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 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.
i have my own living area but i also use the lounge dinning area that i provide for my lodgers.
is this alright regarding eviction procedures.not that i need to but you never know.
Most people never need to use the eviction procedure! It is best if you share several rooms, for example kitchen and bathroom as well. Note that halls and passageways don’t count. If a case ever went to court (which is most unlikley in reality) it would probably depend on the degree of use and genuine sharing of accommodation.
If i followed your five tips would it allow me to take a lodger into my detatched granny annex the local authority put the standard condition the annex shall only be used as ancillary accommodation incidentalto the enjoyment of the existing dwelling and shall not at any time be occupied as seperate residential accommodation or sold on as such i hope so as i could do with the money
I don’t think this would be a good idea. The legislation talks about being part of a building, so if the annex is separate you may not be deemed to be a resident landlord. From what you say, it would also get you into trouble with the Council.
We own a lease hold flat which has a section, we could potentially let out.
Having read your very informative article I now know that we need to prevent our let from being a Tenancy, and that as it is within our home, yet self contained, we need to do as much as we can to form a ‘Lodger’ let.
As it is a leasehold flat do we legally have to inform the Freeholder that we are getting a ‘Lodger’?
Can a leaseholder in fact legally rent out there entire property, or is this a form of subletting? Can the freeholders stop you?
You may do. You really need to take a look at the terms of your lease as they are not all the same.
It is more likely that you would need to inform the freeholders if you were subletting to a tenant. Again this would be set out in the lease. If you breached the term of the lease, technically they could forfeit your lease and you would lose it. So it is best to make sure that you are acting correctly before you do anything.
PS I have sent the lodger agreement you bought by email, check your spam if you have not seen it.
Hi, hope I’m not too late to ask questions about this! And that I’m in the right part of your site..
We own our home, so no mortgage lenders etc. We plan to move to Britanny in the summer, leaving one daughter and partner with the downstairs of the house, initially rent-free for a set period of time but paying bills, and another daughter with a room upstairs while she’s a student, rent-free but paying bills. We also want to rent a room to her friend, also a student.
What’s the situation regarding family members as landlords if the property owners aren’t living there? And how far could we get away with physically separating upstairs and downstairs?
Thanks
The occupiers (ie your family) can rent out a room with themselves as landlord.
hello I have a seperate annex in the grounds of my house,the tenant does to have exclusive access as they need to use my gate where we shar a key and I regularly access the annex to collect rubbish and need to check the electric box which runs to our house too.The tenant is saying we should put their deposit in a scheme and I could be fined 3x the amount though when they came I put them on a NON ASSURED Tenancy ( resident landlord agreement) Am i correct that thois excludes a deposit scheme.Thanks
If it is a completely separate building then he is probably right. It will be an AST and you should protect the deposit. You will find a lot of information about this on my main Landlord Law site: http://www.landlordlaw.co.uk/home-page
many thanks for the reply is this the case even though I enter the annex to collect rubbish and check the electric box.I do not want to rent on an AST so cant I use a common law agreement
If it is a tenancy and you do not live in the same building it will almost certainly be an AST. You can’t really prevent this. Using a common law tenancy agreement won’t make any difference. Any more than sticking a label on your son’s head saying ‘I am a girl’ will turn him into a girl.
I don’t give help on tenancies on this blog which is just for lodger situations – you need to go to my Landlord Law site for that http://www.landlordlaw.co.uk/home-page
Hello,
I am looking at buying a property with an annex linked detatched to the main house(but has its own entrance). I would like to rent the annex out to a lodger but am mindful that I have two young children so would want to put a lock between the main house and the annex. I was also going to give the lodger their own garden. Would they still be classed a lodger with the lock in place if I provided at least two of the listed services for them?
It sounds to me as if it is a tenancy rather than a lodger situation. You would need to speak to your mortgage company to see how they would feel about your renting out the annex.
Please can you tell me the rules on renting out an annex which is part of the main house ie a granny annex linked by a door through the conservatory. The annex is an extension and has the condition about it only being used ancillary to the house. The annex has its own kitchen/bathroom/living room/bedroom. If I keep this door but put perhaps a bookcase across the door is this ok? Does this planning condition apply to what I want to do? I would never want to sell the annex as would need the income.
@Grant I am afraid I do not do planning law and cannot answer questions on planning matters. Sorry! It is a completely separate area of law.
Hi
I am buying a three storey house and the lowest storey is a self contained flat with own access by side gate and no internal access to the house. It has its own council tax banding. If I rented this out would I have to create a tenancy agreement and if so what type? and are there any websites that I can get further advice on dealing with the accounts for this. My mortgage has said I can either holiday let or short term let the flat
@gina you can find out all about renting property as a tenancy on my Landlord Law site here: http://www.landlordlaw.co.uk/home-page. Note that you will be a resident landlord so it will not be an AST. The site has suitable tenancy agreements you can use.