14:03 PM, 30th September 2019, About 3 years ago 11
My tenant in a very popular area of the city occupies a Victorian terraced house with three double bedrooms and two receptions. She is self employed and has been there for over three years living with her two children.
The house is under utilised as it is easily big enough to accommodate four adults which is my preferred model of tenancy. She is a good tenant and always pays the rent on time, keeps the house and garden in tip top state and even does actual repairs and improvements in her own time and expense, as she sees it as her home.
This sounds ideal except for one problem.
My managing agent originally signed her up for quite a low rent, at that time it was about £300pm below market and now stands at about £600pm below market due to Bristol rents skyrocketing and a lack of available places to rent, and also the agent’s neglect in asking her for regular rent increases.
I have told her via my agent the rent will be going up more than 12% in a few months time and she responded in writing asking me to consider a lower increase as this would be unaffordable to her, children at a local school, part of the community etc. I’m very sympathetic to her situation and don’t want to make her and children seek a new home and would be happy to keep her, but unfortunately I really need the extra rent to pay my own bills.
My idea would be for her to stay and continue paying the same rent, but to give up one the receptions and rent out that room to a lodger.
That could probably bring in £500 to £600pm which she would transfer to me. The question is how to structure the arrangement as a lodger could leave any time and I would want her to have flexibility to get another one when needed. Also they would not be equally sharing the rent as the lodger would be paying proportionally more for his/her one bedroom, though sharing the kitchen, bathroom and other reception etc. I wouldn’t really want the lodger to know the amount of rent my tenant pays as this could lead to issues.
Can I have an AST with my tenant and a separate AST with the lodger, who now also becomes my tenant? Or should I keep my tenant with the existing AST and the lodger has a signed agreement with my tenant just to sublet a room?
Or is there a better way?
All suggestions appreciated.
A house in multiple occupation (HMO) is a property rented out by at least 3 people who are not from 1 ‘household’ (for example a family) but share facilities like the bathroom and kitchen. It’s sometimes called a ‘house share’.
If you want to rent out your property as a house in multiple occupation in England or Wales you must contact your council to check if you need a licence.
You must have a licence if you’re renting out a large HMO in England or Wales. Your property is defined as a large HMO if all of the following apply:
Even if your property is smaller and rented to fewer people, you may still need a licence depending on the area. Check with your council.
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