Letting room in London flat used as second home

Gus123

I'd like some advice on how to let a room in the property we use as our London base.

We moved our main home from London to the West Country in 2023.  It is designated as my main residence with HMRC.

I have a 2-bed flat in central London which I used to let out.  The AST came to an end in October 2023. One of the parties to the tenancy moved out. The other one has stayed (with my permission!)  We use the second bedroom when we are in London (typically 3 nights a week).

The tenant still in the property agrees to pay me for the use of the room.  She would like a formalised agreement.

In this case - when I am using the property for 3 nights a week - am I considered a resident landlord?  What type of agreement is best to use in this situation: a tenancy agreement or a licence to use the room?

FreeBear

Gus123 said:  In this case - when I am using the property for 3 nights a week - am I considered a resident landlord?  What type of agreement is best to use in this situation: a tenancy agreement or a licence to use the room?

Unlikely. Are you paying the council tax ?

My opinion - The tenant will be on an AST, and should be providing you with a lodger's agreement (with all the protections that it doesn't provide).

theartfullodger

FreeBear said:

Gus123 said:  In this case - when I am using the property for 3 nights a week - am I considered a resident landlord?  What type of agreement is best to use in this situation: a tenancy agreement or a licence to use the room?

My opinion - The tenant will be on an AST, and should be providing you with a lodger's agreement (with all the protections that it doesn't provide).

Agreed:  ....

sheramber

I presume the tenant is already paying rent.
does she have a tenancy agreement? 

Is she now going to pay increased rent to cover using the second room on the 4 days you are not there?

ThisIsWeird

Who pays the CT? Who pays the energy bills? On whose name is the broadband - that sort of stuff?

(Having asked all that, I still don't know if it would make them a lodger.)

propertyrental

Unless you, the departing tenant, and she all agreed a mutual surrender of the tenancy, then the fact that the fixed term ended in Oct 2023 means that that AST continued on a periodic (rolling) basis. In which case she and/or the departed tenant, should still be paying you the original rent. If you then turn up 3 days a week you'd be either her guest, or, if you pay her rent, her lodger. (irrespective of whether she is in rent arrears or not).

Alternatively, if you DID agree a mutual surrender of the tenancy in 2023, then presumably you agreed a new tenancy with her as sole tenant. This may have been verbal. What were the terms? What was the agreed rent? What was she renting? The house or the room?

But irrespective of whether to was just the room or not, the fact that she had exclusive occupation (at least initially) means she was a tenant renting the house.

You could not then just turn up and start using part of the property she was a tenant in, without her consent. Did she give you consent? On what terms? Were you her guest or her lodger?

Either way, you cannot now impose a new contract on her without her agreement, and I suspect she has been misled as to her rights (and obligations)......

ThisIsWeird

I think the main Q the OP wishes an answer for, if they did agree a mutual surrender of the original tenancy, is can the OP consider this home a 'residence' for the purposes of the occupant now being classed as a 'lodger', and the OP retains full rights and access?
If the CT, energy, etc is still in the occupant's ('ex'-tenant's) name, then I'd have thought, not a chance - the occupant remains a tenant, and the AST is rolling.
But, if these bills have reverted to the owner following the presumed surrender, what then?

GDB2222

I think people are making this far too complicated. Why manufacture a disagreement when there is none?

It's clear that what all parties intended was that the original tenancy came to an end last year, and the tenant became a lodger. I assume that the tenant paid less as a result. It’s a good point that the op is responsible for council tax since the tenancy ended. 

I would just do a standard lodger agreement and maybe add a paragraph where all parties confirm the original tenancy came to an end last year and the lodger has been a lodger since then. 

ThisIsWeird

GDB2222 said:

I think people are making this far too complicated. Why manufacture a disagreement when there is none?

It's clear that what all parties intended was that the original tenancy came to an end last year, and the tenant became a lodger. I assume that the tenant paid less as a result. It’s a good point that the op is responsible for council tax since the tenancy ended. 

I would just do a standard lodger agreement and maybe add a paragraph where all parties confirm the original tenancy came to an end last year and the lodger has been a lodger since then. 

That's common sense, indeed, but I wonder if it covers all legal bases? I don't know.

Has the original deposit been returned? Etc etc etc.

FreeBear

ThisIsWeird said:

I think the main Q the OP wishes an answer for, if they did agree a mutual surrender of the original tenancy, is can the OP consider this home a 'residence' for the purposes of the occupant now being classed as a 'lodger', and the OP retains full rights and access?
If the CT, energy, etc is still in the occupant's ('ex'-tenant's) name, then I'd have thought, not a chance - the occupant remains a tenant, and the AST is rolling.
But, if these bills have reverted to the owner following the presumed surrender, what then?

Shelter have a piece on just this subject - https://england.shelter.org.uk/professional_resources/news_and_updates/tenant_or_lodger

In a nutshell, the OP was not in residence when the tenant first moved in. It is unclear whether the OP intends to make this his primary and main residence (not that it really matters). Even with mutual agreement, the tenant would still be on an AST and subject to all the protections that the law provides. A contract, regardless of how it is drafted, can not override law.

Bookworm105

the answer to the OP's question: given the facts stated, (occupation by the owner is for 3/7ths and the main home is very clearly the West Country property), is that they are a tenant, not a lodger 

3 How exactly is a landlord considered to be ‘resident’ in law? Does it make a difference if I don’t live in the property all the time?

For lettings started from 15 January 1989, the important point is whether you are using the property as an only or principal home, both at the start of the letting and throughout it. It is accepted that, for short periods, a landlord may not live in the property yet still be considered to be resident: so long as he or she intends to return and this is apparent, for example if he or she has left belongings. However, only a court can say for certain whether a landlord has maintained enough residence in the property to count as a resident landlord
....
 To count as an excluded tenancy or licence, the landlord does not have to live in the house continuously, although it must have been his only or main home both before and at the end of the let.
Letting rooms in your home: a guide for resident landlords - GOV.UK (www.gov.uk)

So....
The OP needs to use an AST where the tenant has exclusive use of a nominated room and access to / sharing of common parts of the property.
The OP retains a nominated room of their own and has right of access to that room, and use of common parts of the property, without needing to give notice to enter. (The OP is not a lodger of the tenant, that would be silly).
In other words it becomes an AST "house share", but not, in housing law terms, a home in multiple occupation (HMO) as there are only 2 occupants (housing law 2 or more households with 3 or more persons).

However, from the council tax perspective it is an HMO as the definition of HMO for CT purposes needs only 2 households and 2 occupants sharing amenities (called the "standard test"). Therefore under CT law, the only person liable to pay CT is the landlord (whether "resident" or not in the property). It is important to make the council aware of the status as a "council tax HMO" so there cannot be any comeback over the status of the property as liable for "second home" council tax (which may be at higher rate depending on the council).
Shelter Legal England - House in multiple occupation (HMO) definition - Shelter England

Been there, done that

Rent received cannot be taxed using rent a room allowance rules as it is not the main home and they are not a lodger. It must be taxed under normal rental tax rules.
The AST is the same as any other AST in operation, just that it refers to "a room", not whole property