Renting a room in your principle private home to private tenants can earn you up to £7,500 tax free under the government Rent A Room scheme. Take some time to read over the information provided by the HM Customs and Revenue Guidance HS223 Rent a Room Scheme 2020
It is recommended that both the Homeowner and Lodger agree on some basic ground-rules in advance. These ground-rules should be put in writing and both parties should each sign and keep a copy of the agreement. This will avoid disputes as the agreement can be referred to if there should be confusion or disagreement.
Suggestions For Ground-Rules
- Decide before hand on the length of time that the Lodger will be staying.
- Decide on a minimum period of notice to be given if either the
- Lodger or the Homeowner wants to terminate the agreement.
- Decide on how much rent is to be paid. Is an advance payment required? Should the cost of rental be reviewed periodically? Is the rent to be paid weekly/fortnightly/monthly?
- Is the Lodger allowed to have visitors? If yes, can these visitors stay overnight?
- Noise - what kind of noise levels (television, stereos etc.) are permissible?
- Additional services - ensure there is no ambiguity regarding additional services. For example are meals and laundry included/excluded?
- It is always a good idea to keep records of payments received or additional expenses.
- Homeowners should ensure they are comfortable with the potential Lodger. Remember this person will be sharing your home, so you should feel completely comfortable with them.
- GetDigs.co.uk is not responsible for any issues that arise with Lodgers. The vetting process is entirely up the Homeowner.
- Ensure you meet in person to evaluate their suitability. Have a list of questions prepared so that you can ask them at your meeting.
What Rights Do You Have As A Landlord/Homeowner?
- You may set the rent. However, rent cannot be more than the normal currently applicable rates.
- You have the right to receive your rent payment on the agreed date.
- You have the right to review the rent every 12 months, however the Lodger should be made aware of this in advance.
What Rights Do You Not Have As A Landlord/Homeowner?
- You may not enter the Lodgers room without the permission of the Lodger.
- Take or retain any of your Lodgers property, even if they haven't been forthcoming with the rent.
When May A Landlord Withhold A Security Deposit?
- When the Lodger does not give you the agreed notice when terminating the tenancy.
- When the Lodger has left outstanding bills or rental arrears.
- When the Lodger has caused some property damage which goes beyond normal wear and tear.
In terms of rental payment you would be expected to pay in the region of 60% of the going rate of a room that you would rent for a full week. This would depend of course on how many days you intend renting the room for. This is an important issue and should be agreed with the Homeowner in advance of the rental.
Always check out the room, in person, in advance - ensure it is suitable to your requirements.
It is always a good idea to for the Lodger and the Homeowner to agree to some ground-rules in advance. These ground-rules should be put in writing and both parties should sign and keep a copy each of the agreement. This avoids disputes as the agreement can be referred to if there should be confusion or any disagreement.
What Should You Agree On Beforehand?
- Access to other areas of the house. Can I use the garden, the living room, the kitchen?
- Is the property smoking or non-smoking?
- Does the room have a television set?
- Can you use the washing machine?
- How secure is the room and your property?
- Clarify the situation with regards to keys for the room and property - who has them? etc.
Once again, we would encourage both Homeowners and Lodgers to read over the information provided by the HM Customs and Revenue Guidance HS223 Rent a Room Scheme 2020