Lodgers or AST while landlord abroad

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    Lodgers or AST while landlord abroad

    Hi All,
    New member to the forum and seeking advice on a rather unusual situation. I own a semi detached house in London and currently have three great lodgers living with me. The problem is, that in a few months time I will need to go abroad and look after my elderly father (I am a UK citizen FYI). I don’t know how long I will be away, but it will be at least six months. I will not be taking up employment there or renting out a home.
    In this case, I will still be classed as a UK tax resident by HMRC, as I will have fulfilled the second condition for my residence:
    • you spent 183 or more days in the UK in the tax year
    • your only home was in the UK - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year
    I have a mortgage. My insurer said there is no increased premium as long as the property is occupied in my absence. However, it is unclear at what point they are no longer lodgers – some advice says if you spend less than half the year at the property, but have read elsewhere that as long as you can prove its your primary residence with the following (which I can), you will be ok:
    Not having employment overseas
    Paying utility bills
    Keeping most of your possessions there
    Spending part of the year there (will be flying back once every 4 months if I have to stay overseas).

    The mortgage provider knows about the lodgers and is fine with that. But has said that if I am away for such a large part of the year they may become tenants. However, I can only get Permission to Lease for a single set of tenants (i.e an individual or a family) rather than three unrelated tenants). So I was thinking of putting them on AST agreements for each room, but it doesn’t seem feasible with the mortgage.
    Don’t know what to do at this point. I either get some reassurance that their status as lodgers is ok, or I rent out the whole property to one of them, and the other two pay them rent (which I am not sure they are willing to do.

    Your help much appreciated as ever! Have tried googling and even asking legal advice, with limited luck because it is such an unusual situation.


    #2
    The reason it's hard to find definitive answers is because the answer isn't clear.

    At some point in time, in the absence of a previously living in landlord, the lodgers would become tenants.
    It's just that no one knows for sure when that point is - there's nothing definitive available.

    It doesn't happen for a few days or weeks, but it must happen after a few years.
    So somewhere between those points.

    There are four situations where this could matter in practice and you could seek to mitigate them.
    If you have taken a deposit and the lodgers mutate into tenants, you will be in breach of the tenancy deposit regulations.
    If you try and give notice to one of the lodgers and it doesn't comply with the regulations relating to tenants.
    If you try and increase the rent or do anything else that the occupants don't like (like move someone else in).
    When you move back in, if the lodgers are now tenants, that's a criminal offence.

    Or you could ask everyone to leave.
    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


      #3
      Only a judge were this get to court could tell you, based on the circumstances THEN (i.e. not what you state now)and evidence supplied by you and lodgers/tenants. (Eg illegal eviction hearing)

      Safer to assume and have paperwork for an AST. Most tenants go on expiry of s21 anyway.

      Remember, landlords can & have gone to jail for illegal eviction!
      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


        #4
        If the lodgers are three separate individuals you have an HMO.
        If you have a couple and one other, if you move out and it becomes a tenancy it will also be an HMO.
        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

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