lodger in my Annexe

dariune

Hello there

I'm afraid I need to ask advice again.

I have a lodger in my Annexe. I checked with my District Council if that was kay and they said yes.

I recently had a Tribunal over the VOA adding a separate Tax band to the Annexe and upping our main property Tax. (I won on the main property but the Annexe ended up seperately banded).

The Annexe is joined on to the main house via a door and they aren't seperately billed for services. Equally I am responsible for Council Tax and not my lodger.

Unfortunately my district COuncil started sending letters to my lodger asking for payment on the Annexe Council Tax instead of me. I phoned to resolve and pay the Council Tax and they said they can't tell me how much it is because the Tax account is now in my lodgers name. So I am trying to resolve that.

At the same time I had an anonymous note through my door (from a neighbour I assume) stating I am illegally using the Annexe as a seperate dwelling and they do not approve.

Sure enough my District Council has asked to come round to inspect the property and have stated it doesn't look good because the Council Tax is in my lodgers name meaning my lodger seems like a tenant.

Now I haven't done anything illegal as far as I know and I have checked my with District Council multiple times that my renting out to a lodger would be okay.

I have copied the Planning office my letter that I sent to the revenue office asking them to resolve the issue with the Tax account.

Is there anything else I need to be aware of or be concerned about before the Planning office visits me next Tuesday?

Thanks for your help

anselld

The fact that the VOA have determined the annex to have a separate rating, combined with the fact that it is rented out, means that you have caused a change of use. The annex is no longer in use ancillary to the main property, it is a separate dwelling.

Planning may consider enforcement action against such change of use.

How long has it been this way?

00ec25

you claim they are a lodger yet the annex appears to be effectively a self contained dwelling. Does your "lodger" have their own kitchen and bathroom in the annex or are the only such facilities those you use yourself in the "main" house? Those are the crucial issues in respect of both housing law and whether you can claim them as a lodger for income tax purposes.

the fact that services are not separately billed has no relevance to either council tax or your "lodger's" status under housing law.

the fact the annex now has its own CT account is awkward since that gives strong credence to it being a self contained dwelling with a tenant, not a lodger. Liability for council tax would rest with you if they were a lodger, since for council tax purposes only, you would be classed as a house in multiple occupation, so the owner would be the liable person for the property. However, you, for council tax purposes, now have your own property and the "lodger" has their own property, with each of you liable for your own dwellings.

have you researched the planning history of the annex? Surely when you purchased the property your conveyancer would have explained if there are any planning permission restrictions on the annex. Very common for planning permission to be given to construct an annex so a "granny" can be looked after, but with a restriction that once granny is dead the annex cannot be separately let. the fact you have been through VOA appeal and had separate CT applied would i assume mean someone has checked what planning restrictions are in place, if any?


as i'm sure you appreciate, what your neighbours "think" may be inconvenient to ongoing relations, but totally irrelevant legally.

dariune

Thanks for your replies.

So yes the Annexe was given permission to be built but it could not be considered a seperate dwelling and therefore could not be rented out to a tenant but it could have a lodger.

Thats why I bought it. I thought, while lodgers don't pay as much in rent it would be a gentle introduction to being a Landlord.

I phoned the VOA and My District Council and asked if it had seperate Council Tax and they said no. I asked if I could have a lodger (The previous owner had one) and they said yes.

So I bought the house. 2 weeks after the purchase I got a notice from the VOA saying they had upped the Tax band of my main property and created a new Tax band for the Annexe. Hence my going to Tribunal to get the band on the main property lowered to what it was (Which I suceeded in after a year).

The Annexe is self contained. It has a kitchen and a bathroom. The only way to get in to it is through our utility room or the back garden which is walled off.

So are you guys now saying that because the VOA decided to band the Annexe differently I can no longer have a lodger and because of the restrictions placed on the Annexe when it was built as an extension I can't have a tenant?

if so ... I can't afford the house long term now.

It was the neighbours writing a complaint to the Council that made the Council want to check my property. The VOA, the Tribunal judges (Is that what they are called) and the legal representative there all said I should be fine with a lodger.

