One of the commentators to Day 1 of my 21 days of tips for Lodger Landlords asked what was wrong in allowing your lodger to have a tenancy, bearing in mind that you would be able to evict without getting a court order if you shared living accommodation. These matters deserve to be set out in a proper post rather than being buried in the comments.

Allowing a lock on the door

I said in my earlier post that you should avoid putting a lock on your lodgers door.  I should say here that a lock does not equal a tenancy in all cases.  For example I advised once in a case where the landlord was a sleepwalker and his lodger had a lock on the door to stop him walking in at night!

Generally one of the main signs of a tenancy is that the tenant has ‘exclusive occupation’ ie the right to keep everyone out of the property (in this case the tenant’s room), even the landlord.  So if the door has a lock and the tenant is given a key, this will not be a tenancy if the landlord also has a key and regularly goes in from time to time, for example to do cleaning or to change the sheets.

However if the landlord does not have a copy of the key and has not entered the room for a couple of years, then there will be a strong probability that the occupier will be a tenant.

Reasons not to grant a tenancy

But what is wrong with this anyway you might ask?  Here are a few reasons:

• It will mean that you are legally bound by the statutory repairing covenants set out in s11 of the Landlord and Tenant Act 1985.  I discussed these on day 4 of my 21 days of tips.  Under these the landlord will be responsible for keeping in repair the structure and exterior of the property, and the installations for the supply of utilities and space and water heating.  Now I am not saying that lodger landlords should neglect these matters.  And anyway the landlord will be vulnerable to improvement orders from the Local Authority if the property is in poor condition.  However Lodger Landlords will not really want their lodger to have the right to sue them in respect of the condition of their own home!

• It will probably put you in breach of the terms of your mortgage or insurance policy.  The questioner on the Day 1 post, also asked me if taking in a lodger would be deemed to be ‘subletting’ and also put you in breach.  The answer to that, is that subletting is generally taken to mean granting a tenancy.  However you should always speak to your mortgage company about your intentions, and your insurance company, whether you intend letting to a tenant or a lodger, so as to be on the safe side (as discussed on days 2 and 3).  The point is though, that your mortgage company will not normally mind you taking in a lodger.  They will not want you to sublet to a tenant though. So tenancies should be avoided.

• Finally, if you grant a tenancy you will lose control over part of your home. You will not be entitled to go in, for example, to check up on its condition and repair, without asking permission, and the tenant will be legally entitled to refuse and keep you out.  This could be serious, for example if you need to carry out repair work.  If you are renting a room to someone in your own home, it is better to use the more flexible lodger arrangement than lose control by allowing a tenancy situation to develop.

In some circumstances of course, giving a tenancy may not be a problem.  However if you do decide to grant a tenancy, then let it be intentionally rather than by accident.  Then you can charge accordingly and will know where you stand.

What are your views on this?  Are there any other reasons not to grant a tenancy which I have left out?  Have you ever experienced any problems with inadvertent tenancies?

Lodger eviction

In Day 20 of my 21 days of tips for lodger landlords, I described a procedure for evicting lodgers without getting a court order. When exactly can this be used?

The answer to this lies in the Protection from Eviction Act 1977.  This is the act which says that all evictions of residential occupiers must be done through the courts, and that if a residential occupier is evicted without a court order, then this is a criminal  offence. (Note that in this post I will use the word ‘occupier’ a this covers both lodgers and tenants).

However the act recognises that not always be appropriate to force someone to get a court order for possession, and sets out a number of exceptions to the general rule.

These are set out in section 3 of the Act, and they are known as ‘excluded tenancies and licenses’.  They include:

• where the occupier (whether or not he or she is a tenant) shares living accommodation with the landlord, and
• where the landlord was living at the property as his main (or ‘principal’) home and sharing living accommodation with the occupier from immediately before the occupier started living there to the time when the occupation ends, and
• the shared accommodation is not just storage areas, halls, corridors or staircases, as these don’t count. It must be proper living accommodation such as a sitting room, kitchen, and/or bathroom (and preferably more than just one room).

Excluded tenancies and licenses also include those granted for a holiday, so the procedure given on Day 20 will apply also if you provide B&B accommodation to holiday makers.

Note that if you have let accommodation in your home which is entirely self contained (and which is not holiday accommodation let to someone on a genuine holiday), then you *will* need a court order.  For more information on this, see my Landlord Law web-site.

Avoiding a tenancy in a self contained letting

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 can be served in their rooms if you prefer.

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 to prevent a tenancy arising (particularly if it is important that there is not tenancy, for example if this is a requirement of your mortgage company).

However so long as provide at least two services such as those listed above (ideally at least clean sheets and cleaning, and preferably more than two) 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.

