Most tenancy agreements forbid this, and so if you are a tenant you will need to get your landlords permission first. In most cases your landlord will be only too happy to say yes, if it means he will get his rent paid promptly and on time.

However remember that if the property is an HMO he may have no alternative but to say no, if the lodger would bring the number of occupants of the property above the number permitted in his license.

The landlord may also want to exercise some control over who the tenant is, to make sure that no-one unsuitable is living in his property. Practically there is not much he can do if you take in a lodger who is not to his liking – other than serve a section 21 notice on you and require you to vacate! So it is probably best to co-operate with him.

However YOU will be the person having a share a house or flat with the lodger, so you should be the person who has the last word on the matter.

There are lots of ways of finding a lodger – postcards in shop windows are a very traditional way, but many people are now using the internet with sites such as www.spareroom.co.uk and www.mondaytofriday.com. However it is important that you take great care in your choice as the lodger will have access to all your personal possessions – so you need to be sure that he is trustworthy.

Often people taking in lodgers tend to skimp referencing and credit checks, but they are arguable more important for a lodger in your own home than they are for landlords taking in tenants. So make sure you do this – my Your Law Store site has a new lodger pack which will help here. It also has a lodger agreement which you can use – another essential which lodger landlords often ignore.

Taking in a lodger can be good personally as well as financially. Sometimes lodgers stay a long time and can become an important part of the household. However it is best not to be too friendly at first. The relationship is after all a business one, and if you get too pally some people may take advantage of this.

There is a whole lot more about lodgers on my special website Lodger Landlord so if you decide to take in a lodger this is a good place to find out more.

1. Please introduce yourself. Say a bit about yourself and your company

Hi, I’m Rupert Hunt and I’m the founder of SpareRoom.co.uk, the UK’s leading flatshare site with over 1.5 million registered users – our aim is to make finding your ideal flatshare, flatmate or lodger as easy and secure as possible.

2. How did you first become involved in property?

My background is in music but, while I was at university, I took a short course in web design and got hooked. After moving to London in 1997 I quickly realised that finding shared accommodation using local papers and cards in shop windows was really tricky and that there had to be a better way of doing it using the internet.

As an experiment I set up www.intoLondon.com and it quickly became busy – as a result I was able to quit my day job and set up SpareRoom.co.uk in 2004 as the national version of intoLondon. We now have offices in London and Cheshire (where I grew up) and a staff of around a dozen.

3. What do you think is your greatest achievement so far?

I’m tempted to say reaching to 1.5m registered users or getting to the point we’re at without any external funding but I think what I’m most proud of is our commitment to customer service and safety. We spend hundreds of hours every week talking to customers on the phone and by email and moderating ads to make sure no scams or spam spoil their experience. It’s not a single achievement but the accumulation of thousands of little everyday things that help us provide the best possible service we can.

4. Do you or your company have any exciting plans for the future?

We’re always looking at new ways of helping people find their new flatmate or room – that’s how we created Speed Flatmating, a new way of finding flatmates based on the people rather than the room. We have several new projects on the go, including our private rental site www.findaflat.com and a version of the site tailored to student lets – Student SpareRoom.

5. What do you think are the greatest problems facing the private rented sector today?

The private rented sector is a vital part of the UK’s housing market and will continue to be so if home ownership doesn’t become more affordable. I think there are two issues that need to be addressed to keep the sector strong and viable – the first is the need for clear, accessible information on HMOs to help landlords understand and comply with regulations as simply as possible.

The second is the urgent need to revise the Rent a Room Scheme threshold. The current limit of £4,250 was set by the last Conservative government in 1997 and wasn’t increased at all under the Labour government.

As a result the tax threshold, designed to encourage people to rent out their spare rooms and increase the supply of quality private rented accommodation, has been devalued to the point where over 60% of UK rooms have a rental value of more that the threshold (over 90% in London). This stops people from charging a fair market rate for their rooms and also has a knock on effect for landlords as they’re competing with underpriced rooms, falsely devaluing the market.

6. What do you think are the greatest opportunities?

I think that, in times of financial uncertainty and instability, renting properties by the room is a great way of increasing yield and minimising void periods. Renting by the room isn’t for everyone as it can be more work than renting out a whole property but it’s definitely worth investigating. Check out our Multiletters newsletter for more on letting multiple properties and renting by the room.

7. We have a new government. What would you like them to do for the private rented sector?

As mentioned above we’d like to see clear HMO regulation and local authority departments who understand it so landlords can get a simple answer to their questions rather than the confusion and uncertainty that prevails at the moment. Secondly we’d like to see the Rent a Room Scheme threshold raised to £9,000 to encourage people to take in lodgers. For more information, and to add your support for the campaign to that of Shelter, The National Landlords’ Association and Sarah Beeny, go to www.spareroom.co.uk/raisetheroof.

8. Do you use social media (blogs, twitter, LinkedIn etc)? What place do you think it has in the future of the property industry?

We do – Twitter is the one we use most often. For us it hasn’t particularly helped us attract new users but it’s allowed us to be involved in the conversations that go on and hear what users are saying about us, which is invaluable. What it’s been particularly great for is meeting new people involved in the property world. As an example we’ve developed a great working relationship with Sarah Beeny’s private sales and lettings site Tepilo.com, almost entirely through Twitter.

9. What is the most important lesson you have learned during your time in property?

However much we get hung up on property prices, rentals vs buying and mortgage availability, it’s vital to remember that every property (however it’s owned or paid for and whoever you share it with) is a home. Property is great but people are more important.

10. What advice would you have to someone thinking of entering the property industry today?

In terms of investing we wouldn’t dream of offering anyone advice as we don’t consider ourselves experts. In any conversation about property, whoever it’s with, the other person will know something you don’t so my advice is to listen as much as you talk.

