Lodger Information Pack

Transcription

1 Lodger Information Pack This pack is designed to give you information if you are thinking about letting a spare bedroom out to a lodger. It provides: A series of questions and answers about things you need to think about and do before you let your spare room to a lodger. A lodger licence agreement which you can use to establish an agreement between yourself and your lodger. What is a Lodger? A lodger is a person who rents a room in someone else s home. Usually there is a formal arrangement in place that sets out the rooms a lodger can use and those they share with the rest of the household for an agreed payment. Close family members are not usually classified as lodgers. If the lodger only has use of a bedroom and is not permitted to share any living spaces such as living room, bathroom or kitchen, then they would not be classed as a lodger and the information contained in this booklet may not be applicable. Do I need permission to take in a lodger? As a tenant of a social landlord, you need to get written permission from Linc before you get a lodger. You will need to provide us with the name, age and sex of the intended lodger, together with confirmation of the rent which will be charged and which part of your home they will occupy and have use of. Things to think about when you consider taking in a lodger Before you ask for permission to have a lodger, you might want to think about whether you are prepared to have a lodger living in your home and whether it s right for you. Having a lodger live with you means you will be sharing your home with a stranger. If you live alone, this might mean company but it also means that you ll be giving up some of the privacy you enjoy at the moment. If you have children, you might want to consider whether you want a stranger living in your home, particularly if you do not know a great deal about their background. As a parent or guardian of a child or children, your first duty to them is to ensure they have somewhere safe to live. If you want to have a lodger living with you, providing you with another source of income, it is important that you choose who lives with you very carefully.

2 Your tenancy agreement states that you are responsible for any nuisance caused to your neighbours by anyone living in or visiting your home. This would include a lodger. Who should I inform that I m going to take in a lodger? If you are thinking of taking in a lodger, after you have received consent from Linc, you should contact your Home Contents Insurer and inform them that you intend to take in a lodger. They may obtain certain information from your potential lodger and they might need to adjust your premiums. If you do not inform them, you may later find out that the contents of your home are not covered. Once you have taken in a lodger, you also need to inform the following: Council Tax Dept - If you are a single person and get a single person discount on your Council Tax, you need to inform them if you take in a lodger. If your lodger is a student they will not be considered to be a full time occupant and you will not lose your single person discount. Department for Work and Pensions (DWP)- if you receive benefits you will need to let the DWP know that you have a lodger and the amount you are paid each week by your lodger. If you do not update the DWP, you will be committing benefit fraud. Housing Benefit- if you receive Housing and Council Tax Benefit you need to advise them that you have a lodger and the amount you are paid each week. What condition should my home be in? When you let your spare room to a lodger, your home should be clean, carpeted and in good decorative order throughout. The spare room should be bright and cheerful and spotlessly clean. If not, it is unlikely that someone will want to come and live in your home. You should take photographs of the room that the lodger will use before you let it to record its condition. What furniture should I provide? As you are going to be letting the room to a lodger on the basis it is furnished, you will need to ensure that you have the right furniture in the room. The furniture you provide will depend on the size of the room but you should provide the following: A comfortable bed and mattress. It is a good idea to fit a waterproof cover over the mattress A desk or table with a lamp and chair Shelves on the wall or a small bookcase A bedside table and lamp A wardrobe and chest of drawers All of the furniture you provide must comply with the Furniture and Furnishings Fire Safety Regulations If you re buying new furniture it won t be a problem, but if you are using old furniture, it s a good idea to check for labels to ensure it is compliant with the regulations (Labels can be found on items such as padded headboards, sofas, mattresses, pillows, cushions, cloth covers on seats, curtains.)

3 It is best to buy new electrical items and make sure you keep the receipts and instructions. If you do use old, you should get them tested by a qualified electrician but this could be expensive. You will need to provide a lodger with access to pots and pans, cups, plates and cutlery and you should make some space in your kitchen cupboards, fridge and freezer for their food. You should provide an inventory (a written record) of the items you provide your lodger and their condition. Should I establish house rules? It is important to set some rules about what you will and will not allow in your home, so you should give this some thought before letting your spare room out. For example, you might not want a lodger who smokes or has a pet. Whilst you don t want the list of rules to be too long, you should set out standards of cleanliness and tidiness you expect from your lodger. You may want to go over the house rules when you first meet a potential lodger as they will need to know whether they are comfortable with this. Should I use a lodger agreement? It is important that you and your lodger sign a lodger agreement, so that the rights of both the landlord and the lodger are clearly set out. This is also important if your lodger needs to claim Housing Benefit to help them pay you rent. Your lodger will need to provide a copy of the agreement to the Housing Benefit Department. You and your lodger should sign two copies and each keep a copy. How much should I charge my lodger? You can charge whatever rent you feel a lodger will be willing to pay. You could look at adverts in local newspapers or online e.g., and charge an amount that reflects the average weekly rent in your local area. Things to bear in mind when you are setting your rent: If you are a tax payer you can earn 7,500 tax free (from April 2016) under the Government s Rent a Room Scheme. If you receive more than this, you will need to declare it. If you are thinking of letting your spare room to someone who receives Housing Benefit, you need to be aware that if the rent that you charge is greater than the rent allowed by Housing Benefit (the Local Housing Allowance), your lodger will have to fund the shortfall themselves. Your lodger will only be entitled to the shared room rate of Local Housing Allowance. Contact your Housing Benefit department to find out how much this is in your area. Should I charge the lodger a deposit? A deposit is a payment taken by the landlord to hold as insurance against the lodger damaging the property or not failing to pay their rent. If your lodger leaves the property in the same condition you let it to them in and they did not develop any rent arrears, you need to return the deposit when they leave your home. It is therefore a good idea to ask your lodger for a deposit. However, you must remember to return it when they leave, it is a good idea to deposit it in a separate savings account while you hold it.

