7 steps to screening and selecting your lodger

Lawpack on March 27, 2020

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.

At the first meeting you should always have a Lodger Application Form with you and a receipt book or rent book for any cash holding deposits taken.

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.

Further information

 

External links

Which tenancy agreement do I need?

Lawpack on March 27, 2020

You’ve got your rental property and found your tenant – all you need to do is get them to sign a tenancy agreement. But which one do you need.

If you’re a landlord who thinks tenancy agreements are unnecessary, think again! A tenancy agreement is vital as it sets out the rights and obligations between you and your tenant and, as a result, protects your property and your finances. But you must use the correct tenancy agreement for the right type of tenancy concerned.

Lawpack has a wide range of tenancy agreements, including assured shorthold tenancy agreements, non-assured shorthold tenancy agreements, private residential tenancy agreements, company let tenancy agreements and lodger agreements. But which tenancy agreement should you use?

England and Wales

AST or non-AST?

Most tenancies in England & Wales are assured shorthold tenancies (ASTs) and are regulated by the Housing Act 1988.

Some tenancies are exceptions, however, and you may need to use a non-assured shorthold tenancy agreement if any of the following applies:

  • The rent is at the rate of over £100,000 a year
  • The tenant is living in self-contained premises in the same building as you
  • The tenant is a limited company
  • The property isn’t the tenant’s main home (e.g. a weekend cottage)
  • It’s a holiday let

Find out more about non-AST tenancy agreements and which one you need to use below.

Assured Shorthold Tenancy (AST)

Assuming your tenancy is an AST, slightly different forms of tenancy agreement need to be used depending on whether:

  • there is one or more tenants living in the whole flat or house, or
  • there are a number of tenants who all have separate tenancy agreements for their own room, with shared use of the rest of the property

Lawpack publishes the following AST tenancy agreements you can use:

Unfurnished Tenancy Agreement / Furnished Tenancy Agreement

You can use either of these AST tenancy agreements if you, as the landlord, don’t live at the property. Both tenancy agreements can be used for a single tenant who occupies the property on their own, or a group of tenants who jointly occupy the property and share responsibility.

If the tenants are sharing and sign this tenancy agreement as a group, it’s best if they are all family or friends as problems can arise if you’re letting to people who don’t know each other and they want to leave the property at different times.

Tenancy Agreement for a Room

It may be preferable for you to get them to sign a tenancy agreement for their individual room, which gives them shared use of the rest of the property. When giving your sharing tenants a separate tenancy agreement, it’s best to use a non-resident house share/flat share agreement.

This tenancy agreement can be used if the tenant is living in a room in the property where you, as the landlord, are not resident.

Under this AST tenancy agreement, the tenant has exclusive occupation of their designated room and will share the use and facilities of the house or flat (e.g. bathroom, toilet, kitchen and sitting room) with other occupiers of the furnished property.

Non-Assured Shorthold Tenancy

In England & Wales non-assured tenancy agreements are also known as ‘common law’ tenancy agreements as they are governed by underlying common law and are not regulated by the Housing Act 1988.

Lawpack has the following non-AST tenancy agreements you can use:

Contractual Tenancy Agreement (Non-Assured Shorthold Tenancy Agreement)

This non-AST tenancy agreement (for England & Wales) should be used if:

  • The annual rent exceeds £100,000 a year
  • The premises being let is self-contained accommodation in a property that has been converted from a single property to multiple units (e.g. a house converted into flats), where you (the landlord) live
  • The property isn’t the tenant’s principal home (e.g. a weekend cottage)

This common law tenancy agreement can be used for a single tenant who occupies the property on their own, or a group of tenants who jointly occupy the property and share responsibility.

Company Let Tenancy Agreement

This Company Let Tenancy Agreement should be used if you want to let a house or flat in England or Wales to a company.

This common law tenancy agreement should be used where the tenant is a company and the occupier of the property is an employee or visitor of the company, with their family.

What if I use an AST by mistake?

If you accidentally use an AST instead of a common law tenancy agreement, don’t panic. It doesn’t mean that your tenant isn’t entitled to live in the property and doesn’t have a proper tenancy. But some parts of the tenancy agreement – those relating to the AST – will be misleading and could cause problems later down the line (e.g. you may have difficulty evicting the tenant at a later date).

Other letting agreements

Holiday Letting Agreement

This rental agreement can be used if you’re letting out a furnished property in England & Wales on a holiday let basis (e.g. for a limited period or holiday). It can be used with most types of holiday let properties (e.g. a house, apartment, flat, caravan or cottage).

The Holiday Letting Agreement is specifically excluded from the Housing Act 1988, so tenants have no security of tenure and must vacate the property at the end of the fixed term, or if found to be in breach of the terms of the Holiday Let Agreement.

Lodger Agreement

You can use this Lodger Agreement when you want to rent a room in your furnished home and are happy for the lodger to share the common parts of the property (e.g. bathroom, toilet, kitchen and sitting room) with you. But this Lodger Agreement can only be used in situations where the property is your principal home.

Scotland

Private Residential Tenancy agreement (PRT)

PRTs are similar to ASTs in England & Wales. You can use a short assured tenancy agreement if you, as the landlord, don’t live at the property.

Lawpack has the following Scottish PRT tenancy agreements you can use:

Unfurnished Tenancy Agreement / Furnished Tenancy Agreement

Both of these PRT tenancy agreements can be used for a single tenant who occupies the property on their own, or a group of tenants who jointly occupy the property and share responsibility.

Tenancy Agreement for a Room

This tenancy agreement can be used if the tenant is living in a room in a furnished property where you, as landlord, are not resident.

Under this PRT tenancy agreement, the tenant has exclusive occupation of their designated room and will share the use and facilities of the house or flat (e.g. bathroom, toilet, kitchen and sitting room) with other occupiers of the property.

Other letting agreements

Holiday Letting Agreement

This agreement can be used if you’re letting out a furnished property in Scotland on a holiday let basis (e.g. for a limited period or holiday).

It can be used with most types of holiday let properties (e.g. a house, apartment, flat, caravan or cottage).

The Holiday Letting Agreement is specifically excluded from the Housing Act 1988, so tenants have no security of tenure and must vacate the property at the end of the fixed term, or if found to be in breach of the terms of the Holiday Let Agreement.

Lodger Agreement

You can use this Lodger Agreement when you want to rent a room in your furnished home and are happy for the lodger to share the common parts of the property (e.g. bathroom, toilet, kitchen and sitting room) with you. But this Lodger Agreement can only be used in situations where the property is your principal home.

Northern Ireland

Private Tenancy

Lawpack has a Northern Ireland Tenancy Agreement which complies with the regulations that apply to private residential tenancies in Northern Ireland.

This private tenancy agreement can be used for a single tenant who occupies the property on their own, or for a group of tenants who jointly occupy the property and share responsibility.

The terms and conditions included in this tenancy agreement meet the legal requirement in Northern Ireland that a ‘Statement of Tenancy Terms’ must be given to the tenant. Plus it includes a Property Inventory of Furnishings, which all tenancies are required to have by law in Northern Ireland.