We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Renting Out Rooms (Plural)
KnottyB
Posts: 12 Forumite
Good Afternoon All,
I was wondering if anyone could give advise on a prospective house. My friend and I are looking to get a mortgage for a "5" bedroom house. (I say "5" as it is four plus a lounge).
My friend will be living in one of the rooms living leaving 3/4 to rent out. I was wondering if anyone could advise on the following:
1. As you can see above I said 3/4 rooms, my first question is are we required to provide a lounge / living room? I appreciate as a selling point this may be necessary but from a legal point where do we stand?
2. As my friend will be living there can we get away with a standard mortgage, as buy-to-let wouldn’t really be applicable here? (We have an appointment with a mortgage broker next week just want to be as prepared as possible).
3. I have done some research on the internet and come across the following:
a. gov.uk/rent-room-in-your-home/becoming-a-resident-landlord
b. gov.uk/private-renting/your-landlords-safety-responsibilities
c. gov.uk/government/uploads/system/uploads/attachment_data/file/11893/151564.pdf
I have only scanned over them but I can see there are few key points:
- Tenants have less legal rights it seems (ie can be kicked out with shorter notice period so as to protect the landlord as it is their living space). Not saying they have less legal right overall.
- Check needs to be done on all gas and electrical appliances provided.
- Smoke detectors must be installed for safety
- ‘a tenant or lodger doesn’t have the right to challenge the agreed rent’
- ‘you may be able to earn £4,250 per year tax-free under the Rent a Room Scheme’
- From reading the pdf I take it that the agreement between us and the tenants would be a tenancy and not a licence to occupy. Obviously we would not enter any of their rooms.
“Excluded tenancy: ‘houseshare’ arrangement, where
landlord lets room(s) in his or her home and shares
lounge etc with the occupier; bedsit arrangements
where landlord is not servicing rooms”
Do all the above still apply (especially the tax free £4,250) if I live in a separate property but my friend lives there full time (and is on the mortgage). I appreciate that this amount won’t double and would split between us.
3. If tenants bring their own electrical devices (ie microwave / tv) are we responsible for these items (ie checks for these items).
4. Are we responsible for any theft if their doors are locked and only they have the key?
5. Further to the above point do we have to have a spare key for them?
6. Are we allowed to make specific restrictions within the tenancy agreement? An example is we don’t want them using electrical blow heaters (there are very costly to run and the house has central heating). Rental cost will include gas, electricity, water, internet and council tax.
7. Should the other tenants be students and my friend being the only non-student, would we still be eligible for single occupancy discount on council tax (as students are exempt).
Sorry for the abundance of questions just want to get my facts right. I appreciate this isn’t a landlord specific forum but if anyone is willing to point me in the right direction it would be appreciated.
I was wondering if anyone could give advise on a prospective house. My friend and I are looking to get a mortgage for a "5" bedroom house. (I say "5" as it is four plus a lounge).
My friend will be living in one of the rooms living leaving 3/4 to rent out. I was wondering if anyone could advise on the following:
1. As you can see above I said 3/4 rooms, my first question is are we required to provide a lounge / living room? I appreciate as a selling point this may be necessary but from a legal point where do we stand?
2. As my friend will be living there can we get away with a standard mortgage, as buy-to-let wouldn’t really be applicable here? (We have an appointment with a mortgage broker next week just want to be as prepared as possible).
3. I have done some research on the internet and come across the following:
a. gov.uk/rent-room-in-your-home/becoming-a-resident-landlord
b. gov.uk/private-renting/your-landlords-safety-responsibilities
c. gov.uk/government/uploads/system/uploads/attachment_data/file/11893/151564.pdf
I have only scanned over them but I can see there are few key points:
- Tenants have less legal rights it seems (ie can be kicked out with shorter notice period so as to protect the landlord as it is their living space). Not saying they have less legal right overall.
- Check needs to be done on all gas and electrical appliances provided.
- Smoke detectors must be installed for safety
- ‘a tenant or lodger doesn’t have the right to challenge the agreed rent’
- ‘you may be able to earn £4,250 per year tax-free under the Rent a Room Scheme’
- From reading the pdf I take it that the agreement between us and the tenants would be a tenancy and not a licence to occupy. Obviously we would not enter any of their rooms.
“Excluded tenancy: ‘houseshare’ arrangement, where
landlord lets room(s) in his or her home and shares
lounge etc with the occupier; bedsit arrangements
where landlord is not servicing rooms”
Do all the above still apply (especially the tax free £4,250) if I live in a separate property but my friend lives there full time (and is on the mortgage). I appreciate that this amount won’t double and would split between us.