4 For lodgers on low income, gathering a deposit together may be difficult. Some organisations provide bonds or guarantees for lodgers. You need to consider whether you think this is an acceptable form of security. How should I go about finding a lodger? There are many ways and this depends on where you live and the type of lodger you are willing to have living in your home. If you rely on word of mouth to find a lodger, this is likely to mean your lodger will be a friend or extended family member. This might cause you some difficulties if you have to ask the lodger to leave, for example if they fail to pay their rent or behave badly. If you live in a university area, you might want to advertise for a lodger at the accommodation office of the university. Please note that they may want to inspect your home before they put your advert on the notice boards in areas students live. If you live close to a hospital you might want to consider contacting the hospital to find out whether they maintain a list of lodgings for staff or relatives of patients. You can also advertise in local newspapers, in local shops and on the internet. There are a number of sites you could use, for example: and uk.easyroommate.com. How should I select a lodger? It is always good to meet with people who respond to your adverts for a lodger. The meeting should ideally be in your home as it gives the potential lodger the opportunity to meet you and look around your home. It also gives you the opportunity to explain the basic rules and find out whether they are comfortable with them. It gives you the opportunity to find out if you would be happy to share your home with this person. You might want to meet a potential lodger with someone present you trust as their views may be important to you. When you meet the potential lodger, it s a good idea to gather some basic information about the, such as where they live, their contact address and telephone number. You also might want to ask to see some form of identification and find out how they intend to pay the rent. You should also ask them to provide you with 2 references so you can contact them to find out any more information. You should ring everyone you meet to let them know your decision. Can my lodger claim Housing Benefit if they have a low income? Yes. They will need to make a claim for Local Housing Allowance. They will have to show a formal written agreement to the Housing Benefit department as proof of their rental liability as your lodger. This is why you must complete 2 copies of the lodger agreement and give a copy to your lodger. Your lodger will have their Local Housing Allowance paid direct to them and they will be responsible for passing the payment on to you.

5 Recording rent payments You should give your lodger a rent book or a written statement that confirms you have received a rent payment. How will the money I receive affect my benefits? If you receive benefits you must inform the DWP and Housing Benefit department that you have taken in a lodger. Your benefit payments might be reduced to reflect the income you receive from your lodger. Currently, if you received a means tested benefit (Income Support or Income related Employment and Support Allowance or Income based Job Seekers Allowance) the first 20 of your income from your lodger will be disregarded and not affect your benefits. If you are on a low income and get Housing and Council tax benefit, your benefits will be adjusted slightly differently. The first 20 of income you receive is disregarded and your Housing Benefit will be reduced by 65p for every 1 you receive over that amount. Under Universal Credit any income you receive from lodgers is not counted and will not affect your benefits in any way. However, they will not be classed as occupying a bedroom and you will still have an under occupancy deduction from the Housing Element of your Universal Credit. If I under-occupy my home, will taking in a lodger mean that I am not affected by the Bedroom Tax? Usually, yes. If you under-occupy your home by one bedroom and the lodger you rent your spare room to uses your home as their only home, your home will be assessed as being fully occupied and the amount of Housing Benefit you receive will not be reduced. If you under-occupy your home by two bedrooms and took in one lodger, you would be considered as under-occupying by one bedroom rather than 2 and your housing benefit would be reduced for the one bedroom not being occupied. Currently, if you rent your spare room out to someone who does not class it as their main home (like a student or someone who uses the lodging Monday to Friday) you may still be considered as underoccupying your home. However, these rules are very different if you are claiming Universal Credit. Under Universal Credit rules any lodger does not count as part of your household which means that you would be affected by the bedroom tax, but you would be able to keep all of the income you received from lodgers, without it affecting your benefit. How should I deal with a problem lodger? You should try and deal with any problems at an early stage, for example, if they have not paid their rent or if they are not complying with one of your house rules you should talk to them and find out why. If following this conversation the problem is not resolved, you should write to your lodger, detailing what the problem is. You need to keep a copy of this letter and make sure it is dated.

6 If there is still no solution, you need to try a more formal letter, which says if things do not improve you will be asking for them to leave. Again, make sure the letter is dated and keep a copy yourself. Also, make a note of all incidents. If this second letter does not work, you will need to give your lodger a notice to quit. This is a letter which says that you are giving them a certain amount of time (7, 14 or 28 days) to leave the property. If the property is more serious in nature, such as violent or criminal behaviour a shorter notice period may be appropriate. In such cases you should contact the police and obtain advice from your local Citizens Advice Bureau or Shelter Cymru. In housing law, lodgers are considered to be excluded occupiers. This means that they have very few rights and can only stay until their landlord asks them to go. How do I evict a lodger who s causing me problems? If you have asked a lodger to leave (verbally or with written notice), in the days leading up to the date you want them to leave you should ask them what their arrangements are for leaving your home. If they need a few days more to make alternative arrangements, you could consider agreeing to this. If they state that they have no intention of moving out, you will need to evict them. It is important that you seek legal advice. This can be obtained from your local Citizen s Advice Bureau or Shelter Contact our Money Advice Team on money_advice_team@linc-cymru.co.uk Text (include your name and address or tenant key)