Dual residency, one in the country, but with one room in an urban HMO that i manage

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    Dual residency, one in the country, but with one room in an urban HMO that i manage

    Hi

    I’d be grateful if anyone could give an opinion on the viability of the following tenancy and living arrangement.


    I have a four to five bed house in a big city.

    And also a much smaller house in the countryside.

    I’m beginning to seriously consider spending more time in the countryside (quality of life/ less stress etc)

    However, I’d also like to keep a foothold in the city, even if it’s only one room in my house.

    I would like to rent out some rooms in my larger house, almost certainly to unrelated individuals.
    (In fact, I’d have to , to make my plan commercially viable/affordable).

    I do understand that I would have to apply for an HMO license in any case where I rented out rooms in the larger house to more than two tenants.
    I would be prepared to do this.
    If I did so, I expect I would become the designated ‘manager’.

    Though, perhaps, an HMO license may not be necessary if I rented out only two rooms (though other potential legal problems might still exist if i’m deemed not to be ‘fully resident’ (?!)’


    At this point, i’m not sure how much of my time I would spend in each place, but if i reduce to one room with shared kitchen etc in the larger, i’m pretty sure I’d be spending a fair amount of time in the country.

    I'd probably stay in the city on work related assignments, but in ways that are not necessarily predictable or regular.

    Sorry about that uncertainty factor, however…with unpredictable work patterns, and also with a definite factor that i’m ‘testing the water’ for living in the countryside, that is my situation.

    Let's assume residence times in each location remains undefined for the purpose of this question.


    My question is -

    1. what potential problems in legality could arise from this arrangement?

    2. what form of tenancy agreement would be advised (or possible) for engaging any tenant renting a room in the larger, shared house, in this set up?

    3. Would I have to designate one or other house as a ‘main’ residence, and another as a ‘secondary’ residence?
    and, if so, would that entail various conditions/time spent in one or other place?


    Thanks very much if you have a view on this.


    with regards

    #2
    I'd say the best way to avoid any possible legal problems down the line would be:

    Forget any lodger arrangement, I believe that would just open a can of worms. It's unclear just what your residential status would be and so they will probably become de-facto tenants and not lodgers anyway.
    Register the city property as a HMO.
    Take 4 tenants on single room ASTs.
    Keep one room for your own use.

    There is no single definition of 'Main residence' in law.
    Usually, but not always, it's taken as the place where you live most of the time, or where you are on the electoral roll.
    But you can have more than one main residence for Capital Gains Tax purposes. https://www.gov.uk/tax-sell-home/absence-from-home
    There again with council tax, etc. it's different. https://www.gosport.gov.uk/sections/...ain-residence/
    (That wouldn't matter for CT on the HMO; the LL pays the CT for a HMO).

    Comment


      #3
      1 - You would need to decide which property you considered your main residence and be able to support that view. From the sound of it, your country property would be where you live, with the HMO being somewhere you stay. As above, you don't want this to be subject to challenge, if the HMO is meant to be licensed and isn't, you can't serve notice and may be prosecuted by the local authority. It's not something to leave vague.

      You need to consider all the HMO regulations that apply whether or not the property needs licensing. Most residential properties require modification to make them suitable.

      2 - There are lots of HMO tenancy agreements you can buy (or use if you join a landlord's association).

      3 - You would probably want to do this formally with HMRC for tax purposes. For that purpose, you essentially nominate one property in writing.
      When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
      Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

      Comment


        #4
        Would the property in question be mortgaged? If so, that could raise some difficulties. If you have it on a BTL mortgage you probably wouldn't be allowed to stay in it yourself. If you have it on a standard residential mortgage you wouldn't be allowed to let it.

        Comment


          #5
          Thanks to all of you for your comments.

          Yes, the issue of full time residency does sound like it represents a potential legal problem.

          So, from your comments, I accept the general advice here, which is to assume that my residency can be challenged.

          So i fully take on board from your kind advice that, in the 'town and country' scenario I describe

          1. AST for individual rooms for any tenant in the larger house would be the required.

          2. HMO licensing requirements will have to be fully addressed.


          As a follow up comment, however, I would say -

          What a shame that the whole question of Section 21 and AST seems to be 'in the air'.

          If I understand, nothing has been made clear on this subject yet (?).

          My understanding (possibly out of date) is that we have been told for sure that that it will be subject to change

          And all we know for sure is that existing AST and the system whereby a landlord can be assured of repossession (eventually) via S21 won't continue in future.

          Let's hope some clarity will arise for people trying to make long term plans right now.

