Lodger - Queries

Lurkingtoposting17

Hi All

I am buying my first property, about to exchange. My cousin has asked to lodge from me, which I am happy with. For various reasons, it would suit us both (I was not planning to have a lodger, and she needs a degree of flexibility with her job).

However, after reading horror stories here about lodgers and rentals to family members I want to set up a proper agreement - which is somewhat informal and flexible, but protects both my cousin and me.

- I have informed my mortgage lender I intend to take in a lodger under the rent-a-room scheme

- I have agreed a rental price (base weekly rate plus bills - I have broken down the estimate of bill portion and have said that this will be reviewed at 3 months incase estimates are incorrect and require adjustment on her portion)

- I don't want to take a deposit for her, and I understand I don't need to protect a deposit for a rent a room scheme anyway, so assume this is fine? Or is it worth taking a small nominal deposit (e.g. £100)?

- I don't want her to be restricted on notice, but have said 2 weeks for both parties, just so she has some reassurance I won't kick her out.

- I am moving in and the room is unfurnished, and she is bringing her own furniture. However, I understand that renting a room to a lodger requires it to be furnished? I would furnish to basic standards for her, but she has everything she needs (a bed and a mattress and there is cupboards in the room). Is this a huge issue if she is happy with doing this?

I have read a couple of resources and I think I am ok in a legal sense on the first 4 points, unless anyone knows differently? The last point is the one I am completely unsure of and would appreciate any feedback on that point - I have read something saying the room must be furnished and something else saying it doesn't matter.

Finally, stupid question, if I am asked the lodgers address on the agreement - would I put their current address rather than my own as they will sign before they move in?

Thanks for your patience folks...! I as always appreciate the wise opinion and sage advice of folks in this forum :money:

NinaSwiss

My advice is you have a formal lodger arrangement, even if it is informal in practice. Give both of you something in writing to fall back on.

For a 2-week notice period take at least 2 weeks deposit. I prefer to keep things simple(as a landlord and in the past as a lodger) so tend to go for an arrangement that is inclusive of bills. Besides the rent a room scheme allowance includes anything you receive for bills too.

I typically go for:
1 month deposit
1 month rent in advance (rate includes bills)
I take inventory of condition of furniture provided in rooms (though I'm quite relaxed on wear & tear or even minor damage that could have been avoided)

I think the room needs to be furnished . Basics will do:Bed, wardrobe and carpet will do. You lodger can decorate further if she wishes and you are ok with that.

I don't think there is a 'requirement' for an address on the lodger agreement. Mine just specifies my details, my lodger details and the accommodation in question and arrangement details.

Geoff1963

Buy the furniture off her, then it is a room you have furnished.

NinaSwiss

Also if you have never lived together before, do discuss your expectations on how you would manage things like cleaning, having guests over , smoking etc etc.

G_M

Lurkingtoposting17 wrote: »

... My cousin has asked to lodge from me, which I am happy with. .....

However, after reading horror stories here about lodgers and rentals to family members I want to set up a proper agreement - which is somewhat informal and flexible, but protects both my cousin and me.
sensible

- I have informed my mortgage lender I intend to take in a lodger under the rent-a-room scheme
Probably no need to. Have they agreed? sometimes they say no without unerstanding the distinction between a lodger and tenant.

- I have agreed a rental price (base weekly rate plus bills - I have broken down the estimate of bill portion and have said that this will be reviewed at 3 months incase estimates are incorrect and require adjustment on her portion)
Well done. write that clearly in your lodger agreement.

- I don't want to take a deposit for her,
Unwise - especially as you said above " I want to set up a proper agreement - which is somewhat informal and flexible, but protects both my cousin and me. "
!!!!

and I understand I don't need to protect a deposit for a rent a room scheme anyway,
Correct
so assume this is fine? Or is it worth taking a small nominal deposit (e.g. £100)?
If you charge rent weekly, take a week's rent as deposit.
If you carge rent monthly, take at least 2 week's rent if nt a month as deposit.

- I don't want her to be restricted on notice, but have said 2 weeks for both parties, just so she has some reassurance I won't kick her out.
I always advise 1 week each way for lodgers, written into th agreement. If things turn sour, which they can even with family, you want a quick resoluton. It's your home.

- I am moving in and the room is unfurnished, and she is bringing her own furniture. However, I understand that renting a room to a lodger requires it to be furnished?
Not as far as I know.
I would furnish to basic standards for her, but she has everything she needs (a bed and a mattress and there is cupboards in the room). Is this a huge issue if she is happy with doing this?
So long as the inventory reflects what you provided.

Finally, stupid question, if I am asked the lodgers address on the agreement - would I put their current address rather than my own as they will sign before they move in?
Current.
Though as it is for you to decide what goes on the agreement, it is not a question of "If I am asked the lodgers address on the agreement ...". It is yur agreement!
Thanks for your patience folks...! I as always appreciate the wise opinion and sage advice of folks in this forum :money:

I would also always clearly agree house rules, to avoid misunderstandings/disputes later. These could be in the agreement, on a seperate paper, or simply discussed agreed (though writtten is better so you can refer back later). Things like

* can lodger have guests? Overnight guests? Any limit on frequency?
* how will cleaning be shared?
* payment for consumables: toilet paper, soap, salt/pepper, milk, washing up liquid etc
* noise. Any curfu on music etc
* any other issues you think might arise.


