Lodger Vs Tenant

Many people are (rightfully) confused about the difference between a lodger and a tenant, with many using the terms interchangeably. There are a number of legal distinctions between the two, and your living arrangements can dramatically affect the rights and responsibilities of both parties.

The biggest difference between a lodger and a tenant is the contract you have in place. With a tenant, you will have a tenancy agreement – typically an Assured Shorthold Tenancy agreement which grants the tenant at least six months’ tenancy and a two-month notice period. Lodgers, however, have a licence which is a different type of agreement. Hence why lodgers are legally known as “licensees” – not tenants.

A licence grants the occupier to be in the property legally, so that they are not seen as a trespasser, and will lay out house rules and conditions of their stay. Tenants have a lot more freedom and privacy in their day-to-day lives. Whilst they pay their rent, they effectively “own” the space that they occupy during the period of their tenancy.

Renting a room in your home can be massively beneficial to a homeowner with a spare room that is otherwise not being used. Not only can you earn up to £7,500 per year tax-free as part of the government’s Rent a Room Scheme, but having a lodger can help you financially with your household running costs if you live alone.

Lodger = excluded occupier

Tenant = non-excluded occupier

An excluded occupier is someone who shares accommodation with the homeowner, with limited rights,
whilst a non-excluded occupier occupies the property independently of the property owner or landlord.

So how do you know if you have a lodger or a tenant?

Does the occupier live in your main home, sharing facilities with you (e.g. occupying a spare room or the living room, sharing the kitchen)?

They are a lodger.

Does the occupier live in your main home, but with their own entrance and facilities (e.g. summer house at the end of your garden, or a self-contained basement with facilities, etc)?

They are a tenant.

Is your property split into purpose built flats, with yourself and the occupier living in different flats?

They are a tenant.

Do you live elsewhere, but the property is rented room-by-room to multiple occupants sharing facilities?

They are tenants house-sharing, and you may need a HMO licence and want to look into HMO insurance.

Do you have a signed licence agreement, despite the occupier occupying the entire house or flat and you living elsewhere?

They are still legally a tenant and not a lodger, even if you have signed a licence agreement with them instead of a tenancy agreement.

The Rights of a Lodger:

  • The landlord has the right to enter the room of a lodger without permission.
  • The lodger shouldn’t be allowed to put a lock on their door, to keep the landlord out.
  • The landlord is within their rights to ask the lodger to move to another room within the property.
  • Landlords are not required to protect any deposit within a tenancy deposit scheme.
  • Lodgers require “reasonable” notice to leave your home. This is typically 28 days.

The Rights of a Tenant:

  • The landlord is required to give at least 2 months’ notice if they are repossessing the property.
  • The deposit must be lodged with a tenancy deposit scheme.
  • The tenant requires at least 24 hours’ notice for inspections or visits.
  • The landlord is obligated to provide an Energy Performance Certificate, as well as ensure that the property is safe and all gas and electrical equipment is maintained.

Whether you have a lodger or a tenant, the type of insurance you will need will be very different. Having a lodger will mean that you will need a specialist home insurance policy, and will need to speak to your current home insurance company to discuss your options.

If you have a tenant then you will need landlord insurance for resident landlords, as your home insurance may be invalidated if used for rental activity.

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