Lodger Agreement (Landlord Advice)

A lodger is someone who rents a furnished room in a landlord’s main home and shares use of certain common parts of the property such as the kitchen, bathroom and living room.

A written lodger agreement, also known as a resident landlord agreement, should be drawn up to set out the agreed contractual arrangements between the lodger and landlord, such as how much rent is payable, the notice period to end the agreement and the rules on use of the shared facilities, noise and guests.

The landlord will want to protect their position because they are inviting the lodger to share their home with them. The landlord will also want to know their rights if they want the lodger to leave.

What is lodging?

In order to take in a lodger, you must be living in a furnished house or flat. If the flat is a leasehold property or you are the tenant of the property, then you must check the terms of your own lease to see if you are allowed to have a lodger.

If your home is mortgaged then you should check the terms of the mortgage to see if you have to ask for the bank’s permission to have a lodger.

You should also be aware that you may only have a maximum of two lodgers living with you. If you have more than two, then you may be classed as an HMO (House in Multiple Occupation). HMOs are heavily regulated and you would need to check that you were complying with the requirements of your local authority. If you failed to comply with the regulations, you could be fined.

Finally, you are legally obliged to carry out a right to rent check on your prospective lodger. This means checking their immigration status. Usually, asking to see the lodger’s passport will be enough to satisfy this requirement.

Lodger or tenant?

The difference between a lodger and a tenant is in the rights they have to use the property and the rights the landlord has to evict them.

A lodger can be given notice to leave at any time if that is what it says in their contract, and if they refuse to leave then they will count in law as a trespasser and the landlord can change the locks.

A tenant will have ‘exclusive possession’ of a property, which means that they have the right to live in the property on their own and if the landlord wishes to visit the property they must make an appointment more than twenty-four hours in advance.

Tenants also have the right to a certain amount of notice if the landlord wishes them to move out, and the Landlord will have to go to court for a possession order if the tenant does not leave.

What should a lodger agreement include?

Terms you may wish to consider including are:

  • How much rent is payable and whether it is payable weekly or monthly.
  • whether the rent is to be paid in cash, in which case you should undertake to provide a receipt to the lodger, or whether the rent should be payable by standing order and if so when.
  • Whether the lodger will make a separate contribution towards utilities or it will be included in the rent.
  • Length of the agreement – this could be six or twelve months, in which case it is a fixed-term agreement. If you do not state the length of the agreement then it will be classed in law as periodic, i.e. it simply runs from one rental payment period to the next. This latter arrangement is open-ended and can work well if both sides understand that neither of them is making a firm commitment.
  • Notice period – state the number of weeks’ notice required to be given by each of you to terminate the agreement.
  • Deposit – this can be one week’s or one month’s worth of rent. It is a good idea to take a deposit from the lodger as the return of the deposit will act as an incentive from the lodger to leave the room in good condition
  • If you have a cleaner, will the cleaner also clean the lodger’s room and if so whether the lodger will make a contribution to the cost.
  • Whether pets are allowed.
  • Restrictions on noise, either at all or between certain hours.
  • An obligation on the lodger not to cause a nuisance.
  • An obligation on the lodger and you, the landlord, to keep the shared areas of the property clean and tidy.
  • An obligation on the lodger to seek the landlord’s consent before redecorating the room;
    whether the lodger is allowed to invite guests to stay in their room, and if so an obligation on the lodger to make sure their guest(s) observe the provisions of this agreement.
  • Reference to an inventory attached to the lodger agreement, which is a list of the items of furniture in the lodger’s room and the shared areas, including the condition of the furniture.
  • A statement that it is the lodger’s responsibility to insure their own belongings.
  • Not to keep any mobile gas heaters or oil-burning appliances at the property.
  • Circumstances in which you can automatically terminate the agreement without notice, for example unpaid rent for two months.

Common areas of legal risk when taking in a lodger

Terminating the agreement

The biggest risk for a landlord in renting out a room in their home to a lodger is that the lodger might refuse to leave their accommodation even if the landlord has given lawful notice. The rights of the landlord in this situation depend on the type of tenancy the lodger has in law.

There are two possibilities.

1. If the lodger lives in your home and shares facilities (kitchen/bathroom) with you (or a member of your family) then the lodger will be an ‘excluded occupier’, either an excluded tenant or an excluded licensee. This means that you only have to give them reasonable notice to leave and you do not have to go to court to evict them. You do not have to give the lodger a reason for asking them to leave, just the appropriate amount of notice.