I did a talk recently at the Landlord & Buy to Let Show in London (5/3/10), and it was clear from some of the questions asked, that, even though I covered this topic on Day 1 of my 21 days of tips, people are confused about the difference between a lodger and a tenant.

I am not surprised!  It is a typical lawyerlike distinction, and can be confusing even for the lawyers.  However it is quite important. Why?

• Because a tenant ‘owns’ the property, room, or whatever, for the period of his tenancy or lease
• The tenant therefore has the legal right to keep the landlord out of the property (or room)
• The landlord may have to get a court order for possession to evict
• The landlord has various repairing duties which he cannot pass on to the tenant (this comes from the Landlord and Tenant Act 1985, section 11)

So how can you tell which is which?  Here are the five main differences:

1. A lodger lives in the landlords home and shares living accommodation.

So if the occupier lives in the granny flat and only shares a hallway, he will be a tenant.

2. The landlord must live in the property throughout the time the lodger is there.

Therefore:

• if you own a house where you rent out rooms and live elsewhere, but then decided to move in yourself when one of the rooms become vacant, this does not turn your tenants into lodgers.  They will carry on being tenants, even though you, their landlord, are now living in the property.  (Although people who move in afterwards may be lodgers)
• Likewise, if you move out while the lodger is still there, then the lodger will become a tenant. This is only if you move out permanently, its all right to go on holiday for a few weeks.

3. The lodger must not have ‘exclusive occupation’.

This means, basically, that you must not let him put a lock on the door of his room (or indeed any other room) and keep you out.  You must maintain the right to go in the room from time to time, although respecting your lodgers privacy at all times.

If your lodger has a lock on his door and you do not have a key, and you have not entered the room without his permission for several months or years, then he may well have a tenancy.

These three are the most important differences. However there are two other signs that someone does not have a tenancy:

4. If the landlord provides services

This is not absolutely essential, and not all lodger landlords do this.  However if certain services are provided, then the occupier cannot in law have a tenancy.  The normal services which can be provided are any of the following:

• providing clean towels and sheets
• room cleaning (ie the lodgers room)
• meals, generally this is just breakfast but sometimes evening meals are provided also

This is why you do not have a tenancy of your hotel room when you go on holiday.

I would *strongly advise* that all lodger landlords at the very least, provide clean sheets, and use this as a reason to enter the room at least once a fortnight.

5. The landlord can move the lodger to a different room in the property

This is the least reliable of the five signs, and signed agreements may be negatived by actual conduct.

For example, if your lodger has in fact stayed in the same room for 20 years, has had a Yale lock on it for the past 15 years, and you never go in there, the fact that he may have signed a piece of paper when he first moved in saying that you have the right to move him to another room will probably not mean much.  He is almost certainly be a tenant (unless  you provide meals).

On the other hand, if he moves to the back bedroom when your Auntie Maud comes to stay (because she prefers the front bedroom), this would be a strong indication that he is a lodger and not a tenant.

I hope this post has made things clearer.  Or do you still have worries?  Please leave a comment if so.

Note that you can read a lot more about landlords and lodgers in my 21 days of tips for Lodger Landlords.  If it is clear that you have a tenant rather than a lodger, then my Landlord Law web-site service should help.

Are you worried about your lodger?  Do you need some advice?

Although our 21 days of tips series will answer most people’s questions, there are always those tricky situations where you need some professional help  If you have a difficult problem and need to know what your legal rights are, you may want to consider using my new advice service.

This is how it works :

• First – read the terms and conditions
• Second – set out your problem in the online instruction form (which you will find linked from the advice page)
• Third – pay the fee (you can either pay by paypal or send a cheque) – you will be re-directed to the payment page once you have submitted the instruction form
• Fourth – send any documents I will need to see (eg lodger agreement, letters etc)
• Fifth – receive your advice by email

The fixed fee for this is £75.  This may sound a lot if you are on a low income, but it is less than my fee on my Landlord Law site, so it will be limited *just* to lodger related problems.  Otherwise it is unfair on my Landlord Law members.

Hopefully your lodger will be wonderful and you will never need the advice service.  However if you do, it is here for you.

Getting permission for a lodger
Before you start clearing out the spare room and buying furniture (day 6), you need to be sure that you are legally entitled to let it out to your lodger, and have any necessary permission. Otherwise you could be in trouble. These are the main points to consider:

Tenants
If you rent a property under a short let, such as an assured shorthold tenancy, your tenancy agreement will almost certainly forbid taking in a lodger. You will therefore need to get your landlords permission. Although if you explain to him that you need the extra money to pay his rent, he will probably agree! You should get him to give you a letter confirming that you have permission to rent a room to a lodger, just in case there are problems later. Keep it safe.

Social housing
If you rent from a housing association or local authority, you shouldn’t have any problem. However, there is no harm in having a word with one of the housing officers and asking for written confirmation. Keep it safe. If you are told you don’t need written permission, keep a note of the name of the person you spoke to and the date.

