Student House Lodgers – 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?
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.
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