Hi,

Before I start my question, I’d like to say sorry for my not perfect english writing. Hope you will understand what I am trying to say and could give me an advice! Thanks!

My situation is as follow – about 2 years ago I’ve bought the house. Monthly mortgage payment and bills were quite high, much over £1000 and I have decided to take 2 lodgers to help myself paying the bills. I have lodgers for about a year now. I live in the property as well. But I have heard from somewhere (not very sure from where) that lodgers who live in the property for a long time have rights to claim part of the property value later and could become like co-owners of the property. Of course I would not like this to happen. As well I heard that there is an agreement which my lodgers could sign with me to say, that they will not claim any part of my property. Could you please help me to find out what agreement is it, and how it has to be sign, do I need to involve solicitor for this?

Thank you!
Ilona.

Ilona,

I have never heard the first rumour in your post about lodgers having any right to claim any part of the property value, no matter how long they have lived in your house. This could possibly only take effect if they were claimed that they were a live-in partner.

You should always have an agreement to cover yourself against any problems that could crop up, in your case you need an agreement called "House share agreement - resident landlord" which you can either google for (can be got for free) or buy one at a large Stationer like WH Smith (I think a company called Lawpack produce them) then just fill in the names, dates and rent paid.

Always keep records of rent paid and any expenses, you are allowed £4,250 Rent a Room income Tax Free, Anything over this amount is taxable at your own income tax rate and should be reported to HMRC.

You should not need a solicitor for this agreement, but if your mortgage company were to become aware of you renting to lodgers they would then require one of their own forms to be signed by any co-habitants (lodgers, spouse or anyone over age of 18 not currently named on mortgage paperwork)

Thanks for your quick respond. You made it quite clear for me now. I'll try to download the agreement you mentioned above as soon as i can. I don't think i will go over £4250 a year on my rent income.....have not checked it yet. As far as i know, my mortgage company (C&G) let the borrowers to have up to 2 lodgers. But will contact them anyway to make sure i do everything right to avoid future problems