ADVICE BEFORE RENTING OUT A ROOM IN YOUR HOUSE

Renting a room out has the potential to help homeowners avoid repossession and earn some extra income. It's good news for anyone with a room to spare. Having a lodger can typically bring in £393 a month or £4,716 a year, according to the research by Abbey.

However the reality can be slightly more complex. Renting out a room in a property is no longer a sitcom-based scenario typified by the likes of Rising Damp and Friends. Britain is now becoming a nation of landlords, with almost one million households renting out rooms to help pay off debts.

Households could earn thousands of pounds a year tax free but it is important to ensure you comply with all of the financial, legal and other matters involved with being a landlord. The Government's Rent a Room scheme allows households to earn up to £4,250 a year tax-free. However, those renting rooms to lodgers could find their details being studied by tax inspectors under government proposals for a national register of landlords.

It is also important to remember that where prospective landlords have a mortgage, lettings must be authorised by the lender as well as comply with the terms of the mortgage. If the borrower/landlord does not have the consent of their lender and the property is repossessed, the tenant may be evicted at very short notice.

Paul Slater, partner, says, "Budding landlords will benefit from legal professional to help them in the process of renting out their property. It is a delicate matter and the advice of a solicitor at an early stage, could prevent prospective landlords from losing out in the long run.  A solicitor can draw up or check a tenancy agreement for you, explain any related legal issues, warn you of any pitfalls. Getting proper legal advice at the outset also assists with obtaining recovery of the premises if things go wrong."

For further information please contact Paul Slater, Patrick Farrington or Patrick Nelson on 01785 211411.

22 December 2009

Disclaimer

The contents of this article are for the purposes of general awareness only.  They do not purport to constitute legal or professional advice.  The law may have changed since this article was published.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.