Differences Between a Tenant and a Permitted OccupierWritten By PropertyLoop July 12, 2021
Those new to the rental industry may be forgiven for adopting the train of thought that an occupant of a rental property, as they are residing under the same roof as a tenant, may enjoy the same rights, and be subject to the same scrutiny as a traditional tenant; however this is not the case.
What Is a Permitted Occupier?
Simply put, a permitted occupier is a party that, whilst not considered to be a tenant, is able to reside within the rental property. Whilst this could sound like a way in which residents of the rental property may be able to more simply enjoy the benefits of renting a property, perhaps making the process far simpler there is a major caveat that cannot be overlooked. When living in a rental property, any parties considered to be a permitted occupier will not possess any of the legal rights that would protect a traditional tenant. Somewhat similarly to subletting, the tenant of the rental property that is named on the original tenancy agreement will be responsible for the permitted occupier. But, whilst the permitted occupier may be left somewhat exposed in regards to their legal rights as a renter, they will not be obliged to pay any sums of due rent to the landlord.
Who Can Be a Permitted Occupier?
Although anyone is able to be a permitted occupier in a rental property, there are typical examples that can be seen across the industry. Perhaps the most common forms of a permitted occupier would be children, minors or those that are otherwise dependant on a guardian as they will not be of an appropriate age to proceed with a legally binding contract such as a tenancy agreement. Further to this partners of the tenants and those that they care for can also be considered to be permitted occupiers as they will spend a considerable amount of time within the rental property.
Despite not being considered to be a tenant it is imperative that any party residing within the rental property is able to produce sufficient evidence of their right to rent. Similarly as if the landlord were to be letting out their rental property to a tenant any provided official documents that would verify the identification of the occupier must have their validity and authenticity scrutinised. Simply because the party will not be considered a tenant is not sufficient justification for the right to rent checks to be neglected. In the circumstance that a tenant, lodger or occupant of the rental property is unable to produce any proof of their right to rent, the owner of the rental property is still able to turn to the government’s “landlord’s checking service” as a final port of call to see if these parties hold an applicable status to rent within the UK.
As can be expected, if the landlord or the owner of the rental property fails to check their occupant’s right to rent then they can face incredibly detrimental repercussions. If it is found that the owner of the rental property knowingly let to a party that does not hold the appropriate right to rent status then this will be treated as a criminal act under sections 33a and 33b of the immigration act 2016; leaving the landlord to face up to five years in jail alongside an unlimited fine. However, if the landlord has neglected to uphold their duty to conduct these checks for multiple tenants then the penalties will be far worse, with a £3,000 charge for each tenant that does not possess the right to rent within the UK and a referral notice being issued to the landlord.
The Rights of a Permitted Occupier
As mentioned above, because the permitted occupants of the rental property are not bound by the responsibilities that come with a tenancy agreement, they therefore are not empowered by the document to enjoy the rights many renters hold. Whilst a bespoke clause can be entered into the tenancy agreement by the landlord at the request of the tenant, this will simply recognise that he occupant is living within the property and does not entitle them to the same rights as a renter.
This could be unfortunate for the tenant as in most regards; the book will stop with them. The responsibility at adhere to their legal obligation to make regular rental payments, maintain the condition of the property and behave in a tenant like manner do not apply to the permitted occupant and they can therefore not be held accountable for the above issues.
What Happens If the Tenant Leaves?
If the tenant has managed to obtain the landlord’s permission to open the doors to the rental to a permitted occupier, if the original tenant’s tenancy agreement comes to an end, they are evicted from the rental or they abandon the property, then unfortunately the permitted occupier must also vacate the rental property. This is because a tenancy agreement is not held with this party and therefore there is no legally binding lease agreement between the owner of the property and its sole remaining occupant, potential landing the owner in hot water legally.
With this being said, if the permitted occupier proves to be reluctant in vacating the rental property then as they are the responsibility of the tenant, the tenant will still be liable to make rental payment to the landlord as the property has not be properly vacated. Further to this, in this instance it is essential that the landlord keeps in mind that the permitted occupier is not a tenant and therefore cannot be asked to make any rental payments. If the owner of the rental property collects any rental payments from the occupier, if the situation escalated to court, the occupier could argue that in doing so the landlord granted them a tenancy and they are therefore entitled to the full protectionary measures and rights a traditional tenant is entitled to.