In this case, reasonable notice means either the length of notice stated in the lodger agreement or the length of the rental payment period. Therefore, if the lodger pays weekly then strictly speaking you only need to give one week’s notice. If they pay monthly, then you must give one month’s notice.

Accordingly, once you have given the lodger notice to leave, you have the right to change the locks once the notice period has expired. Even if the lodger has not moved out and their belongings are still in the room, you can change the locks. You must, however, return their belongings to them if they return to pick them up.

2. If the lodger lives in your home, but it has been modified in such a way that you do not share any facilities, then they will be classed in law as an occupier with basic protection. This means that if your lodger does not leave at the expiry of the notice period, you will need to obtain an order from the court to evict them. This can be costly, time-consuming and extremely stressful for all concerned.

The court will make a possession order in your favour, as long as you followed the correct process. Once you have the possession order, you can apply for court bailiffs to evict the lodger.

Deposits

As stated above, it is recommended to take a deposit from a lodger as it will hopefully encourage them to leave their room and your house in the condition it was in when they moved in.

You should note that unlike with tenancy agreements, there is no obligation on a landlord to place a deposit from a lodger in one of the prescribed deposit holding services. You should still place the deposit in a separate account as a matter of good practice.

You should manage the expectations of the lodger regarding the return of their deposit by including an inventory with the agreement and explaining that you will check all items against the inventory when the lodger moves out. You should also let the lodger know when they move in if they are allowed to knock pins in the wall or stick things to the wall, as it would be unfair to charge a lodger for doing this if you had not made clear your house rules from the outset.

Finally, you should include in the agreement a time limit by which you undertake to return the deposit (minus deductions where appropriate) after the lodger has moved out.

Working from home

Especially at the moment, with so many offices and workplaces closed, your lodger may be working from home.

Generally, lodgers (and tenants) would be expressly prohibited from operating a profession, trade or business from their property, for insurance reasons, and because it is often prohibited under the terms of a mortgage.

However, running a business from your home is different from the lodger working from home due to their office being temporarily closed. In this scenario, the lodger would not be seeking to use your address as a registered office address or trading address, so you should be able to allow it.

Lodger agreement FAQs

Do lodgers have contracts?

It is advisable for you and your lodger to have a written contract, so that both sides understand what is expected of each other in terms of payment, noise, visitors etc.

However, if there is not a written contract in place, there can still be a verbal or implied contract whereby the lodger agrees to rent the room for a price per week or month, and the landlord agrees to let them stay in the room in return for receiving the money.

In this case the landlord has the right to ask the lodger to leave upon giving either one week or one month’s notice, depending on how frequently the lodger pays the rent.

Do I have to pay council tax for a lodger?

You do not have to pay extra council tax if you have a lodger staying with you in your house; you simply pay your council tax bill as normal.

It is the landlord’s responsibility to pay the council tax bill, although the landlord can of course choose to price in council tax when setting the rent to be paid by the lodger. Your lodger should not be named on the council tax bill as they are neither the homeowner, nor a tenant.

How do you get rid of a lodger?

If you have a written agreement with a lodger and you share your home with the lodger then you can give them notice in accordance with that agreement.

If a lodger refuses to move out at the end of their notice period then in law they are trespassing and you have the right to carry out a peaceable eviction by changing the locks. You should, however, retain the belongings of the lodger and return the belongings to the lodger if they come back for them.

It is a criminal offence to use violence or threatening behaviour to evict a lodger. If you do not share any facilities with your lodger then they will likely have basic protection in law and you will have to obtain a possession order from the court in order to evict them if they do not leave at the end of their notice period.

Legal disclaimer

The matters contained in this article are intended to be for general information purposes only. This article does not constitute legal advice, nor is it a complete or authoritative statement of the law, and should not be treated as such. Whilst every effort is made to ensure that the information is correct, no warranty, express or implied, is given as to its accuracy and no liability is accepted for any error or omission. Before acting on any of the information contained herein, expert legal advice should be sought.

Lodger Agreement (Landlord Advice) 2
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Lawble is a leading legal resource aimed at supporting people and businesses alike by providing reliable information, legal resources and links to leading and reputable legal service providers.

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