Could you be a landlord without realising it? And if so, what kind of landlord are you — and what are your legal responsibilities? This guide will go through the main kinds of residential landlord that exist in the UK.
At the simplest level, a landlord is someone who rents out a home to someone else. Typically, a landlord will let a whole property, like a house or flat and not live in it themselves. But landlords can also let individual rooms to tenants in a property with shared communal areas.
It is also possible to rent a room in the landlord’s primary residence (i.e. their home). In this case the renter would be a lodger.
There are landlords who rent out parcels of land or commercial property, but this article focuses on landlords who let residential property (i.e. homes) to tenants and lodgers in the UK.
While residential landlords do not legally have to offer contracts or tenancy agreements, they are legally responsible for many things that they and their tenants should be clear about. There are many obligations they can’t get out of – even if they write a contract that says they can.
A Landlord’s Responsibilities
Most landlords who rent out whole properties are aware of their legal responsibilities. Key among those are:
- Repairs to the structure and exterior of the property
- Heating and hot water systems
- Gas and electricity safety certificates
- Fire safety and ensuring a property is fit for habitation
- Communal areas in multi-occupancy dwellings
These landlords must also abide by disability, sex and racial equality legislation.
However, if you let a room in your own home, you may not have even considered yourself to be a landlord. Technically, you are and have responsibilities of your own.
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Landlords who Let to Family or Friends
If you have a spare property and you let your family or friends live there for free, then you are a landlord. You will still need to ensure the property is safe. It will affect any mortgage you have on the property, your home insurance and your council tax rates.
Landlords with Lodgers: ‘Live in’ Landlords
The good news is the list of responsibilities is not extensive. But you must still stick to the rules to protect your tenant – and protect yourself in case of any dispute. Here are the areas you must address by law.
Right to rent
It is the landlord’s responsibility to check that any lodger has the correct immigration status to rent and live in England. A photo driving licence or passport is enough for UK citizens, and currently, EU nationals can provide their passport or identity card. Keep a copy of the document for your records. If the lodger is from outside the UK and EU, you will need additional documents. Check our guide on right to rent checks for more information.
Gas and electricity safety
The landlord must arrange an annual gas safety inspection, to be conducted by a Gas Safe registered engineer. You will receive copies of a Gas Safety Certificate, one of which you should serve to the lodger. Similarly, you must ensure electrical systems and appliances are safe. The best way to do this is to order portable appliance testing (PAT) and an Electrical Installation Condition Report (EICR).
Smoke and carbon monoxide alarms
While most homes will already have a smoke alarm on each floor, it is now also a legal requirement for landlords to provide carbon monoxide detectors, too.
Furnishings and product safety regulations
All furniture and furnishings that your lodger might use – so everything in their room and shared areas of the house – must conform to the latest fire safety regulations. All other products and equipment, like microwaves, ovens, lights, washing machines, must also conform to product safety regulations, which are set by your local Trading Standards office.
Having more than two lodgers in your home is likely to classify your property as an HMO (a House in Multiple Occupation). If so, you may be required to obtain an HMO licence from your local authority. You can check your local authority’s website to see what licensing schemes they operate.
Are You Taking in Lodgers?
Assuming you have met the responsibilities listed above, you can take in a lodger in your home. You do not have to provide a tenancy agreement, since lodgers do not have the same protection as tenants. Instead, a lodgers are usually asked to sign a licence. Although the law does not require a landlord to provide one, it is strongly recommended to have the terms of the license written down and signed. This will make clear your responsibilities and what is expected of the lodger.
The lodger has the use of a bedroom and access to other areas of the property, such as the bathroom, kitchen, stairs and corridors, and, optionally, the living room. Legally speaking, the lodger pays a monthly licence fee which is presumed to be inclusive of council tax. However, the lodger shall be expected to pay a fair share of utility bills, or you could simply build this into the rent charged.
Licences run on a periodic basis, perhaps one rental month period to the next, or a longer fixed term that can be ended sooner with a break clause agreed in advance.
Financial Implications of Having a Lodger
A landlord who previously enjoyed a single-person 25% discount on council tax will have to inform the local authority they now have a lodger. They will then have to pay the full rate.
The better news is that under the Government’s Rent a Room Scheme, you can earn up to £7,500 per year tax-free from letting out furnished accommodation in your home (half if you share the income with a partner).
Some More Landlord Types you Might Come Across
While we have dealt with the main types of residential landlord in the UK, there are others that you come across. Here are the key distinctions.
Superior landlords, mesne tenants, sub-landlords and tenants
Think of the superior landlord as the “big boss”. He or she is the person who owns the interest in a building, and therefore has right to possession once a lease to the property is over. For example, a corporation may own a block of flats in which an individual has purchased a lease. That person may then decide to let, in which case they are the ‘mesne tenant’ (or sub-landlord) to whom the tenant is responsible. The sub-landlord, in turn, is accountable to the superior landlord until the lease expires.
Freehold and leasehold landlords
A landlord who has no superior landlord is the freeholder. They own the property outright. A landlord who only leases the property, however, is a leasehold landlord. The difference matters to the landlord, but not so much to any tenant, so long as their tenancy agreement date does not go over the leasehold landlord’s lease date. The leasehold landlord may have to pay ground rent or service charges to the freeholder or their management company – and this may be passed on to the tenant in the form of higher rents.
Technically, if you sublet a property or part of it, you are not a landlord yourself. Subletting happens when a tenant lets out all or part of a home to a subtenant. Subletters should receive the permission of their landlord before taking in a subtenant. In most cases, this would be covered in the tenancy agreement or a further written agreement once the tenancy has started. Tenants who break the terms of the agreement could be subject to legal action and possible eviction.
Rent to rent schemes
Although this is not a practice we would encourage, some people do use rent to rent as a means of earning a living. Rather than putting a deposit together and buying a property to let, you would simply rent out a property with the express intention of renting it on to someone else, hopefully with profit enough to make it worth your while.
You would absolutely need the landlord’s permission if intending to sublet the whole property. It’s also known as Guaranteed Rent, since you agree to take on the property for a set term at a fixed rent. While this can be done legally, it is often illegal in practice, and creates many risks and grey areas that could be incredibly costly to the landlord, rent-to-rent operator, and tenant. Beware!
Repossessing your property
No matter what type of landlord you are, whether you let out an entire property or a room, there may be times when there is a breakdown in relations with the tenant or lodger. There are strict rules about how you can get your tenants to leave. If they are not followed, you can face charges of harassment or illegal eviction.
Just what process you must follow depends on the type of tenancy agreement in place. In most cases, landlords must service a valid notice, wait for it to expire and then apply to court for a repossession order if the tenant has not moved out.
Assured shorthold tenancies (in England & Wales)
For both periodic and fixed-term tenancies, you must first issue a Section 21 notice if you want your property back at the end of the fixed term. If the tenants have broken the terms of the tenancy, you may be able to serve a Section 8 notice on your tenant. If they refuse to leave on the specified date, apply for a standard possession order. If they still don’t go, you can apply for a possession order.
If you share your primary home with a lodger and share essential facilities like a kitchen and bathroom, then the lodgers will be an excluded occupier. This is separate status because it acknowledges that landlords are more vulnerable when sharing their own home. You need only give your lodger “reasonable notice” to quit. Usually, this will be one rental payment period. You can evict these tenants peaceably, for example by changing the lock on the room. You must take reasonable care of the lodger’s possessions in this case.