          I myself don't understand how or why anyone would risk renting all or part of their home/property now.

          Though I also understand the many will *have to*, even in the face of current uncertainty (because they've borrowed a lot of money).

          Seems that we need to see a few pressing political developments to play out in the meantime.

          For my own situation (while i await legal clarity)

          A stopgap scenario for me is to remain fully resident in the larger house.

          (the smaller one is currently fully rented out, so i'll have to stick with that...it does at least mean that full residency in the larger house can't be challenged)

          In the meantime I can take on a 'lodger' (or possibly two, without incurring HMO responsibilities) under a 'licensed co-habitiing tenant' kind of arrangement.

          I have been told by a solicitor to forget about the concept of a 'lodger', at least as far as understanding that it is any kind of actual, fully recognised legal definition.

          (in that respect, it reminds me of the constant use of the term 'common law marriage'...although that is a term this is often invoked, people find that it does not actually exist as a legally recognised status if they find themselves in a legal dispute about children, custody etc. But i digress)

          My understanding is that a *fully resident* live-in landlord who takes on a tenant within their own home,
          can grant a *license* to a tenant, which forms the basis of a form of tenancy that is defined by the fact that
          the tenant *does not have sole usage of amenities* (such as their own kitchen).

          I think i'll just have to wait for some political and legal clarity about AST

          or at least, to a degree that would enable me to comfortably pursue the 'town and country' arrangement
          that I described in my original post.

          I don't feel great about doing anything 'subject to legal interpretation' when we don't even know if AST will exist next year.

          Thanks again.

          (PS, any enlightening comment on my understanding of 'lodger' or 'cohabiting licensed tenancy' would be gratefully received)

          Comment


            #6
            A licence is a posh way of saying permission. With a licence, the licensee doesn't even have exclusive use of their bedroom.

            Comment


              #7
              One thing that I'm unclear about with the 'lodger' (or i should say 'licensee') agreement, is the question of whether and how the resident landlord can designate areas of the house exclusively to themselves.

              Can the landlord retain, say, a room or rooms for their own exclusive use, and that they generally lock when they are away (so long as it's not the kitchen, or living room, or bathroom, which, i presume, you have to share, because a lodger/licensee is defined by NOT having exclusive use of facitilities ?

              Actually, i'd sort of be hoping that I could 'reserve' my own bathroom, there's more than one in the house.

              But can the landlord fully reserve a room or two, so long as the licensee (who is defined, if i understand correctly, by not having 'sole use of their own factilities) is sharing at least some essential facilities, such as kitchen?

              so, to be even more precise, could I have , say , a couple of rooms and bathroom that i use exclusively, while the tenant shares the kitchen, and has access to their own room (of course), the shared kitchen, a bathroom, and a common living room?

              Comment


                #8
                While your solicitor is technically correct (a lodger is an excluded occupier, who has a licence not a tenancy), the word lodger isn't an issue.
                Most people would be happy signing a lodger's agreement, but would worry about signing up as an excluded occupier.

                You can reserve rooms for your own use, provided you share some space with the lodger(s).

                There are a number of template agreements available which will cover off the issues properly.

                There has been no decision on s21 notices, and it may or may not change going forward.
                The current government keeps changing housing ministers, so nothing coherent happens (although the consultancy period ends soon).

                AST will probably change significantly under a Labour or Lib Dem government.
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  Teanancy types when renting a room or rooms in your home: https://www.gov.uk/rent-room-in-your...s-tenancy-type

                  Excluded occupiers (lodgers) rights: https://www.citizensadvice.org.uk/ho...heir-landlord/

                  Comment


                    #10
                    What the paperwork says doesn't decide things: It;s how people actually live. Forget licenses.. unless you want painful court experinces
                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      Thanks again for all these links and advice

                      Just a quick follow up to the point that 'a landlord can reserve rooms for your own use, provided you share some space with the lodgers'....

                      can the landlord reserve the *garden* for their own sole use when embarking on a 'lodger' type license agreement (while nonetheless sharing the only kitchen, which is higher up in the building) ?

                      thanks for any views

                      Comment


                        #12
                        You can pretty much detail any exclusions you like as long as there are shared facilities of some kind.
                        There's no statutory guidance about how much you have to share, but it's got to be realistic (not a bedroom and a shared cupboard).
                        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                        Comment


                          #13
                          If you think you may end up converting the lodger agreement to an AST down the line, I would serve all the relevant AST documents now, such as GSC, EPC, H2R so that there is no question later of when they received them.

                          Comment

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