Owner occupiers
Normally, if you are an owner occupier, you should be all right. However if you have a long lease or a mortgage, these will almost certainly forbid any subletting, so you need to make sure that no tenancy is created.  (This will also be the case with private and social short lets also). We discussed on Day 1 how a tenancy can be prevented.

The two other things that perhaps could be mentioned here are planning permission and the building regulations:

• Planning permission will probably only be needed if you are thinking of renting out rooms as a business, (although watch out for possible changes in the law relating to planning permission for HMOs).  NB If you do need planning permission here is a useful planning site.
• Building regulations will only apply if you are thinking of having building work done, perhaps to create a new bedroom or bathroom.  You will find some information about building regulations here.

Note that insurance is dealt with on Day 3.

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What is your experience of the things in this section? Have you had problems getting permission to take in a lodger? Were you able to overcome these? Has anyone had any problems with planning?

What is a lodger? “Thats a silly question” you will probably say, “Everyone knows what a lodger is!”. Someone who lodges. Indeed the free online dictionary defines it as ‘One that lodges, especially one who rents and lives in a furnished room’. So that clear. Or is it?

As a lawyer (and I should say here that any law in this series is only relevant for England and Wales UK), when advising someone, I need to know what their legal rights and obligations are. And when this is about someone renting accommodation, this will depend on whether they have a tenancy or a license.

A tenancy. It will probably surprise many people to learn that a tenancy is a type of ownership of land. If you have a tenancy of somewhere. you legally ‘own it’ for a slice of time – for the duration of the tenancy. There are lots of qualifications to this, but essentially that is what a tenancy is – a type of ownership of land. “Land” in this context can include a flat, or a room, including a room in the landlords house or flat. Furnished or not.

If you are renting a room out for £50 per week, you won’t want your lodger to have a tenancy, with all the legal rights and obligations which go with this. You will want them to have a license.

A license. This is where someone has permission to occupy property (in this case a room) and is therefore not a trespasser. Licensees have far fewer rights than tenants.

So how can you prevent someone from getting a tenancy? And how can you best protect your position as a lodger landlord?

Prevent ‘exclusive occupation’
One of the main features of a tenancy is that the tenant has ‘exclusive occupation’ and is able to keep anyone out of the property, even the landlord. Therefore, if it is a condition of your agreement with your lodger that you have the right to come into the room from time to time, it cannot be a tenancy.

It is important that you do this. Your lodger must *not* be allowed to keep you out of the room (although you should always respect his privacy). He should not be allowed to put a lock on the door, or if he does, you must have a key. If he objects to this, tell him that it is your home and you need to be able to enter the room from time to time to check its condition.

Provide services
Another good way of preventing a tenancy from arising is to provide services (this is why you do not get a tenancy of your hotel room when you are on holiday). The most common service provided by lodger landlords is clean sheets and towels. This is good for the lodger, as he does not have to buy his own, and it is good for you as it gives you a reason to go into the room. Other services often provided by lodger landlords are room cleaning and meals, especially breakfast.

Share living accommodation
You should, if possible, share at least some living accommodation with your lodger. The reason for this is that it will mean that the letting will come into one of the exceptions in the Protection from Eviction Act 1977. This means that if you ever need to evict your lodger, you won’t have to get a court order first (this is discussed more on day 20).

However this does not have to be the whole house. If you want to have a private sitting room and the lodgers room has its own en suite bathroom, just make sure that he is allowed to use the kitchen, and the dining room if you have one. Halls and corridors don’t count.

Mind you, if you want the accommodation to be completely self contained and don’t want to provide services, there is nothing wrong with this so long as you accept that it will almost certainly be a tenancy. Indeed you may be entitled, because of this, to charge a higher rent. However it is important that you realise and understand the situation, so you will know how to deal with things if there are problems. For information about tenancies with resident landlords, you need to see my Landlord Law site.

Your own home
Finally, I should make it clear that the property must be your main home, where you live for most of the time. If you move out (permanently that is, going on holiday is all right) your lodger could obtain a tenancy.

Summary
So we now know what a lodger is. For the purposes of this series (and also this web-site), a lodger is someone who rents a room in his landlords home. He will share at least part of the rest of the house or flat with his landlord, and his landlord will generally provide at least some services (such as clean sheets).

(Note that for convenience sake, I will describe the lodger as ‘him’. I realise that not all lodgers are male, but it makes writing a lot easier, and to be continually saying his/her is a very cumbersome way to write. Please take it that references to male lodgers include female lodgers also).

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What is your experience of the things discussed in this section? Have any of your lodgers tried to claim they had a tenancy? Do you provide services to your lodger? Has your lodger tried to lock you out of his room?