What is a live-in landlord?

When we think of a landlord, most of us probably think about the stereotypical scenario whereby the landlord rents out their entire property to a family with limited interaction throughout the tenancy. However, there are different types of landlords, such as live-in landlords. 

This comprehensive guide will focus on live-in landlords by outlining the legal and practical differences from traditional landlords. We’ll summarise the live-in landlord responsibilities, discuss the benefits and highlight some live-in landlord problems. This article will then offer practical advice to live-in landlords on successfully creating a live-in landlord arrangement.

What is a live-in landlord?

A live-in landlord is someone who occupies the same property as their tenants. Typically, this involves renting out part of their house, a specific individual room or a self-contained unit within a larger home.

Live-in landlords often rent out a spare room or unused space to generate a second income. This is in contrast to private landlords who usually use renting as their primary source of income or make an investment. Live-in landlords can also benefit from the government’s Rent a Room Scheme. It allows people to earn £7,500 per year tax-free from letting our furnished accommodation in homes.

Steps to become a live-in landlord

Renting out a spare room might sound like a simple overnight process with few hurdles to overcome. However, it’s important to understand all legal requirements, rights and responsibilities to increase the chances of a smooth and successful tenancy period. There are several steps to take on your journey. 

If using your own home, there is no need to get permission, though it might be a good idea to inform your mortgage provider of your intention to rent out part of your property. It’s also worth double-checking the financial implications of receiving the additional income. For example, the extra income could tip you over into the next tax bracket, and it might take away your entitlement to certain benefits.

One of a live-in landlord’s responsibilities includes informing your insurance provider. The price may increase, but it is better to update the policy to be accurate. If policies are not accurate, insurance providers can invalidate the policy, and you won’t be able to make a successful claim when required.

Relevant UK legislation and safety standards for live-in landlords 

While live-in landlords face fewer legal obligations than traditional landlords, several boxes must be ticked to ensure they fulfil their responsibilities and keep the tenant safe. Hefty fines are in place should live-in landlords fail to fulfil legal obligations. Some of the most important examples are listed below.

Gas

Live-in landlords must comply with the Gas Safety (Installation and Use) Regulations 1998. All gas appliances in the property must be safe. Landlords must arrange annual gas safety checks by a Gas Safe registered engineer. These records should be kept safe if landlords need to prove they comply with the regulations. Our gas safety advice article provides more information.

Electrical safety

An EICR (Electrical Installation Condition Report) is not legally required for live-in landlords, but it is still recommended because they must make sure electrical installations and appliances are safe. 

Habitability

The Homes (Fitness for Human Habitation) Act 2018 applies to live-in landlords. This means that rented properties must be safe and habitable throughout a tenancy. This includes removing serious hazards like dampness, unsafe utilities, or structural issues.

Right to Rent checks

Conducting right-to-rent checks is a key step in screening tenants. Live-in landlords must verify a tenant’s legal eligibility to live in the country before signing any tenancy agreement. A live-in landlord tenancy agreement cannot be made if the tenant fails the right-to-rent check.

Fair treatment 

Under the Equality Act 2010, a person letting out a property, including live-in landlords, must not unlawfully discriminate based on race, gender, gender reassignment, disability, sexuality, age, marital status or religion.

Importance of a live-in landlord tenancy agreement

A well-structured and highly detailed live-in landlord tenancy agreement is imperative. It is a written document outlining all landlord and tenant responsibilities. A well-written live-in landlord tenancy agreement prevents disagreements by clarifying responsibilities and initial terms for both landlord and tenant.

It outlines the tenant’s dos and don’ts, the landlord’s commitments and mutual expectations. It serves as a go-to reference and rulebook, ensuring both parties have a clear guide to follow throughout the tenancy. If there are any disputes during the tenancy, the tenancy agreement will solve them. It will also reduce the chances of some live-in landlord problems, such as unpaid bills.

Items to include in a live-in landlord tenancy agreement 

A live-in landlord tenancy agreement needs to be very detailed. It can be tailored specifically to your situation as well. For example, you might have certain rules around pets. As a general guide, include at least the following items in the live-in landlord tenancy agreement:

• Names of the landlord and tenant(s)
• The rent price and how to pay
• Deposit amount
• Start and end dates of the tenancy
• Landlord responsibilities
• Tenant responsibilities
• Who will pay which bills?

Check out our full guide on how to write a tenancy agreement. 

Benefits for live-in-landlords v live-in landlord problems

There are distinct advantages, but also some live-in landlord problems that need to be considered when weighing up your options.

Benefits for live-in landlords

1. Extra income: Renting out a room or unit is a smart way for homeowners to offset mortgage costs or boost savings, especially in high-cost and/or high-demand areas like London.
2. Control: Living on-site lets live-in landlords keep a close eye on their property, reducing the risk of damage or neglect.
3. Flexibility: Live-in landlords can reclaim their space more easily than traditional tenants, ideal for those planning short-term rentals.
4. Social: Some live-in landlords enjoy the social aspect of sharing their home, especially if they live alone.

Live-in landlord problems

1. Privacy trade-offs: Both parties sacrifice some independence. Tenants might feel watched, while live-in landlords may struggle to relax in their own space.
2. Conflict risks: Disagreements over noise, cleanliness, or guests is a common live-in landlord problem, which can quickly escalate when you’re housemates.
3. Time commitment: Unlike traditional landlords who can delegate tasks, live-in landlords often handle everything themselves, from repairs to rent collection.
4. Legal grey areas: Missteps in compliance (e.g. skipping safety certificates) can lead to fines or disputes despite the lighter legal load.

Practical tips for solving and preventing live-in landlord problems

Numerous strategies and approaches are available to effectively address and navigate the various challenges that can arise from live-in landlord problems. Following the tips below can ensure a smoother and more harmonious living arrangement for both the landlord and the tenant.

Noise problems

The tenant could be playing loud music at night or being generally noisy. To prevent this, landlords should include noise rules in the live-in landlord tenancy agreement, and expectations can be discussed in advance. If the tenant is breaching the agreement, a further conversation can be had where the tenancy agreement is revised. 

Privacy clashes

Privacy clashes are a common issue for live-in landlords, where tenants may feel micromanaged, and landlords might feel encroached upon. To prevent this, you can clearly define personal versus shared spaces. You could create rules like knocking before entering a tenant’s room to maintain a balanced and respectful living environment.

Lifestyle differences

Lifestyle differences can challenge live-in landlords, such as when one party is an early riser and the other a night owl. To prevent this problem, live-in landlords should include questions about this during a thorough tenant screening process. This will generate a more compatible and relaxed coexistence within the shared living space.

It’s also worth seeking professional advice where needed. This can help, especially when it comes to complex legal disputes. 

After learning more about being a live-in landlord, you’ll hopefully feel more optimistic about the potential for a second income. Yet, unexpected challenges like disputes or damages can arise with tenants. That’s why safeguarding your property and peace of mind with landlord insurance is key. For tailored quotes, call us at 01788 818 670 or get a quote online today!