Renting a property room by room

[lalalonglegs]

We have to let our home for a few months - we seem to have found some nice tenants who are buddying up to rent it - each one is paying a set price for a specific bedroom and sharing the living room/kitchen/bathrooms etc. We have only let properties as a whole unit before so is there a specific contract we should be preparing? Should we put them all on the same contract or give them one each and, if we do that, how do we ensure they take collective responsibility for the shared areas? Any advice appreciated.

Still here, still

Letting the property out to several separate tenants means you are probably moving into HMO territory, which is an awful lot of hassle. In all honesty, I wouldn't do it. Along with the added legislation for HMOs, there's also a much higher chance of damage to the property (i.e a family would look after the whole property, but different tenants will look after their own rooms and the rest could go to pot).

If you do want to go ahead, I suggest you draw up one contract for the whole rent amount, in one name (i.e. ask them to nominate a 'head' tenant), and let them sort out the proportioning of the rent between themselves (in effect the head tenant will be informally sub-letting the other rooms). But often one tenant won't be willing to act for the others, as they would be the one responsible for any outstanding rent or damage.

It isn't affected by HMO legislation and the tenants all seem quite mature and sensible but, as they do not know each other, I think it would be very unlikely that one would want to take collective responsibility for the rest. That is why I am interested in finding out about contracts that are used in these circumstances - has anyone any experience of this?

It must be different rules for different areas then - I'm in Scotland and any properties (including normal houses and flats) that have three or more unrelated tenants who share bathing/cooking facilities are classed as a HMO, and require an inspection by the council and a special licence, fire doors etc. I don't know if England is covered by one set of rules like Scotland is, or if each council sets their own criteria for what classes as a HMO, but obviously you'll know what the rules are for your area. Regardless of the legislation, if you google 'HMO tenancy contracts' you should find something suitable, as it'd basically be the same set up.

The Landlord Zone is a very good forum for letting info and advice.

Great tip, MrsL - I'll have a look there (HMOs only kick in in England if there are five or more unrelated tenants sharing facilities).

Thanks

we're renting our house out and found similar tenants but abandoned it because of the HMO thing. you can be fined £20k for failing to apply for a licence. (a fact our estate agent conveniently forgot, reassuring us we didn;t need to do anything). and I'm reasonably sure HMO kicks in at less than 5 people. according to thisit's 3 or more people forming 2 or more separate households.

I spoke at some length to our local council and they told me they would have to inspect the house I might have to make substantial changes - including installing fire doors, a commercial-type fire alarm and possibly, even, building walls up the side of my staircase.

thankfully we found a family instead.

Have checked with my local authority and they definitely don't get involved unless it is five or more tenants. Phew!

sounds like you have a sensible LA...unlike mine who seemed convinced I was some scrote who wanted to shove 20 migrant workers into a 2-up 2-down - not someone with a nice family home they were considering renting to some Chinese students..."didn't you think of all this when you decided to rent out a property" the man said to me. well, I kind of had an idea it might be an issue but I didn't know the finer details. which is why I'm ringing you, you plank.

Tee hee - my LA also charges lowest council tax in the country. Am doubly lucky

Thanks for all advice

Lala what are your plans if one of the tenants wants to leave the property> Will the remaining tenants be able to stay or will (in which case individual agreements would be better probably) or would you expect the other tenants to move out, cover the rent of the departing tenant or find an alternative in which case a joint tenancy might be better.

They are all on six-month tenancies, if one of them wants to leave before then, they have to find a replacement tenant who passes credit checks. I live in London so this isn't too much of a problem - we've always allowed this when we have rented our other property and never had a void so far. Hopefully we will be back by October.

You will however be liable for the Council tax if they are all on separate tenancy agreements.

Gosh, didn't know that - but they seem to think that they will be paying council tax so will probably keep quiet [rachman emoticon].

The CTAX office will twig if there are lots of names on the tenancy agreement, and enquire if they are separate agreements. Under the hierarchy of liability, you will be liable, and when the CTAX office twigs you will be billed and it will be backdated (or would be if it was me).

I was going to say the same thing about council tax but didn't know if it worked differently up here. In fact the usual arrangement with room-by-room tenants up here is that utility bills are also included in the rent - a group of tenants who don't know each other are unlikely to want to split bills between them, as someone would have to be nominated to take charge and make the payment so would be chasing others for the money, and of course there'd be the usual arguments about who uses more electricity, and 'I'm not paying the same as X because he leaves all the lights on' etc, and someone could leave without paying their share. You'll have a decent idea of what a normal utilities are for the house, so you can just add extra onto the rent for each room to cover them (plus a bit extra, for contingency). You could also have a clause in the tenancy to say utilities are covered up to X amount per month per tenant, and if they exceed this they will be required to pay the extra and sort it out between themselves. It also means you can keep all the bills in your name, which makes it easier on your return.

Thanks for the advice.