I recently met a tenant who told me he was having a difficult time with his landlord who had made him sign a document titled ‘Lodger Agreement’. As the conversation progressed, I quickly realised that the tenant was exactly that – a ‘tenant’ and despite what this piece of paper had said, he was NOT a ‘lodger’. Landlords buying documents from WH Smiths hoping they can circumnavigate the law is a dangerous pastime.
What is a lodger?
‘Lodger’ is not a legal term. In legal language, if someone rents a property he will be either a ‘tenant’ or a ‘licensee’. There is a big difference between the two. Tenancies (where the tenant in effect owns the property for a period of time) carry with them a number of important legal rights and obligations which, if they are not written into a tenancy agreement, will be implied into it by law. However, this is not the case with a licence. A licence is simply permission to occupy property so that the person occupying is not a trespasser.
The legal status of a person’s occupation will normally depend on what actually happens. So if someone occupies a whole house or flat ( with the landlord living elsewhere) and pays rent for it, this will normally be a tenancy and the fact that the occupier has signed an agreement saying it is a licence agreement will not change this. If you are renting out a room in your house, you will not want to create a tenancy, so you would make sure that the person you are renting to only has a licence.
Important elements
When considering taking in lodgers, landlords need to ask themselves the following 5 questions:
1. Are you letting a room (or two) in your own home?
2. Will you make it clear to the person paying you rent that you have the right to enter the rented room from time to time (while respecting their privacy)?
3. Will you ensure the rented room never has a lock or anything fitted that would prevent you from accessing the room?
4. Will the person paying you rent share some living space with you? – This will generally be one or more of the kitchen, bathroom or living room.
5. Will you provide some services for the person paying you rent? E.g. clean sheets, clean towels, cleaning services or meals.
If you can answer Yes to all 5 questions, the person paying you rent will be a ‘lodger’ otherwise they will be a ‘tenant’ and that is a whole different ball-game with different legal and tax implications.
Have you got people in your property you thought were lodgers? Are you aware of the legal rights and obligations you have to lodgers and tenants and the difference between them?
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