Excluded licence vs assured shorthold tenancy — the key legal distinction
A resident landlord (one who lives in the same property as the lodger) creates an excluded licence — not an AST. The excluded licence means: no TDP scheme registration required for the deposit; no prescribed information to serve; no Section 21 or Section 8 notice required; and the lodger has no right to challenge rent at the First-tier Tribunal. The resident landlord must actually be living in the property — moving out loses the resident landlord status.
Deposit protection — not required for excluded lodger licences
A lodger deposit does not need to be held in a government-approved TDP scheme. The £5,000 penalty and prescribed information obligations apply only to AST deposits. Best practice: give the lodger a signed deposit receipt, include deduction conditions in the lodger agreement, and use a room condition report on check-in. Disputes are resolved in the small claims court — there is no scheme adjudication.
Ending the lodger arrangement — Notice to Quit and eviction
To end the arrangement, serve a written Notice to Quit giving reasonable notice (typically one rent period — 28 days for monthly). Do not use Section 21 or Section 8. If the lodger refuses to leave after the notice period expires, apply to the County Court for a possession order — the landlord cannot physically remove the lodger without a court order, even for an excluded licence.
Right to Rent, rent-a-room relief, and HMO threshold
Right to Rent checks (IA 2014 s.22) are required in England for all residential occupiers including lodgers — check documents before the lodger takes occupation. Rent-a-Room relief allows up to £7,500 per year tax-free from lodger income (£3,750 each for jointly-owned property). HMO threshold: if a resident landlord, their household, and 2 or more lodgers occupy a property with 5 or more occupiers in 2 or more households, mandatory HMO licensing may apply.