00ec25

dariune wrote: »

The Annexe is self contained. It has a kitchen and a bathroom. The only way to get in to it is through our utility room or the back garden which is walled off.

then they are not, and never were, a lodger. They do not share one or more common facilities with you. They are "occupiers with basic protection" in terms of housing law.
https://www.gov.uk/rent-room-in-your-home/your-lodgers-tenancy-type

I doubt however that the council planning inspectors will be too bothered over the technicalities of housing law.

see the first point:
http://www.lodgerlandlord.co.uk/2010/03/09/the-five-main-differences-between-a-lodger-and-a-tenant/
"So if the occupier lives in the granny annexe or garden which has its own front door or only shares a hallway – he will be a tenant. Although as there is a resident landlord he will not have an assured shorthold tenancy " (which is Tessa's long winded way of trying to sell one of her template agreements - they are "occupiers with basic protection"

As far as income tax is concerned, and so the right to claim the rent a room allowance, an annex is a grey area, but you are without doubt a resident landlord.

In law, a resident landlord letting is one where the landlord and the person he or she lets to live in the same building. This includes conversions where they live in different parts of the same property (however long ago it was converted).
https://www.gov.uk/government/publications/letting-rooms-in-your-home-a-guide-for-resident-landlords/letting-rooms-in-your-home-a-guide-for-resident-landlords

however.... "The first thing to bear in mind is that the Rent-a-Room scheme only applies to furnished rooms within your main residence. In other words, you will need to be living alongside your lodger and sharing facilities.
This means that any wholly self-contained section of your home, such as a Granny Annexe with its own bathroom or kitchen, would not fall under the scheme's criteria."
http://www.thisismoney.co.uk/money/mortgageshome/article-1719578/Renting-a-room-to-a-lodger-is-a-good-earner.html#ixzz4nQA9Y4xt

Guest101

dariune wrote: »

Hello there

I'm afraid I need to ask advice again.

I have a lodger in my Annexe. I checked with my District Council if that was kay and they said yes.

I recently had a Tribunal over the VOA adding a separate Tax band to the Annexe and upping our main property Tax. (I won on the main property but the Annexe ended up seperately banded).

The Annexe is joined on to the main house via a door and they aren't seperately billed for services. Equally I am responsible for Council Tax and not my lodger.

Unfortunately my district COuncil started sending letters to my lodger asking for payment on the Annexe Council Tax instead of me. I phoned to resolve and pay the Council Tax and they said they can't tell me how much it is because the Tax account is now in my lodgers name. So I am trying to resolve that. - Ask your lodger? (well I say lodger, it sounds like it's a tenant)

At the same time I had an anonymous note through my door (from a neighbour I assume) stating I am illegally using the Annexe as a seperate dwelling and they do not approve. - Ignore it. It's not illegal.

Sure enough my District Council has asked to come round to inspect the property and have stated it doesn't look good because the Council Tax is in my lodgers name meaning my lodger seems like a tenant. - indeed.

Now I haven't done anything illegal as far as I know and I have checked my with District Council multiple times that my renting out to a lodger would be okay. - why would renting to a tenant not be ok?

I have copied the Planning office my letter that I sent to the revenue office asking them to resolve the issue with the Tax account.

Is there anything else I need to be aware of or be concerned about before the Planning office visits me next Tuesday?

Thanks for your help

Have you protected the deposit? Carried out gas safety checks?

dariune

Thanks again for the replies.

Just to confirm I am completely fine with it being a tenancy. I have no issues with that whatsoever. The only reason I didn't go for a full tenancy was because of the clause in the planning permission for the extension stating it could not be let out as a separate dwelling and only to a lodger. But that was put in when Planning Permission was agreed 3 years ago and therefore before the Council Tax separated 1 year ago.

The only potential issue is it is my friend who is my lodger who is down on her luck at the moment and so is on benefits. I'm not sure her benefits would stretch to the Council Tax as well (Which I assume a tenancy would require her to pay. Not something I have looked in to) I already went down £100 from the average asking price in our area to allow her to afford the place. That's my problem though and irrelevant to this situation.

The deposit is in a separate bank account untouched. The gas is off of our supply (No separate services) and was checked just under a year ago and I have the certificate.

So is it likely the District Council will at worst just state it needs to be a tenancy or is it possible they will say I can't have a tenant or lodger and therefore I am paying Council Tax on a part of the house I can't use?

Guest101

dariune wrote: »

Thanks again for the replies.

Just to confirm I am completely fine with it being a tenancy. I have no issues with that whatsoever. The only reason I didn't go for a full tenancy was because of the clause in the planning permission for the extension stating it could not be let out as a separate dwelling and only to a lodger. But that was put in when Planning Permission was agreed 3 years ago and therefore before the Council Tax separated 1 year ago. - You realise planning permission has no bearing on what the law says regarding tenancies?