If the original tenant that introduced the permitted occupier to the property vacates the rental tis will be an undesirable situation for all concerned parties. Not only does the landlord now have to chase the tenant for the rental payments they are due, but it goes without saying that most renters will not be fond of the idea of paying rent for a property they do not live in. With this mind, if the landlord has included a bespoke term in the tenancy agreement that not only permits their tenants to take in permitted occupiers, but allow for them to become a tenant once the original resident leaves, the owner of the property is able to forge a new agreement with the occupant, making them responsible for future rental payments and securing the landlord’s income.
However, although a traditional tenant is legally obligated to provide the landlord with appropriate notice before leaving the rental property, typically around 60 days, a permitted occupier that is residing within the rental is under no requirement to do so and is able to vacate the rental at any point without offering notice.
Permitted Occupiers in a HMO
Another reason as to which a landlord should include a clause regarding permitted occupiers in their rental property within their tenancy agreement is to prevent them being subject to the regulations applied to a house in multiple occupation or HMO. If the landlord is unaware of how many occupants are current residing within their property this can be easily done, and it is safe to say that the tenants will not be aware of their liberal approach to occupancies causing a breach of these rules. A rental property will be considered to be a house in multiple occupation providing that the residence contains at least three people living across a minimum of two or more households within the dwelling. Further to this the occupants or tenants of the rental property that is a HMO will be sharing facilities such as communal arrears, kitchens and bathrooms. In some instances the owner of the rental property will also be required to obtain a license for their HMO, with this being said the landlord will be required to obtain a HMO license if the property has 5 or more residents that all share common facilities.
Referencing a Permitted Occupier
Unlike a traditional tenant, a permitted occupier does not have to be subject to the scrutiny of the tenant referencing process before moving into a rental property. This is largely because the permitted occupier will not be liable to make any commitment towards due rental payments and therefore will not have their financial wellbeing assessed. Naturally, as the permitted occupier will be residing within the rental property, the landlord may well have an apprehension about not having any of the typical knowledge they possess before a party moves into their rental. This is not to say that the landlord or owner of the rental property cannot first meet with the aspiring occupant, perhaps even gaining a reference from a previous landlord if they are able, as whilst they will not pay rent, the permitted occupant will still have to respect the condition of the property and contribute to its upkeep in a similar vein to the tenant.
How Does This Affect the Tenancy Agreement?
As can be expected, if a tenant were to request that a permitted occupier were to be added to the tenancy agreement prior to the tenancy agreement being drafted and signed by both parties then this amendment would have minimal influence on proceedings. However if the request for the addition of a permitted occupier comes after the original tenancy agreement has been signed, the binding document will need to be amended to include the details of this additional party.
To the delight of many renters, the implementation of the tenant fees act in 2019 granted them protection from landlord fees that are unjustly thrust onto them. However, whilst the landlord is unable to charge their tenants excessive or unreasonable letting fees, and rightly so, they are able to pass on the costs associated with amending the tenancy agreement to their tenants.
Permitted Occupant or Lodger?
Perhaps the most immediate and striking difference between a lodger and a permitted occupier is their obligation to pay rent. Under the government’s rent a room scheme the owner of a property is entitled to open the doors of their home to a lodger and accept regular rental payments. The rent a room scheme permits the owners of the property to be in receipt of a rental income, with an allowance of £7,500 being awarded to them before any tax must be paid on the amounts they receive from the lodger in rent. With this being said, in the circumstance that a tenant wishes to take in a lodger they must first check the terms of their tenancy agreement. In most cases the tenancy agreement will stipulate that the tenant must first gain the explicit permission of the landlord before inviting a lodger into the property, however it is not uncommon for the practice to be outright prohibited.
PropertyLoop is the world’s first commission free lettings platform. Our platform allows landlords to advertise their rental, reference tenants, curate an agreement, register the deposit and collect rent completely for free! There are no hidden charges, upfront fees or any catches.
Built by experienced property investors and landlords, PropertyLoop connects renters with the owners directly. Your property is featured on all major search and comparison portals as well as advertised by PropertyLoop everywhere else on the Internet. You don’t have to worry about finding the good renters, that’s the job for the platform. Receive offers straight to your mailbox and select the renters that are right for your property. Need access to busy London property market? No problem at all! PropertyLoop is the London market specialist with years of experience and unique knowledge. Whatever your needs are, you can always speak to friendly support staff. Renting property is made as simple as one, two, three.