3. If tenants bring their own electrical devices (ie microwave / tv) are we responsible for these items (ie checks for these items).
4. Are we responsible for any theft if their doors are locked and only they have the key?
5. Further to the above point do we have to have a spare key for them?
6. Are we allowed to make specific restrictions within the tenancy agreement? An example is we don’t want them using electrical blow heaters (there are very costly to run and the house has central heating). Rental cost will include gas, electricity, water, internet and council tax.
7. Should the other tenants be students and my friend being the only non-student, would we still be eligible for single occupancy discount on council tax (as students are exempt).
Sorry for the abundance of questions just want to get my facts right. I appreciate this isn’t a landlord specific forum but if anyone is willing to point me in the right direction it would be appreciated.
0
Comments
-
You need to check the local Council rules on HMOs and registration for a start.
it is an HMO for CT puurposes anyway.
You will need a buy2let mortgage.
You cannot use the rent a room scheme, so you will need to record income and expenditure and pay tax.If you've have not made a mistake, you've made nothing0 -
If you or your friend are living there, you are resident landlords and your "tenants" would infact be "lodgers". Make sure you do not give them a tenancy agreement as this can confuse things no end!
You are normally allowed to take lodgers under a normal mortgage, but must check the small print as some lenders require to be informed. Also check house insurance for similar clauses.
All furniture must comply with current fire safety regs. You need an Annual Gas Safety check if there is a gas supply to the property. Electrical items you supply must be PAT tested.
However, probably the most important thing you may not be aware of is that properties housing 3 or more unrelated tenants can be classed an a "house of multiple occupancy" - HMO. Some councils require these to be registered and you need to check with them for the specific requirements, H&S regs and other rules are areas vary. Specific rules about fire safety and smoke detectors are also stricter in an HMO.
All rental income must be declared for tax purposes and you need to register for the rent-a-room scheme - check out the HMRC website for details and whether this is applicable to this arrangement.0 -
-
All rental income must be declared for tax purposes and you need to register for the rent-a-room scheme - check out the HMRC website for details and whether this is applicable to this arrangement.
but only ONE owner is resident therefore if the intention is to split the rental income between the "we" that the OP refers to then only the resident LL can use the RAR, the other owner/non resident owner cannot.
assuming the "we" are not a married /civil ptnr couple then it is perfectly allowed to split the income between the two of them any way they want, but the tax treatment will be specific to each
Moreover the non resident owner cannot possibly have a lodger so we appear to have occupants who are the lodger of one owner and the tenant of the other - clearly an impossible situation that someone else is going to have to advise on as clearly the paying occupants cannot have a licence with one owner and an AST with the other. It would seem the simplest solution would be that the resident owner is the only person named on the rental agreement as LL so that the occupants are indeed their lodger but the income is split between the two business partners in whatever portion they agree with the non resident owner paying tax on their net profit after expenses but excluding RAR allowance leaving the resident LL to claim the full £4,250
as for the OP
1. no requirement to provide a lounge. Many student properties do exactly what you propose as it gets the 5th occupant in
2. no "we" cannot get away with it, only the resident person can
3 the dangers of scanning are self evident - learn the difference between a tenant and a lodger you have mixed them up in the same sentence and the rights you have in reverse. You need to do a lot more reading about rent increase procedures
3b you are not responsible for the occupants own equipment, they are
4 no
5 if you have granted exclusive use of a room because you do not have a key for it then they are NOT a lodger. You have granted an AST over a bedroom with the tenant of that room also having use of the remaining common parts - ie they are not a lodger in that case
6 yes you can put such clauses in, make sure people know about it before they decide if they want to move in as it makes you look tight fisted and likely to be difficult to live with
7 yes - SPD would apply in that case
also be aware that in some areas student properties may need to be in an accreditation scheme run by the council and/or the university. Properties that are not will immediately flag up to the parents of the students as being run by dodgy LL who do not care about the safety or comfort of the paying residents0 -
They will be lodgers as there is a resident landlord. ('landlord' is legally a singular even if there are in fact 2 or more of them, just as 'tenant' is s singular legal entity in a 'joint tenancy' [ which this isn't] )
It will be an HMO as several seperate 'households', so check the council rules.
