The Tenancy Agreement vs. the Lodger Agreement

How to Assess Lodger Rights and Tenancy Agreements

Sep 3, 2009 Carol Finch

With more people taking lodgers into their homes, many need to know whether they should set up a tenancy agreement or whether a lodger agreement will be enough.

It's becoming more common for UK homeowners and tenants to let out space in their homes to lodgers. Many will currently do so to take advantage of the Rent A Room scheme. This scheme, which is endorsed by the government, allows an individual to earn up to £4,250 a year tax free by taking a lodger into their home.

One of the greatest considerations to be made before opening up a home to a lodger is whether a formal tenancy agreement or contract is needed. People are used to having these kinds of agreements in place to protect them when they rent flats and houses. They may not, however, be strictly necessary when taking in a lodger as they have fewer rights than tenants. A lodger agreement may, therefore, be a better solution to take.

What Rights do Lodgers Have?

Compared to tenants lodgers have fewer rights. This is, however, based on the access that a lodger may be given in a home. Most lodgers, for example, will share certain facilities such as the kitchen and the bathroom with their landlord. This may make them an "excluded occupier." If they have all their own facilities, they move into more of a tenancy status.

A lodger with excluded occupier status has few rights compared to a tenant. So, for example, if their landlord decides that it is time for them to move on then they simply need to give them reasonable notice to leave. This can even simply be given verbally. People that qualify for a tenancy agreement, however, could force their landlord to take out a court order to evict them if things got difficult.

Why Lodger Agreements are Still an Option

A landlord doesn't have to draw up a formal agreement with a lodger if they don't want to. Many will take a lodger in with no written agreement at all and may simply talk them through any house rules that they have. It is, however, becoming increasingly common for landlords to offer their lodgers a more formal lodger agreement.

This document may simply outline what the landlord expects from the lodger and what he/she is offering. It can also be used to give notice periods if the landlord wishes this to be set out on a more formal basis. Putting a lodger agreement in place will not cost a huge amount of money but it comes with a few advantages for both parties. These include:

Both the lodger and the landlord will be very clear on where they stand.
The landlord can set out house rules/expectations for the lodger before he/she moves in.
The lodger will know what is expected of them and what they will get from their landlord in terms of access and facilities.
Both parties will have a notice period to protect them if something goes wrong.

Although a lodger agreement isn't necessary it can be a useful way of laying down ground rules, rights and expectations.

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