********

Many thanks for that Rupert, and well done with the Raise the Roof campaign.

I have received the following email from one of our readers:

My boyfriend and I moved into a 7 person flat share beginning of Nov 2008 where we were advised by the tenant moving out that there had not been a lease agreement with the Landlord via the letting agents for a while.  It had expired and the agents hadn’t renewed despite the tenant asking. Anyway they said it worked for them to not bother with a new lease as the turn over of tenants was fairly regular so they started a system that a new tenant coming in just paid the tenant leaving the bond.

I have been told by the agency who we rent the property through that due to a government law bought out in April 2007  regarding deposits they would be unable to transfer the names from tenants that were on the lease at the time to my name therefore leaving me in a position where I will not be able to get the deposit back should there be a situation where we need to leave and are not replacing out selves with another tenant.  Is there anything i can do about this?

This is not the first time I have been consulted in a case where ‘tenants’ move in and move out of a property without signing any form of tenancy agreement, often where the original tenants who signed the tenancy agreement have long gone.

Are they tenants or lodgers?

It raises a number of legal problems.  If the original tenants are still living in the property, the incoming occupiers probably have the status of lodgers.  However what is the situation when all the original tenants have left?  You can’t really have a house full of lodgers under a tenancy where the tenants are no longer there.

Here are two suggestions -

• the occupiers have an oral tenancy, or
• there has been some sort of implied assignment

I would favour the oral tenancy argument, perhaps on the basis that they have a tenancy of their own room and shared use of the common parts.  What do you think?

What about the deposit?

And what is the situation regarding the deposit?  If this was protected (and it may not have been) it would have been protected with one of the three tenancy deposit companies, under the names of the original tenants.  Is there any procedure whereby it can be paid out to the current occupiers?  The original tenants won’t be interested as they will have been repaid by the incoming occupiers.

My advice to both landlords and tenants, is never allow this sort of situation to develop. It is a lazy approach to letting which benefits neither party, and which can be very prejudicial to either.

This is day 3 of my 31 days of tips on tenancy agreements series. To see the rest of the series click here

Is your agreement a tenancy or a license?

Law is never straightforward. Just to make things a little bit more complicated, in law there is a difference between a license and a tenancy.

A tenancy:

This is where you actually own the land or property for a slice of time.  It is a different type of ownership from owning the freehold of the land, but it is nevertheless ownership.  This is why the landlord is not entitled to go into the rented property without the tenant’s permission.  He no longer owns it (in a sense).  He has given it away in exchange for the right to receive rent, retaining the right to recover the property once the tenancy has ended.

A license:

This is where the occupier is not a trespasser because he has permission to live in the property.

Creating a license:

Now reading this, you may think (if you are a landlord) “I think a license sounds much better, I will let all my properties on license in future”.  The trouble is, it does not work like that.

It was decided in the House of Lords in 1985, in a case called Street v. Mountford that if the occupier:

• Has exclusive possession of the property
• Pays rent (which does not have to be a market rent),
• For a term (a specified period of time, which can be ‘periodic’ ie from week to week or from month to month)

then the occupier will normally have a tenancy, and the fact that they have signed a piece of paper with ‘license agreement’ written at the top, will be irrelevant.

There are a number of signs by which you can recognise that someone does not have a tenancy:

If the parties ‘did not intend to create legal relations’. This will often be implied in family type situations where you allow a member of your family to stay and do not sign any form of legal agreement.

If the landlord provides ‘services’.  For example, cleaning, and meals.  This is one reason why people do not normally acquire a tenancy of a hotel room.  Provision of services also means that the occupier does not have ‘exclusive occupation’ as the landlord has the right to go in, for example to deliver the clean sheets, or do the cleaning.  I have written quite a lot about this on my Lodger Landlord web-site.

If the landlord has the right to move the occupier into another room. You need to be careful about this one though.  If the agreement says that the landlord has this right, but in reality it is clear that it is not something which is going to happen, a Judge in any court claim will probably say that it is a sham and that the occupier really has a tenancy.

(For more information see here for five tips on how to avoid a tenancy when renting out a granny annex.)

Licenses will also be created in the following situations:

• When an employee is required to live in the property as part of his employment
• Residential occupation of boats
• (Sometimes) where the occupier is living in property as a beneficiary under a charity (such as an almshouse)

Note that if you are letting a room to a lodger, you can purchase a lodger agreement from the documents shop on my Lodger Landlord site.

Do you have any comments on this section?  Have I left anything out?  Have you had any interesting cases which hinge on the difference between a license and a tenancy?  Do you think this distinction should be abolished?

Note that on my Landlord Law site, I have a >> Which Tenancy agreement ‘trail’ which will guide you by question and answer to find out which is the most appropriate type of agreement for your situation.

Tomorrow I will be looking at the different types of tenancy

NB Read about my tenancy agreements service here.

Day 15 – Should you use a lodger agreement?
This may seen unnecessary for an informal lodger situation but it is best to have one, just in case problems arise

Day 16 – Should you take deposits and use an inventory?
Deposits are useful protection if your lodger breaks something, and an inventory is essential for working out if any damage has been done, particularly over a long period

Day 17 – How much paperwork and record keeping is involved?
This post gives a useful list of all the paperwork involved in having a lodger

Day 18 – How should you behave towards your lodger?
Making friends with your lodger, privacy issues, and increasing the rent?

Day 19 – How should you deal with problem lodgers?
Sets out an action plan

Day 20 – How do you evict a lodger who won’t go?
Most people will never need this post

Day 21 – What should you do when your lodger leaves?
Dealing with the last day procedures

If you take in a lodger, I hope the series was helpful for you. If you have any questions or comments, please make these on the Lodger Landlord site.