Thinking of having Lodgers

Comms69

NewMember wrote: »

Thanks Nina,
I was under the impression that unless I directly say or state in writing that their contribution is going to pay part of the mortgage, they cant claim an interest. For example, If i were to state the monthly "rent" would be £300, then that's fine, no claim, as it's not necessarily going towards the mortgage and could just be profit in my pocket. But if i were to say something along the lines of "your part of the mortgage repayment" or something to that affect, then they can claim an interest. Is this incorrect?

Ye that's not quite how it works...

Exodi

NewMember wrote: »

Thanks Nina,
I was under the impression that unless I directly say or state in writing that their contribution is going to pay part of the mortgage, they cant claim an interest. For example, If i were to state the monthly "rent" would be £300, then that's fine, no claim, as it's not necessarily going towards the mortgage and could just be profit in my pocket. But if i were to say something along the lines of "your part of the mortgage repayment" or something to that affect, then they can claim an interest. Is this incorrect?

I think it's mostly irrelevant that the rent is paying the mortgage, or if he knows it is. If this was the case then most tenants on the planet would have an interest in the properties they rent by virtue of contributing towards the mortgage.

The first 'rule' for proprietary estoppel is that there is an assurance (the lodger has been led to believe he would gain an interest in the property) - unless you're deceiving the lodger into thinking he'll own part of the house, you'll be fine.

I think the landmark case is Liden v Burton (2016) in which an interest was established - it may be an interesting read for you.

trailingspouse

For the Rent-a-Room scheme, you can only have one lodger. And as others have said, lodgers don't share your bed with you...
Not sure what you mean by 'is it worth treating them officially as lodgers?' If you have a lodger, then they are officially a lodger, and should be treated as such.
Remember you need to tell your mortgage company and your house insurers that you'll have a lodger. You also need a gas safety certificate. Having a lodger isn't as onerous as having a tenant, but they do still have a few rights.

Take a look at this link - https://www.spareroom.co.uk/content/info-advice/info-and-advice/
there's lots of helpful advice.

hazyjo

trailingspouse wrote: »

For the Rent-a-Room scheme, you can only have one lodger.

Pretty sure you can have more than one. Don't make it an HMO. Two should be fine. But only the first £7500 falls under the tax free rent a room scheme.

NewMember

Exodi wrote: »

I think it's mostly irrelevant that the rent is paying the mortgage, or if he knows it is. If this was the case then most tenants on the planet would have an interest in the properties they rent by virtue of contributing towards the mortgage.

The first 'rule' for proprietary estoppel is that there is an assurance (the lodger has been led to believe he would gain an interest in the property) - unless you're deceiving the lodger into thinking he'll own part of the house, you'll be fine.

I think the landmark case is Liden v Burton (2016) in which an interest was established - it may be an interesting read for you.

This was the conclusion I came to as well, thanks for confirming.

trailingspouse wrote: »

For the Rent-a-Room scheme, you can only have one lodger. And as others have said, lodgers don't share your bed with you...
Not sure what you mean by 'is it worth treating them officially as lodgers?' If you have a lodger, then they are officially a lodger, and should be treated as such.
Remember you need to tell your mortgage company and your house insurers that you'll have a lodger. You also need a gas safety certificate. Having a lodger isn't as onerous as having a tenant, but they do still have a few rights.

Take a look at this link - spareroom.co.uk/content/info-advice/info-and-advice
there's lots of helpful advice.

Thanks, so with my Partner sharing my bedroom/house, they would not be classed as a lodger even though they are not on the mortgage and would be paying rent? So I would actually just have to declare the one lodger (in this case, my friend) and as far as my partner is concerned, i don't need to tell anyone? Is that correct?

hazyjo

NewMember wrote: »

Thanks, so with my Partner sharing my bedroom/house, they would not be classed as a lodger even though they are not on the mortgage and would be paying rent? So I would actually just have to declare the one lodger (in this case, my friend) and as far as my partner is concerned, i don't need to tell anyone? Is that correct?

100% not a lodger.


You should tell your lender and your insurer.

connors07

It can be tricky with friends.

Last year what started out as a favour became a lodging situation that lasted a year. I looked for advice on here and pretty much every comment was that "we'd fall out", "you'll ruin your friendship". That was never the case though although it did take a while to get used to living with someone else (I did go from living alone prior to this).

I have since taken on another lodger recently, again a friend, thinking the first time went well and isn't a stranger. Not so good this time around, it isn't friendship wrecking or anything but I've realised less compatible when you are sharing living spaces. The only way you see little annoyances is by living together.

What I would suggest regarding rent/bills is a lower basic rent but a share of the bills. This will make your lodger more likely to respect basics like leaving electrical goods on for no real reason. Some if they are a little bit cold instantly put the heating on, I would put on a jumper/wear slippers, some don't want to wear much in December but have it feel like a Indian Summer heatwave. We're all different.

Ground rules are a must. Keep the integrity and respect the rules you make. Wishing you good luck.

FreeBear

hazyjo wrote: »

Pretty sure you can have more than one. Don't make it an HMO. Two should be fine. But only the first £7500 falls under the tax free rent a room scheme.

Another thread that answers the question - https://forums.moneysavingexpert.com/discussion/5644382/rent-a-room-relief-multiple-rooms


As long as the rooms are furnished, you are a resident landlord, and the total income is less than £7500 per year, there is no limit on the number of lodgers under the rent a room scheme. But three or more puts you in HMO territory, and two or more could have capital gains tax implications if/when you sell.

PasturesNew

The friend thing is a bad idea, they'll have a different opinion to you over how long they think they're staying and, once in, they'll either turn out to be:

1/ friend you wish you'd never asked as it's now all awkward.
2/ friend who moves out after 2-3 months as they feel it's not their home as you two are a couple and outnumber them and it's getting on their nerves.

G_M

* Lodgers: advice & links for landlords & lodgers