What fees can you charge your lodger?
Although it sounds a bit odd as a lodger is not (normally) a tenant, the Tenant Fees Act 2019 applies to lodger landlords in England.
The Tenant Fees Act is mostly about fees and so we need to talk about the fees you are entitled to charge. The rule is that ALL charges are prohibited unless specifically allowed by the act. Rent, you will be happy to learn, is a permitted fee!
Most lodger agreements do not charge any fees apart from the rent, but just for the record here is a list of the things you can charge (apart from the rent and deposits discussed here):
- A fee for lost keys limited to £50 (inclusive of VAT) or the actual cost of replacement
- A fee limited to £50 (inclusive of VAT) for varying the agreement
- A charge for late payment of rent of 3% above base rate once the rent is in arrears of 14 days, payable from default until payment
- Council tax, and utilities
- Payment for a TV license
- Payments for communication services such as a landline telephone, broadband, satellite TV
- Green deal charges
Now, most of these are not charged separately in lodger agreements. as most things are rolled into the agreement although sometimes landlords will make a separate charge for utilities (which is OK).
If you want to make any other charges – such as for laundry or for meals, then for it to be allowable the lodger must be given a genuine choice as to whether to use the service or not.
However, this will invariably be the case – as your lodger will (for example) have the option to use a launderette instead or maybe wash their smalls in the sink. Or eat a takeaway in their room.
You will find government guidance on the rules in England here.
Although there is similar legislation in Wales, The Renting Homes (Fees Etc.)(Wales) Act 2019, this act appears to only apply to occupation contracts. So provided you ensure that your lodger arrangement falls within the exceptions (discussed here) there is no legal limit on the fees that you can charge.
There is government guidance on the rules in Wales here.
Enforcement and penalties
This is where lodger landlords score over ‘proper’ landlords – as failure to comply with the rules will prevent landlords from using the section 21 eviction process. But as most lodger landlords don’t need to get a court order – that won’t be a problem!
It is possible though that the Local Authority may seek to impose charges if they find out that you are charging illegal charges, and the lodgers (in England) will have the right to bring a claim at the First Tier Tribunal to claim it back.
Our Lodger Agreements
Our agreements (and the accompanying notes) have been amended to bring them into line with these rules. They now claim the correct interest rate for rent arrears and we have added a clause to allow you to make the claim for lost keys.
As always with our agreements, you can add any other clauses you want in the additional clauses box at the end.
You can see all our lodger forms here.
Readers Questions
Q: What is the situation with TV licenses. Will my lodger be covered by my TV licence?
A: You can see the terms and conditions for TV licenses here. They say that anyone living at the property will be covered apart from “areas occupied solely by tenants, lodgers or paying guests”.
However, if you go into your lodger’s room frequently, this may be sufficient to allow you to avoid this rule (as the room will not be ‘occupied solely’ by the lodger). If you explain this to your lodgers, it may also encourage them to be more cooperative about allowing you access!
Important note
This guide ONLY deals with lodger agreements where you are renting a room to a lodger in your own home.
If you require information about tenancies with resident landlords and Welsh occupation contracts, you need the Landlord Law site.
