FAQ - LandlordZONE - The five questions posted most recently:

Is there any limit to the number of rooms I can rent out to lodgers, and are there any planning implications ?

Wed, 01 Jul 2009 08:39:00 GMT

There are several parts of legislation in England and Wales that affect this question. Perhaps four main ones apply: Health & Safety (HHSRS), HMO, Overcrowding and Planning Rules.

HMO

The Housing Act 2004 schedule 14(6) states that the maximum number of lodgers living in a property, before it is classed as an HMO is two.

So, if three or more lodgers live in a property, in addition to the landlord and his or her family, the property will be defined as an HMO.

To decide whether the property is a licensable HMO it must be classed as a Prescribed HMO meeting these conditions:

1� The HMO or any part thereof comprises three stories or more

2� It is occupied by five or more persons

3� It is occupied by persons from two or more households.

Overcrowding

If accommodation is much too small for a household it may be considered to be overcrowded under the law. A home may be legally overcrowded if there are not enough rooms or space for the number of people who live there.

Currently (2009) there are two applicable standards in force: the Statutory Overcrowding standard under the Housing Act 1985 and the Crowding and Space Hazard, assessed under the Housing Health and Safety Rating System (HHSRS).

Statutory Overcrowding (Housing Act 1985)

Overcrowding can be caused by too many people living in a room or too many poeple for the size of the room.

If two people of the opposite sex have to sleep in the same room, the accommodation will be overcrowded unless the two people are:

- a married or cohabiting couple, or
- at least one occupant is under ten years old.

The number of people of the same sex (unless they are a same sex couple) who can sleep in one room is restricted by the size of the room.

Rooms that are counted include living rooms, bedrooms and large kitchens. Space and floor area calculations:

- children under one year old are ignored
- children under ten years old and over one count as a half
- rooms under 50 square feet are ignored.

As a general rule:

1 room = 2 people
2 rooms = 3 people
3 rooms = 5 people
4 rooms = 7.5 people
5 or more rooms = 2 people per room.

Also, the floor area of a room determines how many people can sleep in it:

- floor area 110 sq feet (10.2 sq metres approx) = 2 people
- floor area 90 - 109 sq ft (8.4 - 10.2 sq m approx) = 1.5 people
- floor area 70 - 89 sq ft (6.5 - 8.4 sq m approx) = 1 person
- floor area 50 - 69 sq ft (4.6 - 6.5 sq m approx) = 0.5 people.

Crowding and Space Hazard (HHSRS)

The HHSRS is a new tool for local authorities to tackle overcrowding.

HHSRS assesses deficiencies in a home in terms of the impact on the occupiers. Local authorities use the system to risk assess properties for 29 health and safety hazards, one of which is crowding and space.

�a dwelling with one bedroom is suitable for up to two people regardless of age; two bedrooms for up to four people; three for up to six people; and four for up to seven people. Living rooms and kitchens are also considered. Whether a dwelling is actually overcrowded depends on the age and circumstances of the family in it.�

A dwelling may not match the ideal, but unless the hazard is a high-scoring Category I, the authority�s decision to act is discretionary.

Planning

In some cases, especially where an HMO is being created, the property may be subject to Planning and Building Control rules, especially in respect of fire regulations.(The Regulatory Reform (Fire Safety) Order, June 2005, Effective 1 October 2006)

HMO also have specific management rules (Statutory Instrument 2006 No. 372 The Management of Houses in Multiple Occupation (England) Regulations 2006) and are subject to annual Fire Risk Assessments. If in any doubt and before you commence any work or lettings you should contact your local authority planning and evironmental health departments and/or fire officer.

�LandlordZONE All Rights Reserved - never rely totally on these standard answers which apply primarily to England & Wales. Before taking action or not, always do your own research and/or seek professional advice with the full facts of the case and all documents to hand.

I have heard that an action against joint tenants is limited to the first four listed on the tenancy agreement. Is this correct - does not seem to square with joint and several liability?

Wed, 17 Jun 2009 11:24:00 GMT

Section 34 of the Trustee Act 1925 says the maximum number of people who can have a legal interest in land is 4.

Therefore, when more than 4 are named, the first four hold the legal interest on trust for themselves and others in equity.

So if there are 6 Students say, who are named as tenants under the tenancy agreement, only the first four are bound by legally enforceable covenants, e.g., to pay rent etc, so as far as the Landlord is concerned, only the first four can be sued for any breach of those covenants.

The fifth and sixth students would have legal liability between themselves and the first four named tenants.

The landlord would have to sue either one or all of the first 4 named tenants and then they would bring in the other 2 tenants. �

If the bottom two were the ones failing to pay the rent, the landlord would sue the first four and they would then bring in the other two.

