Taking in a lodger by renting out a room in your house should be an easy process. And taking in a lodger is a great way to earn money tax-free under the Rent a Room scheme. But it’s important that you get the right lodger for you.
In this article we outline what you should do to ensure that you get the right lodger, and how you can check your lodger’s references and run some effective security and credit checks
Lodger Screening and Selection – Step 1
Set the scene for your lodger – rent a room advertising
Sometimes your search for a lodger will help determine the ‘sort’ of lodger you get. Here are some simple things you can do to ensure that you attract the right ‘sort’ of lodger.
Make sure that your property is clean and tidy. Your property should provide the lodger with all they need: cooking, washing, drying, home entertainment and a reasonable level of privacy. Most lodgers will expect a double bed and a TV in their room, preferably with an easily accessible bathroom, or, better still, an en suite.
If you can find a lodger through word of mouth, so much the better. It’s a bit like an instant guarantee! Failing this, you could extend your search to large, local employers, such as educational establishments, local authorities and hospitals. Many of these will have Accommodation Officers who can help.
The internet is increasingly popular with sites, such as SpareRoom.co.uk, making your search so much easier than ever before. And don’t forget the old-fashioned methods, such as an ad in the local shop or a classified ad in the local paper.
Remember that your advertisement is the first stage of your lodger screening process. You can aim to attract a certain ‘sort’ of lodger and to clearly exclude others. Although discrimination laws apply to lodgers, you can’t discriminate on the grounds of age, sex, race, disability, etc., but you can discriminate on the merits of a particular individual qualifying as a lodger in your house.
Lodger Screening and Selection – Step 2
Meet your potential lodger – the lodger interview
For your first lodger ‘interview’, have a checklist drawn up to make sure that you ask all the questions you need to, and give the prospective lodger all the information they need. Your lodger checklist should include information about:
- Where your property is
- What facilities it has
- What the local area is like
- What the rent is
- What the payment arrangements are
- What your deposit is
- Any specific ‘house rules’ or conditions
And your lodger checklist should allow you to get basic details that you need from the lodger:
- The lodger’s full name
- A permanent address for your lodger
- Your lodger’s contact telephone number
- Why your lodger is looking to rent a room
- How long your lodger intends to rent a room for
- When your lodger can move in
- Details of your lodger’s employment, etc.
Lodger Screening and Selection – Step 3
Collect the lodger’s details: lodger application forms
You should screen your would-be lodgers by using a Lodger Application Form. You should at least make basic checks that the information they have given to you is correct.
Each lodger you take in should complete the Lodger Application Form. This application form provides a legal declaration of your lodger’s identity, accommodation and employment history, their personal details, income status and references. It also explains to your lodger how you will collect rent, how much the rent is, as well as outlining the terms of your Lodger Agreement.
The Lodger Application Form is the basis of your lodger screening. It tells your lodger that credit and references checks will be made (in accordance with the 1988 Data Protection Act). Ask your prospective lodger to return this completed form as soon as possible.
We strongly recommend that, in addition to any checks you make yourself, a lodger credit check is always carried out. You may wish to charge the lodger a fee for this process, in which case the Lodger Application Form should state this.
Lodger Screening and Selection – Step 4
Verify your lodger: lodger credit checks
For very little cost you can professionally verify your lodger. Given the risk of fraud or bad debt, this is a highly recommended security check. Lawpack recommend Rentchecks’ Tenant Checking Service for both tenant and lodger verification. Rentchecks are affordable, reliable and quick.
Credit check out your new lodger here.
You can also conduct some basic checks yourself. Chase up the bank, employer and previous landlord references. It’s best to verify all references by telephone as people will often give a more full and frank assessment in conversation than in writing.
And remember the ‘last but one’ rule for previous landlords. Whilst the current landlord, who may want to see the back of your prospective lodger, may opt to give a glowing reference, this won’t be the case with the last but one!
Lodger Screening and Selection – Step 5
Make a formal Lodger Agreement
Once you have selected your lodger, let them know and get them to sign a Lodger Agreement. A formal Lodger Agreement can prevent a lot of arguments and trouble later. A Lodger Agreement gets everything down in writing and offers both of you legal protection.
Lodger Screening and Selection – Step 6
Make clear the house rules
Alongside your Lodger Agreement we advise that you provide a Starter Pack which can include a set of your house rules. This can be as detailed or as loose as you are comfortable with. Here are some things that your Lodger Starter Pack may include:
- House rules – access areas, no-go areas, responsibilities, smoking/no-smoking, etc.
- Appliance information (e.g. how to use TV, VCR, cooker, etc.)
- Local information
- Emergency information and contact numbers (e.g. fire procedure, door keys, isolator switches, water stop taps, electricity and gas meters, etc.)
Lodger Screening and Selection – Step 7
Set up a banker’s standing order
Make your life easy. If you set up a standing order payment to collect your rent, you can avoid a number of disputes and friction that can so easily arise if rent is a little late! You can use Lawpack’s Bank Standing Order Mandate Form to do this.
- Read all about taking in a lodger with our beginner’s quick-start guide
- Earn £4,250 tax free with the Rent a Room Scheme
- Lodgers: useful tips for beginner landlords
- Top tips for taking in a lodger