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Becoming a resident landlord

You are a resident landlord if you let out part of a property which is your only or main home. If so, you can give less notice to end a letting because you are more vulnerable in your own home. Also, a tenant does not have the right to challenge the level of agreed rent.

If you own the property, you may need permission to let from your mortgage lender. If your home is leased, you will need to check the lease terms before letting any part of the property.

A tenant can only sublet a property if the tenancy agreement allows it.

Tenancy or licence to occupy – what is the difference?

If you let a room exclusively to a person and have to get permission to enter that room, then it is a tenancy. If you, or someone working for you, provide a service like cleaning, which requires unrestricted access to a let room, then it is a licence to occupy. A let will also be a licence to occupy if a person has to share their room(s) with another person they did not choose.

Excluded or non-excluded tenancy and licence

If you or your family share rooms with your tenants, like the kitchen and toilet, it is an excluded tenancy or licence. If you do not share any rooms it is a non-excluded tenancy or licence. You do not have to live in the house continuously for it to be considered excluded, but it must be your only or main home both before and at the end of a let.

The most common arrangements where a landlord lives in a property are:

• an excluded tenancy - for example, you let bedrooms in your house, sharing living room and kitchen or you let bedsits and do not service the rooms
• an excluded licence - for example, you take in lodgers and include cleaning or you let rooms as a roomshare with an existing tenant
• a non-excluded tenancy - for example, the house is split into self-contained flats, tenant and landlord live in separate flats
• a non-excluded licence - this gives you the right to choose another tenant to share an existing tenant's self-contained flat or gives you unrestricted access for cleaning

When you let a room, you should provide access to either shared or separate facilities, like a kitchen, bathroom and toilet.

• Excluded tenancies advice - Shelter website Opens new window

• Non-excluded tenancies advice - Shelter website Opens new window

Letting terms

You should agree at the start how a let will run. There is no minimum length of time to set and a let can be either:

• periodic - run indefinitely from one rent period to the next
• fixed term - last a set number of weeks, months or years

If you do not agree the length of a let, it will automatically become a periodic let. Licences can also be periodic or fixed, or open-ended for informal arrangements, such as allowing a friend to stay on an as-and-when basis. But you will not be able to call the arrangement a licence if you do not charge a regular rent.

Written tenancy agreements can help sort out any problems or disputes, but are not compulsory unless the let is for a fixed term of more than three years.

Repairs, maintenance and safety

You have responsibilities for repairs and maintenance to the property, and for gas and electrical appliance, and furniture and furnishings safety.

• Health and safety in privately rented accommodation

Houses in Multiple Occupation (HMO)

If you let rooms to several people, your property may be classed as an HMO. There are management and facilities standards for HMOs and often they require a licence.

• Houses with multiple private tenants - standards and landlord obligations

Rent, bills and other charges

There are no rules to limit how much rent you can charge. Usually, you would agree rent before letting and set out any increases in the tenancy agreement.

You must provide a rent book for tenants who pay weekly. For others it is not compulsory, but you should use receipts and keep records of payments.

You can accept Housing Benefit for rent. The council usually sends money to the tenant for them to pay rent. However, the council may pay rent directly to you if your tenant is eight weeks or more in rent arrears or has a history of missing rent payments.

Council Tax

You are responsible for Council Tax and can include part of the cost in the rent you decide to charge. The Council Tax rate will change according to the amount of people living in your property. If you are unsure who should pay Council Tax, you should check with the local council. If the let is for a self-contained flat, the council will normally bill your tenant directly.

• Find out about more about council tax from your local council Opens new window

Utility bills

If you let self-contained flats, utility bills will normally be sent directly to each tenant. When you pay the utility bills for the entire house, you can include an agreed charge within the rent. An alternative method is to install pre-paid meters.

Income Tax

You will be charged Income Tax on any rental income that you receive. You may be able to take advantage of the Rent a Room allowance which allows you to earn £4,250 (£2,125 if letting jointly) in rental income tax-free each year.

• Financial guide to renting out rooms in your home

• The Rent a Room scheme (money, tax and benefits section)

• Tax on property and rental income (money, tax and benefits section)

Deposits

You can ask for a deposit to cover possible damages or unpaid rent at the end of the let. You should make clear what your reasons would be for withholding any deposit money. If a potential tenant cannot afford a deposit, you can check with the local council who often have schemes that guarantee rent or costs for damages.

If you are a resident landlord you are not legally required to protect the deposit with one of the government-approved schemes.

How to end a letting

You or a tenant can end a non-excluded periodic let at any time by giving a written notice of when you are ending the let - a 'notice to quit'. You must give your tenant notice to quit at least four weeks before the date you want them to leave the property. If the tenant refuses to move out, you can apply to a court for a 'possession order'. If the court grants this, the tenant will be forced to leave your property.

Landlords of excluded tenancies only need to give 'reasonable' notice to quit. The length of notice that is reasonable depends on the circumstances, but is usually the same as the length of the rental payment period. This means that if rent is paid weekly the tenancy will require a one-week notice unless agreed otherwise. The notice does not have to be written, but it is a good idea to put it in writing in case there is a dispute later.

A fixed-term let will end on the agreed date without any notice, though you should remind a tenant of the agreement. You and your tenant can agree to end a fixed term earlier than first agreed. You can also end it earlier if your tenant breaks the tenancy agreement or if there is a break clause in the agreement.

Change of ownership

If you stop living in your home, the tenants can still stay there, but their tenancy type may change to reflect that you no longer live there.

If you sell your home and the new owner plans to live in the property they must:

• give notice to a tenant within 28 days that they intend to live there
• move in within six months of the sale

Until the new owner moves in, tenants will have more protection through tenancy laws because during this time there is no resident landlord. Their rights will depend on when they moved in. Read 'Types of tenancies - private renting' to find out about tenants' rights.

If you die, a tenancy will usually continue as though you were still resident, until someone else takes ownership.

If your property changes ownership - either by sale or inheritance - any existing tenancies and terms will continue under the new owner. A licence to occupy will generally only continue if a new agreement is arranged with the new owner.

• Types of tenancies - private renting

More useful links

• Guide to letting rooms in your home - Communities and Local Government (PDF, 347K) Opens new window

• Help with PDF files

• Tenancy agreement guide - Citizens Advice Opens new window

• Tenancy checker - Shelter website Opens new window

• Renting agreements - Shelter website Opens new window

Useful contacts

• Home and community useful contacts

• A-Z of local councils

• Communities and Local Government Opens new window