If the two failing payers are actually part of the first four, then they could be sued outright but the other two of the four would be jointly and severally liable in any case!

Therefore, only the first four occupiers can be tenants.

One answer for landlords is to make, by way of a supplemental agreement or as part of the main agreement, the additional occupiers jointly and severally liable for the other�s (the 4 tenant�s) obligations, even though they are not tenants.

Alternatively, where a house is let to, for example, 7 occupants � 4 on one level of the house could be on one joint tenancy, with the other three on a different level of the house on a separate joint tenancy.

The implications for using the s21 possession procedure are that the additional (permitted occupiers, as would be the case with children) cannot be served notices themselves, but their occupation rights would end if the main 4 tenants rights end.

I am a joint tenant with my friend who is leaving at the end of our 6-month fixed-term. I would like to stay on for a few months because I have another friend coming to stay with me, but my landlord is refusing, saying I must leave at the end of the term or sign a new 6 month agreement and pay the full rent. What rights do I have?

Fri, 12 Jun 2009 21:01:00 GMT

Your landlord is correct.

When one tenant involved in a joint tenancy leaves, effectively that tenancy is at an end. In no way can it continue as a periodic tenancy, as would be the case if both joint tenants where still in occupation after the fixed term ends.

Therefore, you have no right to stay on beyond the fixed term.� If you stay you will be a tresspasser. The landlord could apply to the court for a possession order and have you evicted.

You could stay on if the landlord agrees to a new tenancy, either with you as a sole tenant paying all the rent, or as a joint tenant with someone else.

However, should you offer or pay rent at the end of the fixed term, and should the landlord accept the rent, either by accident or by design, then a new AST will be created, albeit without a written agreement.

What is more, this will be a new AST on a perodic basis from the start, giving you a new minimum 6-month term, if you want to stay that long.

My daughter is off to university and we have bought her a student house, which she and her friends will share. Can her friends be classed as lodgers even though she pays rent to us?

Wed, 10 Jun 2009 11:43:00 GMT

For a lodger situation to exist in law, the landlord must live on the premises (main residence) and share facilities with the other occupants. Also, the agreement (licence) must make it clear that the occupants do not have exclusive possession of their own rooms - the landlord has access for cleaning etc.

There are some strong advantages to having the occupants as lodgers (as opposed to tenancies which give additional rights) since, if your daughter's friends don't get on, it is much easier to ask someone to leave by giving a reasonable amount of notice (30 days, say) - no need to go through s21 possession procedures.

Also, being lodgers, the occupants are not affected by the Assured Shorthold Tenancy statutory rules and therefore no need to comply with the Tenancy Deposit Scheme - the landlord (your daughter in this case) can hold the deposits.

But, your daughter is your tenant, not the landlord, so how can you do this?

One option is to have your daughter as a tenant on an AST, paying rent to you the landlord - with no deposit. Your mortgage provider may well specify an AST agreement. The agreement should include a clause which allows your daughter as the sole tenant to sub-let. That way, as an tenant and underlandlord, she can sub-let to lodgers using lodger agreements (licences)

If, for example, you decide to exempt your daughter, as your tenant, from paying rent, you could also avoid the AST regulations on the low rent exemption. This would mean that her tenancy is not an AST but a common law tenancy, giving you more flexibility and also exempting you from the Tenancy Deposit Scheme.

Not all students would be happy to be put in this position, as your daughter would be, giving them this responsibility, but it does have some advantages.

Re-selling Energy - As a landlord am I able to make a profit by re-selling electricity or gas?

Wed, 22 Apr 2009 11:13:00 GMT

Resale of Gas and Electricity

The maximum amount that Residential Landlords or �resellers� are permitted to charge for gas or electricity is the amount they have paid for it, plus VAT at the appropriate rate; this is termed the Maximum Resale Price or MRP. Any standing charges can be recovered by the Landlord by dividing it on a pro-rata basis according to usage between all the tenants.

In other words, residential landlords cannot add additional charges to these utilities.

Factsheets on the current rules for MRP can be downloaded from the links below.

However, these MRP provisions do not apply to gas or electricity resold by Commercial Landlords for use in commercial premises.

In these circumstances, it is likely that the cost of energy use is set as a bilateral agreement between the landlord and tenant.

This agreement would should be incorporated into the lease.

The issue therefore becomes a contractual matter between the contracting parties.

Where a consumer establishes a breach of contractual obligations, or questions the validity of the terms and conditions of a contract, he/she is advised to seek independent legal advice.

Last updated: 26/01/09

Guidance for Resellers

Guidance for Landlords who re-sell fuel