Am I a Landlord even if I don’t charge rent?
I’ve been asked this question a lot recently, particularly by parents that allow their children to live in a property rent-free.
Blimey, maybe it’s time I traded my folks’ in (Mum, dad… I love you, but I feel like I’ve been lumbered with a raw deal here)!
In reality, when anyone asks the question, what they’re really asking is, “am I still legally obligated to comply with all the [scary] landlord regulations?” Is that it, is that why you’re here?
Whatever your specific case might be – whether you’re generous enough to allow your precious sweet-pea or foe to live rent-free in a property – I’m here to shed some light on the matter! Let’s get into it…
I’m going to do you a favour because I’m feeling kinda’ fruity today; I’m going to put you out of your misery quickly, so you don’t have to dredge through all the guff to find the answer to your question. Spank me later.
Although, the answer probably isn’t going to sit well, so you really might want to spank me after I deliver this bomb-shell.
If you permit someone to live in a property (that isn’t your own residential home) – whether they’re blood related or otherwise – then you’re most likely a landlord, which means you’re legally obligated to comply with all the usual landlord legal obligations. That includes everything from gas & electrical safety to serving all the paperwork.
- Yes, you can be a landlord even if you don’t charge rent.
- Yes, can be a landlord even if you don’t have a written tenancy agreement.
- Yes, can be a landlord even if the occupant is your child(ren).
You don’t agree with me? Okay, that’s cool. But let me put forward my case…
Definition of an assured tenancy
Firstly, we need to look at the definition of an assured tenancy (which is a type of tenancy that almost all private residential tenants have today), because if you have created one of those with the person living in your property, then you’re a landlord.
As per the Housing Act 1988:
A tenancy under which a dwelling-house is let as a separate dwelling is for the purposes of this Act an assured tenancy if and so long as—
(a)the tenant or, as the case may be, each of the joint tenants is an individual; and
(b)the tenant or, as the case may be, at least one of the joint tenants occupies the dwelling-house as his only or principal home; and
(c)the tenancy is not one which, by virtue of subsection (2) or subsection (6) below, cannot be an assured tenancy.
What the hell did he just say?
Yeah, I’m with you!!
Essentially, one of the primary requirements of an assured tenancy is for a “dwelling” (i.e. house) to be let as a separate dwelling to an individual, who is a single (sole) or joint tenant, where the tenant(s) occupies the house as their only or principal home.
So if you give permission for anyone to live in a property that is separate from your own home, then you’ve almost certainly created an assured tenancy, and therefore you’re the landlord.
There is actually NO mention of money (i.e. rent) required to be exchanged in order for an assured tenancy to be formed or valid! Money is just an added bonus.
You should read the Housing Act 1988 for full clarity. Good luck!
An expert’s answer to the question…
In case you’re sitting there wondering, “who the hell is this guy anyways, he doesn’t know what he’s talking about?”… then, fuck you, too, sir!
No, I kid.
I wouldn’t blame you. I’d probably think the same if I were you.
Here’s what David Cox, chief executive of letting agents association ARLA Propertymark, said in this article on thisismoney.co.uk, titled, “I want to let a property to a family member and not charge them rent, will I fall foul of any rules?”:
When you inherit a property which you then let out, you are subject to all landlord and tenant law.
(ignore the inheritance part, it isn’t relevant, the point of letting out any property is, though!)
These are all required irrespective of whether you are letting the property to a family member, friend or complete stranger and it doesn’t matter whether or not you are charging rent.
I rest my case! *drops mic*
Oh, wait, that was premature!
Have you just found out you’re a landlord?
If you’ve just found out that you’re one of those ‘orrible landlords (welcome to the club, by the way), and you feel like a dirty fish out of water, please don’t worry! Compose yourself. You can do this! It isn’t as terrifying as it seems. Maybe!
While it might be ridiculously easy to neglect your newfound obligations because you wholehearted believe that your own flesh and blood would never cause you any distress no matter how rogue you go – I urge you to have a thorough rethink!
Yes, you’re probably right, it may never come to light that you failed to comply with your obligations because your precious daughter, for example, would never grass on you. To that, I have three comments:
- I’ve seen it happen. Believe you me.
In fact, this blog is riddled with comments from parents’ that have been royally scorned by their first child. They never thought their sweet-pea could do it to them.
Oh, sweet-pea did it to them alright. Hard!
- Many of the legal requirements focus on safety, they are there to protect the occupant. The reality is, anything could happen in the property, and you don’t want that on your conscience.
- Presumably, you will have landlord insurance in place (oh, you don’t? You should fix that!) – you could void your policy if you don’t meet certain obligations.
For example, if you don’t provide a functioning smoke alarm (a legal requirement for landlords in England) and the house burns down, you might not be able to make a claim.
Bottom line, there are more reasons to comply than to avoid!
Want more reassurance on your status?
I recommend getting in touch with your local citizens advice – they should be able to tell you what’s what.
I’ve tagged specific blog posts in the “You might also like…” section below, which I believe would be useful for anyone that has just become an accidental landlord!
*drops the mic*
Disclaimer: I’m just a landlord blogger; I’m 100% not qualified to give legal or financial advice. I’m a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.