The pandemic has resulted in many people working from home, and it looks like this will remain when the pandemic is over.
But are tenants breaking the terms of their tenancy agreement by working from home?
Short answer – it is probably OK but it depends!
Let’s take a look at this in a bit more detail.
The different types of tenancy or lease
There are different types of tenancies or leases and different laws apply to them. For example:
- Residential tenancies
- Commercial tenancies
- Agricultural tenancies
This article is about people living a rented accommodation as their home, who will normally have an assured shorthold tenancy. This is a residential tenancy and is governed by the terms of the Housing Act 1988.
However if someone uses a residential property for business use, this can sometimes affect the tenancy and turn it into a business tenancy – which would cause your landlord big problems and could have planning issues. Your landlord won’t want this, which is why most tenancy agreements will prohibit carrying on business activities at the property.
In reality, though, this is very rare and in most cases working from home will be fine.
What are the problems?
The problems that your landlord will want to avoid are:
- Damage being done to the property, and/or increased wear and tear
- The tenancy turning into a business tenancy (as discussed above), and
- Problems with the neighbours
Your tenancy agreement will usually set out some rules about the use of the property – it may say for example that the property can only be used as a private residence or as your ‘only or principal home’. Often it will specifically forbid any business use.
This will affect what you can do without getting your landlord’s approval.
Different kinds of ‘working from home’
For example, consider the following:
- Earning money from a hobby or interest
- Working from home for your job
- Running a home business
Earning money from a hobby or interest
If this is just ‘pocket money’ and your main income is something else – then this should not affect your tenancy (although it may affect your tax or benefit entitlement).
So long as the problems listed above are avoided you should be fine. For example
- It’s OK to sell a few hand-embroidered handkerchiefs via eBay.
- However, it would not be acceptable to set up noisy machinery to do the embroidery in the spare room and have people constantly coming to the property to buy your stuff, deliver materials and collect completed items for sale in shops.
The first example is fine and the tenant won’t even need to tell the landlord about it. The second will almost certainly be a serious breach of the tenancy agreement terms and may entitle the landlord to obtain an injunction or eviction order.
Working from home for your job
Here, again, it will depend on what you are doing.
Traditionally people have often worked from home – for example, teachers marking pupils homework – and this has not affected their tenancy. But whether your homeworking is permissible will really depend on what that work is and whether it causes any of the problems listed above.
In most cases, you will be working indoors and your work will be computer-based. Which should be fine. Depending on what your tenancy agreement says it may not even be necessary to tell your landlord first.
Running a home business
This is where, rather than doing work for your employer from home, you are actually running your own business from the premises. Which is different.
In the past, we always used to advise landlords to forbid this because of the danger that the tenancy could become a business one.
However, this all changed in October 2015 when the Small Business, Enterprise and Employment Act 2015 came into force. Sections 35 and 36 of the act introduced a new concept of a ‘home business tenancy’.
This allows landlords to permit residential tenants to run a ‘home business’ without the tenancy falling within the protection of Part 2 of the Landlord and Tenant Act 1954 (so long as tenants are not permitted to run any other kind of business from home).
A ‘home business’ is one which might reasonably be carried out at home, for example, an internet business, a financial consultancy, or an advertising, copywriting or translation service.
However, even if your business comes within the ‘home business’ definition – you still need to get your landlord’s permission first as virtually all tenancy agreements will prohibit running a business from the property.
From the Landlords Point of View
If your tenants ask for permission to work from home – should you grant this?
In most cases, the answer should be ‘yes’. If they are working for their employer from their living room via computer for say, three days per week, this is something that you should normally permit. Indeed, depending on the terms of your tenancy agreement, it may not need your permission.
You should only say ‘no’ if the work is seriously affecting the wear and tear on the property or will cause a nuisance to neighbours, or could cause planning issues. For example, you will not want garage hands bringing cars back to work on in the front garden!
A plus point where tenants are working from home is that it will give them less excuse to refuse to allow access to you or your tradesman for property inspections and any work which needs to be done at the property.
However, if your tenants actually want to start their own business which will be run from home – you need to be a lot more careful.
We discuss the issues in this post here which also discusses the special Landlord Law form you can use if permission is granted.