Many rented properties are shared. There are three main ways of dealing with this which are set out below.
HMOs (Houses in Multuple Occupation) are a bit different as they are created automatically depending on the number of people living in a property and whether they form one or more ‘households’.
See brief details below and links to some of our content.
Probably the most popular method of dealing with shared properties is to rent the property to several people as 'joint tenants' where they all sign the tenancy agreement.
Under this arrangement, they all have 'joint and several liability' which means that they are all (separately and together) liable for all obligations under the rent.
So a landlord can, if he wants to sue for, say, the rent, can sue all of the tenants or just one of them if he wishes. Even if that one tenant has paid their 'share'. So in effect, all the tenants are guarantors for the other tenants.
This type of letting is used for families and couples and can also be used for other people sharing - for example, friends or students sharing a house or flat.
However, if can be problematic if tenants want to vacate at different times.
This is the other main way of dealing with shared properties. Instead of all the occupiers signing the one agreement, they each have their own individual agreement for their own room, with shared use of the rent of the property in common with the other tenants.
This is the best way to deal with shared properties where the tenants are likely to want to leave at different times as it is easier to deal with the paperwork.
Note that you will need to use a special type of tenancy agreement designed for this situation (which is available on Landlord Law with our tenancy agreements).
Landlords will not normally agree to subletting by their tenants, unless they have specifically entered into a 'rent to rent' arrangement (which is inadvisable unless you know what you are doing or can trust the tenant).
Allowing a tenant to take in a lodger is sometimes permitted but landlords need to be careful to avoid inadvertently creating an HMO. You also need to be careful not to breach the terms of your mortgage or insurance policy.
Whether a property is an HMO or not will depend on the number of occupiers living in the property and whether or not they form one 'household' (which basically equates to 'family').
So a property will be an HMO if the occupiers consist of at least three people who are not from ‘one household’ and who share facilities within the house such as the kitchen and bathroom. HMOs are subject to stricter safety conditions and sometimes require a license which can be obtained from the local council.
If a license is required, it is important to obtain it before renting out an HMO, as, without one, penalties apply and tenants may be able to claim a rent repayment order. The rules regarding licensing are slightly different in Wales.
We have a lot of content and FAQ on HMOs on Landlord Law including: