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A Guide For Live-In Landlords
What Is a Resident Landlord?
A resident landlord, sometimes referred to as a live in landlord is essentially when the owner of the property lets out either a room in their permanent residence, or a small portion of the property. This is commonly seen through subletting, but is important to make the distinction that if the resident landlord is not the owner and is an existing tenant, they must first get the consent of the owner or they could be found in breach of their tenancy agreement. For the owner of the property to qualify as a resident landlord, the rental opportunity must be their primary residence, meaning that they cannot live elsewhere.
Can a Live In Landlord Kick You Out?
When letting with a live in landlord it is essential to remember that the tenant will not have the full rights afforded through a traditional assured shorthold tenancy, but instead, be considered a lodger. With this being said the owner of the property is still not free to evict lodgers at will. If the agreement between the parties is a rolling or periodic tenancy then the resident landlord must provide the tenant with a period of notice before the eviction takes place. The length of this notice period will be detained within the agreement; but, if no such stipulation is made within the term of the tenancy agreement then “reasonable notice” must be given. Whilst this does not offer much clarity, typically this reasonable notice will be the same length as the rolling agreement; so if rent is paid each month, the notice will be four weeks.
However, if the agreement has a fixed term, typically around 6 to twelve months, the landlord will be unable to evict the tenant during this period unless both parties mutually agree to end the tenant, or the agreement contains a break clause. With this being said once this fixed term expires, owners will only need to give reasonable notice before eviction.
Do live in landlords need to be registered?
For the most part, live in landlords will not need to obtain a landlord license in order to rent out a room. However, it is worth noting that if the resident landlord allows three or more tenants from different families, each holding a different room but sharing communal areas, the property will then be considered a house in multiple occupation, or HMO, then requiring the landlord to obtain a license.
Does a Live in Landlord Need a Buy to Let Mortgage?
Typically, when an aspiring landlord is looking to purchase a property to let they will need to obtain a buy to let mortgage. In some instances where the occupants have already taken out a standard residential mortgage they will have two options, either approach the lender and gain permission to let, or reportage onto a buy to let product. It is worth noting that permission to let will only grant the owner consent to let for a short period of time, typically around six months. If the owner of the rental property is found to be letting to a tenant without first informing their provider than it is highly likely that they will be found in breach of their buy to let mortgage, making it far harder for them to take out lines of credit in the future. With this being said, it is essential that live in landlords note that they will be unable to obtain a buy to let mortgage as the terms of the loan prohibit the landlord living with the tenants in the rental, with some instances being treated as fraudulent behaviour.
Do I Have to Declare Rent a Room Income?
For those that are looking to increase the amount of income they can generate from their property, the Rent a Room scheme is a viable, and somewhat popular option for home owners. Alongside this additional income, landlords are also able to enjoy a certain amount of tax relief, with £7,500 a year being tax-free, with this being said if the property is being let jointly then this tax free threshold is reduced to £3,750.
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