Lodgers and tenants have very different rights in the eyes of the law. Make sure you know which is which and use the correct contract.
If I asked you what a lodger was you’d probably say something like –
‘A lodger is someone who is paying you rent to live in your home’.
And if I asked you what a tenant was you’d likely say:
‘A tenant is paying you rent to live in a property you own but do not live in yourself.’
Broadly speaking you’d be right. There are always exceptions to the rule so for example if you rent a room in your home to someone but the only things you share with them are front door and hallway then they’re a tenant not a lodger, but in most instances the general rule applies.
A couple of weeks ago I had a call from a landlord (let’s call him Fred) who was renting out rooms in a four bedroom house. Two bedrooms were recently occupied, one was vacant and one would be vacant in a couple of weeks. We agreed I’d go round to look at the rooms and discuss next steps.
Me - OK, I’ll see you Saturday
Fred - OK. Just one last thing, I want a lodgers agreement not an AST. Can you do that?
Me - But you don’t live there, so we're looking at tenants not lodgers. Why do you want a lodgers agreement?
Fred - I gave the last lady an AST and she was lovely at first but then she lost her job, she couldn’t pay the rent and spent all day in her room running up the bills. I gave her two months notice and she still didn’t leave so I had to go to court and then get the bailiffs in. It cost me A LOT of money. A friend of mine says that with a lodgers agreement I can give one months notice and then change the locks.
Me - Erm, well your friend is right but that only applies to lodgers. These guys are tenants, so the rules are different. You can give them any paperwork you like but in the eyes of the law they’re still tenants and should have assured shorthold tenancies. You don't live there.
Fred - But I do have a room there. It’s got lots of books and stuff in it and it’s locked.
Me - But you don’t live there, it’s not your primary residence.
Fred - No but I do go round every couple of days.
Things went back and forth for a while but ultimately I couldn’t convince Fred against the lodgers agreement.
Was I just being pedantic?
No. Let’s say Fred’s worst nightmares are realised and his new tenant loses her job too, so he gives her a months notice and then changes the locks. This would be viewed by the courts as an illegal eviction which is a serious offence. It could lead to a criminal record, fine, compensation, and ultimately be very expensive. Additionally if he also fails to protect her deposit (because of course you don’t have to register a lodgers deposit in the way you do a tenants) and instead just puts it in the bank, he could be in even more trouble with additional financial penalties.
There are legal ways to protect yourself against rent arrears - Google 'Rent guarantee scheme' and 'guaranteed rent'.
Relying on incorrect paperwork is a very bad idea - as they say ‘if it looks like a duck and quacks like a duck, it’s a duck’.