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Guide to taking in a Lodger

By stu007
March 25, 2017 in DWP References /Guidelines

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Guide to taking in a Lodger

What is a Lodger?

A Lodger is a person who rents a room in your home without having exclusive rights to any part of the property. Usually there is a formal arrangement in place that sets out the rooms that the Lodger can use and those that they share with the rest of the household (e.g. the kitchen, living room and bathroom) for an agreed payment.

Close family members such as a parent, step parent or parent-in-law, a son or daughter, step son or step daughter, a son-in-law or daughter-in-law, a brother or sister are not normally classified as Lodgers so you need to be fully aware of this.

Do I need Permission to take in a Lodger?

As a Private Home Owner

--You may need to inform your Mortgage Provider.

--You may need to inform your Insurance Provider.

--You may need to inform the Local Council (Council Tax).

--You may need to inform DWP if you Claim any Benefits.

As a Council Housing / Housing Association / Housing Trust etc Tenant (Social Housing)

--You may need to Request Permission from your Landlord to have a Lodger.

--You may need to inform your Insurance Provider.

--You may need to inform the Local Council (Council Tax).

--You may need to inform DWP if you Claim any Benefits.

We would recommend that you always get Permission in Writing from the Landlord.

Do I need to provide a Furnished Room?

To comply with the Governments Rent a Room scheme to earn a tax free income you must provide a Furnished Room.

How much can I charge a Lodger for a Room?

This will depend on the area where you live and what condition your property is in. Have a look on www.SpareRoom.co.uk at other rooms available in your area to get an idea what the going rate is likely to be.

How do I Evict a Lodger?

It is easier to evict a Lodger than a Tenant but you will still need to give ‘reasonable notice’ to the Lodger if you intend to evict. We would always recommend a written agreement between you and your Lodger(s) so the conditions are agreed upon in advance.

Will I be Taxed on my Income and do I have to Declare it?

Under the Government’s Rent a Room scheme you can earn up to £7,500 a year tax free by taking in a lodger and, provided you don’t earn more than this, you won’t need to declare it. Important if you do earn over the amount you must inform your Local Tax Office ASAP.

Do I need to Comply with the New tenancy Deposit Laws?

The law only applies to Assured Shorthold Tenancy (AST) so you can take a deposit without having to use the tenancy deposit scheme. (Ensure you have a Lodger Agreement signed by Lodger and Yourself)

Do I need to Comply with Right to Rent Laws?

As of 1st February 2016, the law requires everyone renting out property in England to check whether their tenants are legally allowed to live in the UK, regardless of the type of agreement, whether they're written or verbal. (this includes Lodgers so you need to be aware of this)

Right to rent checks introduced for landlords in England

Right to rent document checks: a user guide

A short guide on right to rent

Right to rent checks: what they mean for you

Check your tenant's right to rent

The PDF below contains the above information but also:

1. Lodger Agreement

2. Lodger Interview Form

3. Inventory List

4. Example Notice to Quit letter.

Guide to Taking in a Lodger.pdf

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