A couple of years ago I rented out a four bedroom house in Shepherds Bush to four young professionals – Aussies and Kiwis, who seem to favour that part of London.
They were excellent tenants in most ways – easy going, paid the rent on time, looked after the place well, notified me of any major problems but didn’t call me when a lightbulb needed changing. The house had a second small reception room, which previous tenants had used as an office and which I had furnished with a desk and bookshelf.
The first time I visited the house, a few weeks after they had moved in, I noticed that the desk and bookshelf had been removed and that there was a mattress and bedding on the floor. Judging by the clothes and other items lying around, someone was clearly sleeping over. When I commented on this, the tenants explained that they had a guest from Australia who was staying for the week. That didn’t cause me a problem – it was their home and of course they were entitled to have guests.
My suspicions that this might be a little more than a temporary guest were aroused when on two subsequent visits, several months later, I noticed that the mattress was still there. A small portable clothes rail now stood in the corner and some pictures had also been put up on the wall. The number of personal items scattered around the floor had grown.
Although I had no way of proving it, this “guest” seemed to be more of a permanent lodger, a sub-tenant even, no doubt in possession of a set of keys and contributing financially in some way to the rent and other expenses. He or she was not named on the tenancy, I had taken no references from them and I did not even know their name.
Many landlords will have experienced this situation. And many tenants will have taken on a long-term “guest” to help out with expenses. It raises the following questions:
1. What rights, if any, does the lodger/paying guest have?
2. Should the landlord turn a blind eye, or insist that the lodger either leave or sign a tenancy agreement?
As any lawyer will tell you, this is a complicated area of the law. Not least, it depends on the circumstances.
One thing is clear: the guest can not acquire legal rights as a tenant unless the landlord treats him as such (eg by accepting rent payments from him direct). A Section 8 or Section 11 Notice served on the tenants (for non payment of rent, for example) would cover their guest too, even if that guest is paying rent to the tenants. The tenants and their guest would have to leave. No worries for landlords there then.
So should a landlord just turn a blind eye? Well, in most circumstances that may well be the best option. But there may be situations where that could leave the landlord exposed to potential legal liability.
For instance, in certain circumstances having an extra occupant may mean that the property falls within the definition of an HMO (house in multiple occupation). Under the Housing Act 2004, properties of three of more storeys with five or more occupants may be classed as HMO’s and require licensing. The landlord is responsible for this and their are severe penalties for failure to comply.
And what if council tax is included in the rent? If a property is let to a single person and that tenant decides to move their partner in, the single person’s discount will no longer apply. If the landlord is paying the council tax, he/she is then obliged to notify the local authority, who will remove the 25% discount. The landlord will want to pass this on to the tenant in additional rent, to which they may object. It would be better to sign a new tenancy at the higher rent with both tenants included.
Similar issues can arise if the landlord is accepting housing benefit. Additional occupants will affect eligibility and the local authority must be notified.
Even if there are no additional obligations, it may still be advantageous to both parties to regularise the arrangement by drawing up a new tenancy agreement. From the landlord’s point of view, the guest would then become jointly and severally liable for payment of rent. A new agreement has advantages for the tenants, too, of course – since they can all then enforce their rights against the landlord if, for example, he fails to maintain the property.
To summarise:
1. A guest or lodger will not acquire rights of tenure unless the landlord treats them as a tenant by accepting rent from them.
2. If the rent is being paid, the best option for landlords may be to turn a blind eye until the tenancy comes to an end. If the guest is still there and the tenants wish to stay, a new tenancy can be drawn up at that stage incorporating all occupants.
3. BUT landlords should watch out for the situations above, in which long-term guests could result in additional legal requirements, for which the landlord may be responsible.
