Definitive answer on live-in landlord status?

by Readers Question

8:32 AM, 5th March 2020
About a month ago

Definitive answer on live-in landlord status?

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Definitive answer on live-in landlord status?

I’m just wondering whether you can tell me definitively from a legal point of view: I have lodgers in my house and the fourth bedroom is mine. I have been offered a summer job abroad which could see me going away up until mid December.

Does this affect my live-in landlord status? I don’t want to accidentally create a tenancy. My room will remain empty, all my possessions here and I pay all the bills. The council, Welsh landlord registry, HMRC and my solicitor think it’s fine, I just wanted to triple check as I read something about a six month rule, and my solicitor wanted me to check with an expert.

I’m a freelancer and have to take what work I can get…

Thank you

CP



Comments

Ivor Bailey

8:55 AM, 5th March 2020
About a month ago

Hi
This is not a definitive answer but I think you need to be very careful.
A few years back I had a friend come stay with me for a couple of months as he was in difficult circumstances.
My lawyer advised me to create a tenancy for him to protect myself in the event he would not leave when required.
I’m not sure what lodgers are exactly in law and their rights but seek proper legal advice from somebody who is an expert in this field.

Smartermind

9:41 AM, 5th March 2020
About a month ago

The fact that your solicitor wants you to check with an "expert" speaks volumes about your solicitor!

Not a definitive answer and I am no expert, but if your lodgers do not have a tenancy agreement and no legal right to access your room then that would protect your rights as resident landlord. Put a lock on your bedroom to prevent the lodgers from squatting in your room. Many years ago we had a lodger and we had to temporarily relocate due to contract work and the lodger attempted to take over our bedroom! Fortunately my brother-in-law was staying in the house as well and was able to alert us and we managed to remove the lodger from our room.

Frederick Morrow-Ahmed

10:25 AM, 5th March 2020
About a month ago

First of all, you say that you have lodgers in your house and the fourth bedroom is yours. If this implies that you have more than two lodgers then in many councils’ jurisdictions you will have created a licensable HMO. I would suggest you check your own council’s licensing rules.

To the separate topic of whether your lodgers are lodgers or tenants that is a complicated issue. Strictly speaking, if your lodgers have no exclusive rights to their rooms, ie no keys to their rooms, and they share all facilities with you such as kitchen and bathroom then they are lodgers. This is irrespective of what kind of agreement you have with them. The courts will look at the actual facts on the ground.

As to what happens when you go temporarily abroad for work but leaving all your belongings in your house, I would hazard a guess that you are still considered a resident landlord assuming that this is your only or main residence. This would be particularly true if you were to periodically visit, say on weekends (if your work was across the channel in continental Europe).

However, this may impact on your non-residence status for tax purposes and I am wondering if this is the six month rule you are worried about (180+ days out of the country, etc).

This is my understanding of the situation, so not definitive legal advice!

Whiteskifreak Surrey

10:26 AM, 5th March 2020
About a month ago

Not exactly a reply you are looking for, but haven't you created am HMO? Looks like you have at least 3 separate households in your house, and that qualifies as HMO, I think.
1 lodger with live-in LL is definitely fine and you qualify for a rent-a-room allowance, but more - I am not sure .
Just a thought.

Catherine

11:26 AM, 5th March 2020
About a month ago

Hi all and thanks for the comments! First of all I’ve checked and we're def not an HMO. I’ve also checked tax residency status and that’s not affected. My solicitor is not a property law specialist so he suggested I get a second opinion to put my mind at rest

Frederick Morrow-Ahmed

12:04 PM, 5th March 2020
About a month ago

Reply to the comment left by Whiteskifreak Surrey at 05/03/2020 - 10:26
a) 1 lodger with live-in LL is definitely fine and you qualify for a rent-a-room allowance. Agreed. Also no CGT
b) 2 lodgers with live-in LL also not HMO and you qualify for a rent-a-room allowance that can be set off against rent. But now face CGT
c) 3 lodgers with live-in LL could fall into HMO depending on council. I think there is a choice, rent-a-room allowance can be set off against rent or submit income expenditure account as for normal lettings. Face CGT

JB

12:19 PM, 5th March 2020
About a month ago

Reply to the comment left by Catherine at 05/03/2020 - 11:26
Hi Catherine
Who did you check your HMO status with? I am pretty sure you do have an HMO and should therefore comply with HMO Fire Regs. Its a can of worms.

Catherine

12:22 PM, 5th March 2020
About a month ago

Reply to the comment left by JB at 05/03/2020 - 12:19
Council

Frederick Morrow-Ahmed

12:32 PM, 5th March 2020
About a month ago

Reply to the comment left by JB at 05/03/2020 - 12:19
5 or more is mandatory licensing
3-4 is additional licensing if council has it in place and their definition. So if council does not have additional licensing or their definition is 4 then OP is right if she only has 3

Mike

12:39 PM, 5th March 2020
About a month ago

@OP, If any of the 3 lodgers are related in some way, they will be classed as one or two households, two of them may be cousins, or all three of them may be related to one another, so they would be classed as one household, even if they live in two or three seperate rooms, hence it will not be an HMO; which is based on number seperate family units or households, you can also draw up a contract (tenancy agreement ) with a head lodger, who in turn sublets to two others and gives you the rent for the other two, so the other two lodgers pay the third head lodger, who can then if necessary evict any of the the other two by giving them a short notice in your absence.

I have this arrangement in my HMO, I have a head tenant and two others who are his lodgers, I get their rent paid to me through the main head tenant, I do not take any rent directly from the other two, they must first pay the head tenant, I refuse to take any cash from the other two directly just to keep on the right side of the law. In my agreement I have allowed my head tenant to take on up to two lodgers one in each room. Whether this is legal or not from Courts point of view, but this arrangement has been accepted by my council as they recently asked me to furbish information of all tenants in my property. They accepted it and have OK'd it, as I provided them with only one tenancy agreement of the head tenant, and no agreements for the other two.

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