Renting a room to a friend what do we need to know

poet123

My son bought his own house earlier this year. He has a spare room and a friend has asked him if he would consider renting it to him. He has offered to pay what amounts to almost the full mortgage payment. Apparently he lives at home with his mum and he has decided he needs to spread his wings!! Having lived in a busy household I think my son would like the company and they share a common hobby.

Are there any issues my son should be aware of? Should he ask for DD payments or cash? Does he need to put the arrangement on a formal footing or is an informal arrangement between friends ok?

G_M

LODGERS (Licencees/Excluded Occupiers)
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)



Perhaps the most important thing is agreeing ground rules from the start:

* Guests. Allowed? Overnight? What if it's a girlfriend who starts staying 2...3...4 nights a week...?
* cleaning. Who does what?
* communal costs. Shareloo roll, soaps, washing upliquid, milk, tea/coffee etc etc? Weekly kitty? or what?
* does rent include utility bills? (usually)
* noise. Is there a deadline?
* access. Is the whole house shared or some roomsoff-limits? Which?

Themoreof this stuff is discussed/agreed (and written down?) up front, the less likely there is to be bad feeling or arguments later.

The_Magnificent_Spoon

G_m is spot on with the ground rules being the most important. These are the things that will drive them insane!

Broadband. Broadband hogs are very annoying - do they need a separate broadband line for each person? Washing machine/dryer rota? Cupboard/fridge spaces allocated? Etc!

poet123

Tbh, my son is so laid back that I doubt any of that would phase him!! Except perhaps, the broadband!!

Any thoughts on cash/rent book/DD?

jamie11

poet123 wrote: »

Any thoughts on cash/rent book/DD?

Try to get the rent paid by SO, that is an easy way to have a complete record both for your son and his lodger.

poet123

Does having a paper trail confer any more rights on a lodger than cash in hand would?

duchy

Have to have a pretty awful BB connection to find two people using it is one too many.......but then it always amazes me how many people tolerate a really poor connection for months before ringing up-and it take minutes to fix.

I do agree with the ground rules though.....may save a good friendship

poet123

The BB connection is straight into the office, which is upstairs next to the room the friend would occupy, so I really don't see that being an issue. If it was they could up the speed to accommodate.

Brallaqueen

No paying by SO would not confer any more rights onto the lodger, but would give the game away if your son tried the 'no never lived here, dunno what you're on about' route if there are any investigations into the income. Not to say your son would tax dodge or anything!The only thing it would do is give lodger proof he had paid money.

Note your son would not have to protect deposit in a scheme. That's for tenants only.

As someone who did have a lodger, solid ground rules that your son is prepared to enforce are essential.

Werdnal

poet123 wrote: »

Does having a paper trail confer any more rights on a lodger than cash in hand would?

No, infact it would be mutually advantageous as no arguments if its all in black and white.

Lodgers have very little security of tenure anyway, so as long as they agree a notice/termination clause, there is no issue of the lodger having more rights.

Remember your son will have to declare the rental income if more than the rent-a-room allowance (currently £4250 from memory).

Might also be worth him checking his mortgage and insurance, just to ensure there are no clauses concerning lodgers etc, especially if he should leave lodger and go away overnight for instance, and the place burns down!

poet123

He would declare anything over £4500 (?) but he bought with a large deposit so I don't think the income would actually be over that.