Although I wrote about this on Day 16 of my 21 days of tips for lodger landlords, I think it is worth repeating.
- The tenancy deposit regulations only apply to assured shorthold tenancies
- It is legally impossible for someone renting a room in your home to have an assured shorthold tenancy
- Therefore tenancy deposits taken from lodgers do not need to be protected on a government authorised tenancy deposit scheme.
Expanding a bit on this, most lodgers will not have a tenancy at all, as they will not have ‘exclusive occupation’ of their room. See more of this on Day 1 of the 21 days of tips and my five tips on how to avoid creating a tenancy.
Even if your lodger does acquire a tenancy of his bedroom, it is not possible for this to be an assured shorthold tenancy. This is because the Housing Act 1988 specifically excludes tenancies with resident landlords from being assured shorthold tenancies.
The only time an AST can be created where the landlord lives in the same building is where that building is a purpose built block of flats and the landlord lives in one and the tenant in another.
So if your lodger tells you that you are breaking the law by not protecting the deposit he has paid, do not worry, he is wrong.