Sharing Your Home With a Tenant

Sharing your home with a stranger (or tenant) may not be as onerous as it sounds. In fact, in some sectors, it’s actually encouraged ie a younger person helping out an older home owner with tasks, while the latter provides a room over their head. It’s also company for both – something that has more than proven its worth during recent strict lockdowns here in the UK. 

But, to get back to formal matters, taking in a tenant does have plenty of legal implications too. You will become, what is known as, a ‘live-in’ or resident landlord. And that means making sure there are certain standards to upkeep – both on your part and the tenant’s.  

What Does a Live in Landlord Mean?

A live-in landlord is someone who rents either a room or a portion of their property to another individual, while they (the landlord) continues to use the same property as their main residence. 

Rent out a room to more than one person and your property will become known as a Home of Multiple Occupation (HMO). In this case, you will need to apply to your local authority for an HMO licence. The latter involves many rules and regulations that you must adhere to, such as fire safety, minimum room sizes, a good bedroom to bathroom ratio etc. 

What Do I Need to Know When Renting Out a Room?

Will your tenant be paying for a room only, or for a room and shared use of your kitchen and general living facilities? If it’s the former they will have ‘exclusive occupation’ ie of their room. If it’s the latter they are referred to as an ‘excluded occupier.’ 

The ‘exclusive occupier’ ie the ‘room only’ tenant then they will have more legal rights than the tenant sharing your home. As you would with an Assured Shorthold Tenancy (AST) you will have to give them notice if you want to enter the room.  

They are also entitled to notice if you want to ‘take the room back.’ Another aspect to think about and make legal in writing via a Tenancy Agreement, is how long the duration of the tenancy should last for; six months to one year is usually typical. 

Utility Bills – Who is Responsible? 

Typically, you as the landlord, will settle all the utility bills as your tenant’s share will be included in the cost of the rent. Also, your name will be on all the bills, so in an administrative sense, it’s easier.  

And talking of bills, it’s always a good idea to reference check tenants using an agency or contacting their employer, asking for bank details etc, yourself. An alternative could be to install a meter in the tenant’s room. 

Rent a Room Scheme

You won’t be entitled to sole occupancy council tax exemption either if a tenant moves in, so it’s worth considering this too in terms of how much rent you will charge. What you will be entitled to though, is a tax exemption under the Rent a Room Scheme, provided you don’t earn more than £4,250 a year from renting out a room. If you earn more than this you will need to fill out a tax return, declaring your earnings. 

Mortgage Alteration 

You will, of course, have to let your mortgage lender know that you are now renting out a room. This will obviously affect any insurance you have too. 

Will Being a Live-in Landlord Suit You?

Certainly, not everyone can cope with a ‘stranger’ living in their home. It will restrict your personal space and you will be obliged to respect their privacy and needs too. It’s worth giving a long hard think about if you’re considering going down the route. Definitely don’t rush into it! 

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