be considered a private landlord and therefore able to charge him rent?

Regards,
Phil

HappyMJ

You don't need any 'landlord bits' if you remain living in the property. Just a simple written agreement called a lodgers agreement will be all that is required. All it needs to say is rent of xxx is due weekly. One weeks notice required and that's about it. A rent book would help to prove he has made the payments to you receipts would be useful or he can set up a monthly standing order straight to your account.

philives

Excellent thanks for the advice

rentergirl

I disagree. i would have a fixed term agreement. And...pay for legal advice with a housing specialist. Does this sound heavy? Yes. But what if they won't get out when agreed. Discuss this amicably, and voice your concerns. HB is not the problem it seems, but a 'casual' agreement could end a friendship.

Yorkie1

There is no point in a fixed term agreement because this is a lodger and not a tenant. A lodger has far fewer rights when it comes to termination of the rental agreement. I agree that you do need to have something in writing, setting out what the rent covers, how much, how frequently paid, and the notice period.

You also need to get a landlord's gas safety certificate, even though they will be a lodger with you.

00ec25

rentergirl wrote: »

I disagree. i would have a fixed term agreement. .

once again rentergirl has demonstrated she knows nothing about what she "advises" upon

a lodger has few rights, indeed if they refuse to leave the LL has the right to call the police to get them to remove the now unwanted "guest".
a fixed term agreement would simply confuse matters as the lodger would potentially think it gave them some form of security which in reality it would not, all a resident LL has to do with a lodger is ggive "reasonable" notice - this has NEVER been defined in law and could be anything depending on the circumstances at the time
http://england.shelter.org.uk/get_advice/renting_and_leasehold/sharing_and_subletting/lodgers/

What tenancy status do lodgers have?

If a lodger shares facilities such as the kitchen and bathroom with the landlord, s/he will be an excluded occupier. Excluded occupiers have very few rights. The landlord will only have to give reasonable notice, which could be a very short amount of time, in order to evict them.
If you don't share facilities, the person renting a room is probably a subtenant rather than a lodger. This means that the landlord may need a court order to evict her/him.

philives wrote: »

if I haven't got the appropriate 'landlord bits' in place.

as Yorkie so rightly points out you do need one "landlord bit" - the gas safety certificate (if you have gas?)
http://www.hse.gov.uk/gas/landlords/safetycheckswho.htm

G_M

Agree totally with OOec and Yorkie. Rentergirl - please stop offering poor advice!

But I'd add that it's worth having a written agreement of some sort - not for legal reasons (as said, lodgers have few rights), but just to avoid misunderstandings.

Sharing a home can easily lead to argument, resentment, friendship-breakdown if ground-rules are not established and clearly agreed (eg guests, cleaning, shared access, bills, etc). Whether you choose to discuss or write them is up to you, but personally.....

But pay for specialist advice for a lodger agreement?!!! Save your money!

There are tax issues however.

LODGERS (Licencees)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 (above) provides definitions of 'Resident Landlord' and 'same property'.

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (General information site)

Landlordzone (General advice on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)

19lottie82

Renter girl MUST be a troll, seriously!

seven-day-weekend

I agree with the others above (not rentergirl!) and would also say to make it clear whether your lodger is to do things like use your phone and share your lounge, who is going to clean their room, i.e. some house rules. You can write the house rules into your Lodger Agreement.

rockitup

One more thing to consider is that HB applications may take some time for payment to start. I experienced this when a lodger lost his job and had to apply for HB but this was back in 2006. First payment took 6 to 8 weeks but that could have changed for the better by now.

kwmlondon

Just an FYI - you can be paid up to a certain amount for a lodger every year and not have to pay any additional tax. You will be well withink this if you are just renting out for a coupe of months, but if it goes well and you decide to repeat the exercise then do check out what the allowance is.