See also:

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with a resident landlord & shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' & 'same property' (S31 & Schedule 1 (10).

See:

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 (HMRC guide for tax-free income from lodgers)

00ec25

for tax purposes (rent a room scheme) it matters not if the "room" is furnished or unfurnished. The key criteria are that the LL a) is resident and b) shares "some basic facilities" with the lodger.

And before anyone pipes up, yes, having said that, there are further more esoteric circumstances where the LL is resident in another part of the building yet is still "resident" for tax purposes

Lurkingtoposting17

00ec25 : Thank you, I read two conflicting things regarding furnished and unfurnished. I wouldn't be adversed to furnishing it for her, but seems stupid when she has it. So thank you for confirming.

G_M: Thank you, the usual sage advice and links - makes me happy. My conveyancer have sent me documents saying I'm obliged to let them know about any adult occupiers... now yes, I am worried if I tell them she is a lodger, it would chuck a cat amongst the pigeon with regards to them approving the mortgage! As my cousin doesn't have the same surname it's not immediately obvious, that she is family. However is telling them I have another adult occupier the same as telling them I have a lodger? I don't want to end up inadvertently in breach of contract because frankly im a bit of a researcher and a goody two shoes

Thanks everyone else for your advice too! :beer:

NinaSwiss

Lurkingtoposting17 wrote: »

00ec25 : Thank you, I read two conflicting things regarding furnished and unfurnished. I wouldn't be adversed to furnishing it for her, but seems stupid when she has it. So thank you for confirming.

G_M: Thank you, the usual sage advice and links - makes me happy. My conveyancer have sent me documents saying I'm obliged to let them know about any adult occupiers... now yes, I am worried if I tell them she is a lodger, it would chuck a cat amongst the pigeon with regards to them approving the mortgage! As my cousin doesn't have the same surname it's not immediately obvious, that she is family. However is telling them I have another adult occupier the same as telling them I have a lodger? I don't want to end up inadvertently in breach of contract because frankly im a bit of a researcher and a goody two shoes

Thanks everyone else for your advice too! :beer:

Something similar happened when my mum was in the process of buying a place (though it fell through). She disclosed my brother as the adult occupier and the bank sent him a disclaimer form to complete. Something about him having no intentions to claim rights on the house (I'm sure someone else can word this better).

Lurkingtoposting17

Ok, I will let them know she is an adult occupier and I won't mention why that arrangement unless asked. We don't have the same name, so she could be my lover for all they are concerned and I am sure people don't have to jump through hoops to have their partners live with them surely ! :rotfl:

Mind you, nothing about this process would surprise me!

G_M

Is she going to move in on day 1?
Is she going tto live there permenanty?

Yes, if you tell the lender, they will probably want a 'disclaimer' signed, but I'd be inclined not to rock the boat.

You buy and move in. Later (a week? a month? a year?) you decide to take a lodger. Your mortgage agreement is unlikely to prohibit this (it will say 'not to part with or let the property' or such-like) so I don't see a problem.

However if you want to dot the 'i's and cross the 't's in advance, then inform the lender and hope you don't open a can of worms......

katejo

Lurkingtoposting17 wrote: »

Hi All

I am buying my first property, about to exchange. My cousin has asked to lodge from me, which I am happy with. For various reasons, it would suit us both (I was not planning to have a lodger, and she needs a degree of flexibility with her job).

However, after reading horror stories here about lodgers and rentals to family members I want to set up a proper agreement - which is somewhat informal and flexible, but protects both my cousin and me.

- I have informed my mortgage lender I intend to take in a lodger under the rent-a-room scheme

- I have agreed a rental price (base weekly rate plus bills - I have broken down the estimate of bill portion and have said that this will be reviewed at 3 months incase estimates are incorrect and require adjustment on her portion)

- I don't want to take a deposit for her, and I understand I don't need to protect a deposit for a rent a room scheme anyway, so assume this is fine? Or is it worth taking a small nominal deposit (e.g. £100)?

- I don't want her to be restricted on notice, but have said 2 weeks for both parties, just so she has some reassurance I won't kick her out.

- I am moving in and the room is unfurnished, and she is bringing her own furniture. However, I understand that renting a room to a lodger requires it to be furnished? I would furnish to basic standards for her, but she has everything she needs (a bed and a mattress and there is cupboards in the room). Is this a huge issue if she is happy with doing this?

I have read a couple of resources and I think I am ok in a legal sense on the first 4 points, unless anyone knows differently? The last point is the one I am completely unsure of and would appreciate any feedback on that point - I have read something saying the room must be furnished and something else saying it doesn't matter.

Finally, stupid question, if I am asked the lodgers address on the agreement - would I put their current address rather than my own as they will sign before they move in?

Thanks for your patience folks...! I as always appreciate the wise opinion and sage advice of folks in this forum :money:

Remember to let your home insurer know when you take out a buildings/contents policy. Some insurers won't allow it. Ones which do include Direct Line and Nationwide.