Allowable expenses for housing benefits - lodger income

sourpuss2021

theoretica said:

I don't know a definite answer - but it did look like a potential complication that needs an answer before going ahead.  Otherwise it could be a loophole unscrupulous landlords would use to get around HMO restrictions - and loopholes like that do tend to get closed.

Yes, although the drawback from the head tenant’s perspective is having to take sole responsibility to the landlord for the whole rent for the 2-bed (plus converted lounge) or 3-bed property.   

So if it’s a potential loophole then it wouldn’t be common. Much easier for landlord to just rent to a well-off couple in the first place.  

But then again here I am, personally responsible for the rent for 3 flats, so anything can happen!

sourpuss2021

HillStreetBlues said:

theoretica said:

Having a lead tenant and two lodgers in your property may mean that it would count as a HMO.  An owner and 2 lodgers wouldn't - but landlord renting to three people would...   It seems complex, and risks getting your landlord into a lot of trouble.

It's not a HMO according to Shelter.

The OP is the immediate landlord to the lodgers, as the lodgers pay the OP.
The head landlord is the one(s) that own the property.

For a HMO it's where the immediate landlord lives, not the head landlord


It it was a house that is now converted into flats the "lodgers"  could be "occupier with basic protection"


EDIT Link
https://england.shelter.org.uk/housing_advice/private_renting/subtenants

I believe that the distinction is that I am not the property owner.   So my landlord would not be allowed to let me have two lodgers.   

HillStreetBlues

sourpuss2021 said:

I believe that the distinction is that I am not the property owner.   So my landlord would not be allowed to let me have two lodgers.   

Why is that? (I could be missing something)
You have 2 flats,  I am taking as you call them flats they are self contained.

And you also would have yourself and two lodgers  that share bathrooms./ kitchen etc.

sourpuss2021

HillStreetBlues said:

sourpuss2021 said:

I believe that the distinction is that I am not the property owner.   So my landlord would not be allowed to let me have two lodgers.   

Why is that? (I could be missing something)
You have 2 flats,  I am taking as you call them flats they are self contained.

And you also would have yourself and two lodgers  that share bathrooms./ kitchen etc.

The property as a whole (three self contained flats) is confirmed not to be an HMO.

The two flats I sublet but do not have access to, are individually not HMOs either since they have just two occupants each.

However it looks like if I took a second lodger in my flat, then I’d be putting my landlord the owner in breach.   The source I’ve found for this is the attached screenshot from the website I linked to upthread.

sevenhills

How many lodgers can you have on rent a room scheme?

It's possible to have an HMO when you're a live-in landlord too, though. In this setup, you're allowed to have two lodgers before your property is classified as an HMO – but when it gets to three, non-family, paying lodgers, the rules change.

It's rather complicated.

sourpuss2021

sevenhills said:

How many lodgers can you have on rent a room scheme?

It's possible to have an HMO when you're a live-in landlord too, though. In this setup, you're allowed to have two lodgers before your property is classified as an HMO – but when it gets to three, non-family, paying lodgers, the rules change.

It's rather complicated.

It looks like only a live-in landlord who owns the property is allowed to have two lodgers.

A tenant who is a live-in landlord is not permitted two lodgers.  Because he would then place the head landlord, the owner, in the position of having three unrelated households occupying the property.  Even though only one of them is the named tenant on the AST.

Thanks for mentioning the Rent a Room scheme.  I am already over the £7.5k limit with one lodger.   So even if I were allowed a second lodger I’d have to factor tax in.   Though I’m far below the tax free threshold on my overall earnings, it would become an issue when I’m back in full time work.

sourpuss2021

Later this year I might convert the lounge into a bedroom anyway, then have the current lodger’s room for myself along with my bedroom.  They’re on slightly different levels with the bathroom in the middle.  

It would rent for £300 a month more I reckon - it’s four times the size of the single room! I’d be giving up by far the best room but it would appeal to absolutely anyone looking in this area, while the single just appeals to students or people who are out a lot!   

sevenhills

sourpuss2021 said:

Thanks for mentioning the Rent a Room scheme.  I am already over the £7.5k limit with one lodger.   So even if I were allowed a second lodger I’d have to factor tax in.   Though I’m far below the tax free threshold on my overall earnings, it would become an issue when I’m back in full time work.

You seem to be an honest and resourceful person, I am sure you can earn more given the correct circumstances.

HillStreetBlues

sourpuss2021

Looking more into the rules I think the site you linked to is accurate on how a HMO is classed.

So I would say stick to one lodger

HillStreetBlues

With your landlord  is the payments broken down?  to you pay them for the flats you sublet and the rest of the house you live in  or do you just pay them one lump sum to cover everything?