Renting to friends

Trotskisaurus

Hello

I've found this forum to be extremely helpful whenever i've had any questions, however weird and wonderful, so i'm hoping someone would be able to give me some help on the issue of renting.

Basically i'm looking to buy my first house, it won't be anything grand but it will be my own. A friend of mine has been renting for many years and the only properties that seem to be on the market are either massively inflated in cost, slums or are house-shares. I have been interested in renting out a room to a friend of mine and wonder what sort of legal issues I may face.

The main thing to note is my friend is on housing benefits, so his payments are covered by the council. Would he still be eligible to claim even if he was living with a friend?

Michael

Rollinghills

Assuming you will be living in the property your friend will be a lodger (not a tenant).
He will still be able to claim housing benefit. It is only if someone is living with a close relative (eg parents) that they can't claim.
http://www.nihe.gov.uk/housing_benefit_claims

jamie11

Renting to friends or relatives is one of the best ways to alienate them, I'm not saying it will happen, but it's very likely indeed.

Trotskisaurus

Oh don't worry jamie11; we are used to alienating one another :P It is really difficult for him though; the council pays housing benefit but there is often a shortfall he has to meet which doesn't leave him much at all; hard to get a job in threadbare clothes. A better environment will do everyone good.

Many thanks for the link Rollinghills; that sounds promising!

Rollinghills

If you go with it set out clear expectations with regards to tidying up and cleaning of common areas, payment of rent etc. Go for a written agreement so that things are clear. A lodger doesn't have many rights so a threat of being chucked out might be incentive enough, hopefully not needed!

princeofpounds

Yes be very clear on what happens if he can't pay his rent too.


You won't have many legal issues at all as long as you are also resident at the property, and so the other occupier is a lodger rather than a tenant.


Understand the tax position (including the rent a room allowance).


Make sure you have a reasonable contract (don't give a lodger too many rights, especially over notice period)


Make sure the property is safe (for your sake too).


Check your insurance covers it (it should)

Rambosmum

For him to claim housing benefit you will need to ensure that your lodger agreement is water tight and fully legitimate, this includes charging him a fair rent, in line with other house share in your area and not letting it look like your being soft on him etc. Mention of a deposit is also a good idea and of how you are going to end a tenancy.

Have you lived together before? Are you ready for living with someone you also spend a lot of time out the house with? We rented a room to a friend and never got any time by ourselves unless he was out, and even then when he came home he'd come and chat to us, which is fine, but not when it was 'date night' and he couldn't tell the difference!

Trotskisaurus

Thanks all, these are great replies! Does anyone happen to know the upper band of housing benefit councils provide? If there are any conditions they can withdraw them? Would any of this affect my home owners insurance?

princeofpounds

Does anyone happen to know the upper band of housing benefit councils provide?

Each council will publish their rates online.

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 provides definitions of 'Resident Landlord' and 'same property' (S31 & Schedule 1 (10).

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (21 tips from solicitor Tessa Shepperson + General information site)

Landlordzone (Various articles on taking in lodgers)

Renting out rooms in your home (Government info)

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

Bart1

jamie11 wrote: »

Renting to friends or relatives is one of the best ways to alienate them, I'm not saying it will happen, but it's very likely indeed.

I would prefer to rent to friends than strangers