I did an advice recently for a client who wanted to let out some self contained accommodation in his house (effectively a ‘granny annex’) but was anxious to avoid creating a tenancy. Although this is covered in part here, I thought that it might be worth repeating some of the advice I gave him:
To prevent a tenancy being created you need to ensure that the occupier does not have ‘exclusive occupation’ of the property/rooms. This means that you have to have built into your contract, reasons for you to go in and out of them (respecting your occupiers privacy) as of right (ie without having to ask permission first). Here are some suggestions:
- Tip 1 – Provide clean sheets (and perhaps towels) You do not need to make the bed. but it gives you a excuse to go in and out of the room/s without question. Make a practice of actually going into the rooms rather than just leaving the sheets in the passage outside
- Tip 2 – Provide room cleaning. If you do not want to do the cleaning yourself, employ a cleaner (and set the rent so the cleaner’s costs are covered). Make it clear to the occupier that the cleaner is part of the deal as you want to be sure that the property is being properly looked after
- Tip 3 – deal with putting out the occupiers rubbish for them. For example provide black bin bags and say that you will be going into their kitchen area to collect them once or twice a week (depending on when the bin men come).
- Tip 4 – require access to test the smoke alarms regularly. Needless to say, you will have to have smoke alarms fitted for this, but you should have this anyway
- Tip 5 – provide breakfast and /or other meals from time to time, which are served in their rooms.
Where you are renting out self-contained rooms in your home, where you do not share living accommodation with the occupier, you do need to be careful if you want to prevent a tenancy arising (particularly if it is important that there is no tenancy, for example, if this is a requirement of your mortgage).
However so long as you provide at least two services – such as those listed above (ideally at least clean sheets and cleaning) you should be all right – so long as you continue to provide them. If you stop, the occupation may convert to a tenancy.
Note also that as you do not share living accommodation, the eviction procedure set out in Day 20 of my 21 days of tips, cannot be used.
A bit about ‘common law’ tenancies
Finally – there is nothing wrong in itself in having a tenancy. The main problem is that it may be prohibited by your mortgage company. However, if this is not the case – why not just accept it.
It will not be an assured shorthold tenancy as you will be a resident landlord and the eviction procedure, if you ever need to evict, is different (for example, you will not be able to use section 21). The good news is that deposits will not need to be protected in a scheme.
There is a lot of information about this type of ‘common law’ tenancy on my Landlord Law site.