A lodger is someone who rents a room in her/his landlord’s home and who shares living space with her/him. Some lodgers receive services, such as meals or cleaning, as part of their agreement. Only certain people are allowed to take in lodgers. If you want to do so, you’ll need to work out how both you and your lodger’s rights are affected.
Bear in mind that a lodger’s landlord could be the owner of the property, or someone who rents the property from the owner.
What is the difference between a lodger and a subtenant?
A lodger rents a room in the landlord’s home. S/he may receive some services from the landlord, such as meals, laundry or cleaning.
A subtenant has exclusive use of at least one room (usually a bedroom) in the property. Even the landlord would need her/his permission to enter this area. The subtenant may have permission to put a lock on her/his door.
In reality, there is often little difference between the rights you have if you share facilities with the landlord.
Who can take in a lodger?
Homeowners can usually take in lodgers. Most mortgage agreements allow you to rent out a room in your home, but you generally need permission from your lender. Check your mortgage agreement to see what it says.
Most tenants can only take in a lodger if they:
- rent a whole house or flat
- have a spare room
- get permission from their landlord before a lodger moves in.
Many council tenants and some housing-association tenants are automatically allowed to take in a lodger but most other tenants are not. Check the tenancy agreement to see what it says. If it doesn’t say anything at all, you probably do need permission, and if you break your agreement your landlord could try to evict you.
Will taking in a lodger affect my entitlement to benefits?
Yes. Taking in a lodger will probably affect the amount of benefits you get if you’re claiming. You will need to tell the Council’s housing benefit office and your local benefit office that you have taken in a lodger and how much rent you are receiving. This will be the case even if your lodger is living rent-free. If you simply don’t tell them, you may end up having to repay an overpayment, or be prosecuted for fraud.
If you’re receiving housing benefit and you take in a lodger, the first £20 per week of rent that you receive from the lodger will not be counted as income when your entitlement is being calculated. If you also provide some meals to your lodger only half of any rent they pay each week above £20 will be counted as income. For example, if your lodger pays £50 per week for their room and some meals, £35 will not be treated as your income when the amount of housing benefit you are entitled to is being worked out. Your income from the lodger will be treated as being £15 per week.
If you just rent the room to your lodger and do not provide any meals, only the first £20 per week that you receive in rent will be disregarded. Anything above £20 will be treated as income. So, if the rent is £50 per week, £30 will be treated as income when the Council work out how much housing benefit you are entitled to.
Other welfare benefits
If you are receiving a means-tested benefit like income support (IS) and job seekers’ allowance (JSA), the first £20 each week that you receive in rent will not be counted as income. If you also provide some meals to your lodger, only half of what they pay you each week over £20 will be counted as income.
If you don’t provide meals, then all of the rent that you receive over £20 will be classed as income when the amount of benefit you are entitled to is being calculated.
If you are receiving universal credit, the rent that you get from your lodger is not counted at all as income. You will still need to tell the local benefits office that you have taken in a lodger.
You will be responsible for the council tax. If you were previously living alone and were eligible for the 25% single person’s discount you will no longer be entitled to that once you have a lodger. You may able to claim to council tax reduction. You should contact your local council for more information.
Other things to consider before getting a lodger
Renting out a room may also affect your contents insurance. Most insurers will put up premiums, but it’s still important to inform them if you want to be sure that your belongings are protected. If you don’t tell them, the insurance may not be valid.
Responsibilities as a landlord
As a landlord, you will have to ensure that you have an up to date gas safety certificate if you have gas appliances.
What tenancy status do lodgers have?
If a lodger shares facilities such as the kitchen and bathroom with the landlord, s/he will be an excluded occupier. Excluded occupiers have very few rights. The landlord will only have to give reasonable notice, which could be a very short amount of time, in order to evict them.
If you don’t share facilities, the person renting a room is probably a subtenant rather than a lodger. This means that the landlord may need a court order to evict her/him.
Should there be a written agreement?
It is a good idea to have a written agreement which clearly sets out the arrangements between you and the lodger for paying the rent and any deposit, the house rules and how the agreement can be ended. Both you and the lodger should sign the agreement and keep a copy each. Setting out the rights and responsibilities of landlord and lodger in writing from the start can help to avoid misunderstandings or disputes further on down the line.
Where can I find a lodger?
Some areas have lodging schemes which can help to match prospective lodgers to people with rooms available to rent. Your local council may be able to give you information about anything operating in your area. Some councils have accommodation websites where landlords can advertise rooms to rent free of charge. The Housing Department of your local council is a good starting point to find out what is available in your area.
If you live near a university, they may have a lodging scheme for students and may be able to advertise your room.
Put the word out to friends and family that you have a room to rent – they may know someone who is looking for a place live. Some people feel more comfortable renting a room out to someone they know, even if just through a friend, family member or acquaintance.
You can advertise your room in shop windows, on local notice boards or put an advert in the newspaper.
Choosing a suitable lodger
Remember, if you take in a lodger you will have to be prepared to share at least part of your home with them. Even if they have their own bedroom, you are likely to be sharing the kitchen and bathroom. Think carefully whether you are willing to do that before you commit to renting a room out.
When you meet a prospective lodger, think about whether they will fit in with your household. You can ask them for references from previous landlords and could do a credit check.
If you have children at home, you may want to ask your lodger for a police check, but there is a fee payable.
What happens if the landlord’s tenancy ends?
A lodger or subtenant can continue to live in the accommodation as long as the immediate landlord has the right to stay there (i.e. as long as her/his tenancy continues, or as long as s/he owns the property).
However if her/his tenancy ends, or the property is being repossessed by a mortgage lender, the lodger’s rights depend on:
- what type of tenancy the landlord has
- what the landlord’s tenancy agreement says about subletting
- whether the head landlord agreed to the lodger or subtenant living there.
If the head landlord accepts rent directly from the lodger or subtenant, the lodger or subtenant may well have more rights. By accepting rent the landlord may be admitting that the person has a right to live in the accommodation. This is a complicated area of law so get advice if you are in this situation.