The only potential issue is it is my friend who is my lodger who is down on her luck at the moment and so is on benefits. I'm not sure her benefits would stretch to the Council Tax as well (Which I assume a tenancy would require her to pay. Not something I have looked in to) - No, council tax can be paid by anyone. I could pay yours if I wanted to (I don't) - so it's whatever you've agreed. the LIABILITY would be hers, but that's not relevant. I already went down £100 from the average asking price in our area to allow her to afford the place. That's my problem though and irrelevant to this situation.

The deposit is in a separate bank account untouched. - so not protected then.... The gas is off of our supply (No separate services) and was checked just under a year ago and I have the certificate. - good, make sure you check again once 11 months elapses

So is it likely the District Council will at worst just state it needs to be a tenancy - no, this is not a council issue. and IT IS ALREADY A TENANCY. or is it possible they will say I can't have a tenant or lodger and therefore I am paying Council Tax on a part of the house I can't use?

Again, that seems unlikely. I don't see why the council would be interested.

Cheeky_Monkey

dariune wrote: »

Thanks again for the replies.

Just to confirm I am completely fine with it being a tenancy. I have no issues with that whatsoever. The only reason I didn't go for a full tenancy was because of the clause in the planning permission for the extension stating it could not be let out as a separate dwelling and only to a lodger. But that was put in when Planning Permission was agreed 3 years ago and therefore before the Council Tax separated 1 year ago.

The only potential issue is it is my friend who is my lodger who is down on her luck at the moment and so is on benefits. I'm not sure her benefits would stretch to the Council Tax as well (Which I assume a tenancy would require her to pay. Not something I have looked in to) I already went down £100 from the average asking price in our area to allow her to afford the place. That's my problem though and irrelevant to this situation.

The deposit is in a separate bank account untouched. The gas is off of our supply (No separate services) and was checked just under a year ago and I have the certificate.

So is it likely the District Council will at worst just state it needs to be a tenancy or is it possible they will say I can't have a tenant or lodger and therefore I am paying Council Tax on a part of the house I can't use?

I think you might find that your 'arrangement' will be considered a 'contrived tenancy' in order for your friend to obtain Housing Benefit!

antrobus

dariune wrote: »

..The only potential issue is it is my friend who is my lodger who is down on her luck at the moment and so is on benefits. I'm not sure her benefits would stretch to the Council Tax as well (Which I assume a tenancy would require her to pay. Not something I have looked in to) I already went down £100 from the average asking price in our area to allow her to afford the place. That's my problem though and irrelevant to this situation.

If the annex has it's own CT banding, there will be CT to pay, your lodger is occupying the annex, and they are therefore already 'required to pay'. Which is why the council are sending letters to your 'lodger' asking for payment of the annex CT instead of you.

You can of course pay it on their behalf if you like.

If your lodger is on benefits, they could apply for Council Tax Reduction and reduce the liability to a potential £0.

I'm not convinced that the lack of a written lease means a great deal. I'd agree with previous posters, that your lodger is a tenant.

Jenniefour

Guest101 wrote: »

Have you protected the deposit? Carried out gas safety checks?

I don't know if you've read the backstory to this and I don't know how to provide the link. But I would say the status of the tenant is possibly the least of OP's concerns at the moment. Not unimportant and should not to be ignored, but, in the bigger scheme of things, it's one issue amongst several others. In previous post OP said this person is a friend which implied this is some kind of informal arrangement. If that turns out now not to be the case, then that's another headache to deal with, as the issues you raised will then be very important as well.

It's a planning permission issue which has sprouted some headache complications. OP needs to know how to manage the meeting next Tuesday with a planning officer.

OP - I would be finding a way to put off that meeting (e.g. you're sick) until a way through all this becomes clear. I'm sat here wondering why you didn't remove that kitchen pronto, and if there is a way through all this - and there might not be as things might have gone too far now. That might mean seeking urgent legal advice from a property law solicitor - a jolly good one who really knows their stuff. Will cost you money now but might be able to see a way through all of this that might save future headaches. But you do need to get all this on a legal footing that makes sense.

I would also, if it's possible, be asking your friend to move into the house and out of the annexe. That will then make clear whether you have a lodger or a tenant. I do hope you're not close the edge financially and are not heavily dependent on the rent to get by. But, as far as I know, it is OK for those who are in receipt of benefits to be a lodger.