Any way around taking a lodger if mortgage lender doesn't allow?

macman

Much safer if the OP takes no rent, be it in cash or in kind, eg dog-sitting. If there is no consideration, then there can be no question of a tenancy being created.

saajan_12

Hannimal said:

greatcrested said:

As Saajan also says, as an added security to avoid any suggestion the friend is a tenant, don't accept rent either in cash OR in kind, but agree he is dog/house-sitting.

Post 10: Lodgers: advice & links for landlords & lodgers

Thank you. The post you linked is very helpful. However, I am a little confused as to why not charge a lodger rent?

Its only as an extra assurance because the holiday is at the very start of the friend staying. If you had an established landlord-lodger relationship with you living there, then there'd be no problem with a short holiday. But as its at the start, there's less history to point to. If you go on holiday, and the next day friend changes the locks, chucks out yourself and says "what live in landlord, he's gone for years" then that MIGHT look like a tenant. 

Once you're back, you can certainly charge rent and class the friend as a lodger. 

Hannimal

I think I said this already but my plan was not to collect rent while friend is dog sitting but to collect it upon my return for the following months. I know the friend will not stay beyond the 3-4 months due to visa ending. 

Hannimal

I've still not had a response to what is my actual concern and I didn't have the time to phone my lender today. As I know they don't allow letting it feels probable they won't allow taking a lodger. If this is the case, what are my options? thanks

greatcrested

Hannimal said:

I've still not had a response to what is my actual concern and I didn't have the time to phone my lender today. As I know they don't allow letting it feels probable they won't allow taking a lodger. If this is the case, what are my options? thanks

Yes you have had an answer!

You do NOT need lender consent for a lodger, so your 'feeling' is totally misplaced. The reason we have gone to great lengths to explain the difference between a lodger and a tenant is precisely to show that the lender not allowing one does not mean they don't allow the other.

Asking for it will open a can of worms!

Hannimal

Having read some of the websites linked here and elsewhere on this forum, they do say asking lender for written consent. For example, point 2.2 here 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#before-arranging-a-let--some-points-to-consider

greatcrested

Hannimal said:

Having read some of the websites linked here and elsewhere on this forum, they do say asking lender for written consent. For example, point 2.2 here 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#before-arranging-a-let--some-points-to-consider

Again, detailed legal terminology is confusing things.

Just as 'lodger' and 'tenant' have significant different legaldefinitions and implications, the word 'let' is also significant, and different to granting a 'licence'.

'Letting' a room, or part/whole of a property, is equivalent to granting a tenancy to a tenant.

Granting a 'licence' to a lodger is very different legally.

Law students spend a year studying Housing Law at uni and this is the sort of stuff they have to become familiar with.

But I assure you, provided you do not 'let' the property (or any part of it), or grant a tenancy, you donot need consent from the mortgage lender. The lender is only concerned if you give away significant rights to the propery (which would make repossession difficult for them if you sopped paying the mortgage).

Granting a Licence to Occupy gives very few, and only temporary, rights.

In fact, every time you allow someone access you are granting them a Licence. Your mum comes to dinner? She has a licence to occupy for the period of the evening. But if half-way through the meal she p*ss*s you off, you can withdraw the licence and throw her out! Nothing written of course, it's all implied, but legal nonetheless.

Same applies to a lodger, though they have a few more contractual rights based on whatever the written or verbal contract says.

It is only when you let a property (or part) to a tenant, that that person gains additional statutory rights based on Acts of Parliament.

Mickey666

rik111 said:

What a load of nonsense. 
1. You can have a lodger in your home nothing to do with the bank. 
2. What exactly do you think is going to happen / how are they going to find out / do you think they will even care..
3. Grow a pair and do whatever you like with your own house and stop worrying needlessly. You sound like you take life far too seriously. 

I must say that I tend to agree with this.

There seem to be a lot of similar threads on here where the advice is to be careful about mortgage company restrictions etc.  Being retired, I may be out of touch with the modern mortgage market but I've had a few mortgages in my time and about the only condition I can recall being important - apart from the obvious repayment one - was that the property had to have buildings insurance.  More to the point, I've never once had a mortgage company contact me to check up on how I was using my home or who was living in it.  I once moved into a new home without selling the old one (in those good old days when there was no SDLT penalty for owning two homes!) .  It was empty for a couple of months before I let a friend stay there for about three months as she had sold her house and not yet completed on the one she was buying.  No tenancy agreement,no safety certificates, no 'rent' (not even in brown paper envelopes!), just payments to cover the bills, all of which were still in my name.  Basically just a friend staying in my house as a guest.  I doubt the mortgage company would have cared less even if I'd asked their permission, even though it didn't cross my mind to ask.

But perhaps times have changed since the 1990s?

MaryNB

Mickey666 said:

rik111 said:

What a load of nonsense. 
1. You can have a lodger in your home nothing to do with the bank. 
2. What exactly do you think is going to happen / how are they going to find out / do you think they will even care..
3. Grow a pair and do whatever you like with your own house and stop worrying needlessly. You sound like you take life far too seriously. 

I must say that I tend to agree with this.

There seem to be a lot of similar threads on here where the advice is to be careful about mortgage company restrictions etc.  Being retired, I may be out of touch with the modern mortgage market but I've had a few mortgages in my time and about the only condition I can recall being important - apart from the obvious repayment one - was that the property had to have buildings insurance.  More to the point, I've never once had a mortgage company contact me to check up on how I was using my home or who was living in it.  I once moved into a new home without selling the old one (in those good old days when there was no SDLT penalty for owning two homes!) .  It was empty for a couple of months before I let a friend stay there for about three months as she had sold her house and not yet completed on the one she was buying.  No tenancy agreement,no safety certificates, no 'rent' (not even in brown paper envelopes!), just payments to cover the bills, all of which were still in my name.  Basically just a friend staying in my house as a guest.  I doubt the mortgage company would have cared less even if I'd asked their permission, even though it didn't cross my mind to ask.

But perhaps times have changed since the 1990s?

It got brought up in my mortgage application with Halifax recently. They said they only allow a max of two lodgers. It would be pretty hard for them to check but a non issue for me since I'm only buying a two bed house and will only be getting one lodger.

Hannimal

greatcrested said:

Hannimal said:

Having read some of the websites linked here and elsewhere on this forum, they do say asking lender for written consent. For example, point 2.2 here 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#before-arranging-a-let--some-points-to-consider

Again, detailed legal terminology is confusing things.

Just as 'lodger' and 'tenant' have significant different legaldefinitions and implications, the word 'let' is also significant, and different to granting a 'licence'.

'Letting' a room, or part/whole of a property, is equivalent to granting a tenancy to a tenant.

Granting a 'licence' to a lodger is very different legally.

Law students spend a year studying Housing Law at uni and this is the sort of stuff they have to become familiar with.

But I assure you, provided you do not 'let' the property (or any part of it), or grant a tenancy, you donot need consent from the mortgage lender. The lender is only concerned if you give away significant rights to the propery (which would make repossession difficult for them if you sopped paying the mortgage).

Granting a Licence to Occupy gives very few, and only temporary, rights.

In fact, every time you allow someone access you are granting them a Licence. Your mum comes to dinner? She has a licence to occupy for the period of the evening. But if half-way through the meal she p*ss*s you off, you can withdraw the licence and throw her out! Nothing written of course, it's all implied, but legal nonetheless.

Same applies to a lodger, though they have a few more contractual rights based on whatever the written or verbal contract says.

It is only when you let a property (or part) to a tenant, that that person gains additional statutory rights based on Acts of Parliament.

Thank you very much for taking the time to write this, this is very helpful