Commercial Insurance Articles
What's the difference between a lodger and a tenant?
12 Dec 2015
Lodger and tenant – two words that are often used interchangeably but have quite separate legal meanings and insurance implications.
The crucial difference is whether you live in the same property as the person paying rent. As a live-in or resident landlord, you will share your home with lodgers. If you receive rent on a property you do not live in, the rent-payers who live there will be tenants and you are a live-out landlord.
If you live under the same roof but do not share living space, for example if someone lives in the basement of your home with their own door and only shares your hallway, they will be classed as a tenant rather than a lodger.
Let’s consider how you as a landlord may be affected by having a lodger or tenant.
1. Tenants have more rights than lodgersTenants live in your property based on a tenancy agreement and are entitled to certain rights, for example standard notice period and processes around eviction. Lodgers have a licence rather than a tenancy, and enjoy fewer rights than tenants. For example, by law you only have to give lodgers ‘reasonable’ notice to leave, which is generally 28 days. It’s a good idea to agree a written licence with a lodger setting out your conditions and rules.
2. Lodgers cannot exclude landlords from their roomIf you want to visit a property leased by a tenant you will need to give them notice unless it’s an emergency. Lodgers, on the other hand, cannot prevent you from entering their room. You should not allow a lodger to put a lock on their room unless you also have a key. It is legal to ask a lodger to move to another room within the same property, although this might not make you popular!
3. Your liabilities are less with a lodgerLive-out landlords owe a long list of legal responsibilities to their tenants; all sorts of regulations apply around fire doors, smoke alarms and so on. While you have to ensure your property is safe for a lodger, for example by having an annual gas safety check, the rules are much less stringent.
4. You might provide servicesIf you have a lodger, it might be that you provide some services, whether on a formal or informal basis. For example, you may cook meals for them, do their laundry or carry out cleaning. It’s often a good idea to provide a service that involves entering the lodger’s room every few weeks, so you will pick up on any problems early such as smoking in the room, mould or other damage.
5. Deposit differencesTenants living on an Assured Shorthold Tenancy are entitled by law to have their deposits lodged with a protection scheme. With a lodger, if you choose to take a deposit there is no obligation to keep it in a protection scheme, although you can if you wish.
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