Rent a room scheme cannot be used as a) rent likely to exceed the limit and b) one landlord not resident
I hope you have a clear, legally binding agreement between yourself and friend that covers ALL future eventualities:
* who pays relairs/maintenance
* who gets rent/pays mortgage
* what 'share' each owns
* what happens if one wants to sell
* what happens if debts arise (eg lodgers can't be found or default on rent)
* what happens if you decide you want to move in too
Buying property together is a more complex /binding commitment than marriage! So plan for the future (which will change).0 -
:T :T :T good luck1. As you can see above I said 3/4 rooms, my first question is are we required to provide a lounge / living room? I appreciate as a selling point this may be necessary but from a legal point where do we stand?no
2. As my friend will be living there can we get away with a standard mortgage, as buy-to-let wouldn’t really be applicable here? (We have an appointment with a mortgage broker next week just want to be as prepared as possible).my guess is residential. Ask the adviser. Beware of insurance too though
3. I have done some research on the internet and come across the following:
a. gov.uk/rent-room-in-your-home/becoming-a-resident-landlord
b. gov.uk/private-renting/your-landlords-safety-responsibilities
c. gov.uk/government/uploads/system/uploads/attachment_data/file/11893/151564.pdf
I have only scanned over them but I can see there are few key points:
- Tenants have less legal rights it seems (ie can be kicked out with shorter notice period so as to protect the landlord as it is their living space). Not saying they have less legal right overall.
no. Tenants have MORE rights, but these will be lodgers (Excluded Occupiers)
- Check needs to be done on all gas and electrical appliances provided.yes. And get an annual Gas safety certificate
- Smoke detectors must be installed for safetycommon sense really. Get a COalarm too if you have gas
- ‘a tenant or lodger doesn’t have the right to challenge the agreed rent’??? anyone can 'challange'! The Q is can they force the LL to change it. No, not once it is agreed
- ‘you may be able to earn £4,250 per year tax-free under the Rent a Room Scheme’ Self-assessment in this case
- From reading the pdf I take it that the agreement between us and the tenants would be a tenancy and not a licence to occupy. Obviously we would not enter any of their rooms.
why? Lodgers agreement, and to certain, do NOT give them 'exclusive occupation' of their rooms
“Excluded tenancy: ‘houseshare’ arrangement, where
landlord lets room(s) in his or her home and shares
lounge etc with the occupier; bedsit arrangements
where landlord is not servicing rooms”is this a question??
3. If tenants bring their own electrical devices (ie microwave / tv) are we responsible for these items (ie checks for these items). No, but I would prohibit this in the lodger agreement
4. Are we responsible for any theft if their doors are locked and only they have the key?why should you be responsible unless you commited the theft? Why are you giving them the only key? Mad!
5. Further to the above point do we have to have a spare key for them? You'd be mad not to have a spare key for yourself!
6. Are we allowed to make specific restrictions within the tenancy agreement?
don't use a 'tenancy agreement'. yes, you can include anything you want (though some conditions may be unenforcible eg you could not require the lodger to sleep with you once per week)
An example is we don’t want them using electrical blow heaters (there are very costly to run and the house has central heating). Rental cost will include gas, electricity, water, internet and council tax. Wise. Include a 'fair usage clause or you might find your bills escalate. Also a requirement to act in a lodger-like manner
7. Should the other tenants be students and my friend being the only non-student, would we still be eligible for single occupancy discount on council tax (as students are exempt).
I believe so - call the council and check
.0 -
Rental cost will include gas, electricity, water, internet and council tax
Whether this is stated in the tenancy or not the resident landlord will, in law, always be liable for any council tax payments due on the property .7. Should the other tenants be students and my friend being the only non-student, would we still be eligible for single occupancy discount on council tax (as students are exempt).
YesI no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0 -
-
As others have alluded to, your house will not just be an HMO, but also an HMO subject to mandatory licensing (once you have more than two lodgers you get into HMO territory despite the fact they are lodgers and not tenants). This is not necessarily a problem but you will need to spend a bit of money getting a licence from the council and complying with any requirements they have.
I agree with the vast majority of your post, but in your answer to point 3 you seem to suggest forbidding the lodgers from having any electrical items of their own. This would be very unreasonable -- they wouldn't even be able to charge their phones or use a laptop! My advice on this point is to let them use their own small electrical items (e.g. small TVs, hairdryers, phone chargers, computers) but perhaps forbid cooking items such as microwaves?...0 -
You need to be clear on the difference between lodgers and tenants as you seem to be mixing the two.
Lodgers have fewer rights than tenants and have a lodger agreement rather than tenancy. You can ask a lodger to leave with 'reasonable' notice, whereas you have to go to court to evict a tenant who doesn't want to leave. If you grant them 'exclusive occupation' of their room then you may be granting them a tenancy and you don't want to do that. Read up on how to avoid that.Don't listen to me, I'm no expert!0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.3K Banking & Borrowing
- 253.7K Reduce Debt & Boost Income
- 454.4K Spending & Discounts
- 245.3K Work, Benefits & Business
- 601.1K Mortgages, Homes & Bills
- 177.6K Life & Family
- 259.2K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards