Generally, when you rent out a property, there is more than one person living in it. Often it will be a family or couple. However, frequently it will be to a group of people, who are not family, sharing.

There are a number of specific legal issues which this situation throws up which I am going to be looking at in this chapter.

Then, if you want to find out more about the legal issues, I suggest you check out the resources at the end.

Shared houses and flats

There are four main ways that people can share a rented property (similar rules apply in Wales, albeit with the Welsh terminology):

• First, where they all sign the tenancy agreement as’ joint tenants’
• Secondly, where a landlord rents out rooms on an individual basis.  Here, the tenants will have a separate tenancy agreement for their own room and will share the rest of the property with the other tenants
• Third, where one or more people are living there as guests or lodgers of the tenant. I am not going to be talking about lodgers here, but you can find a huge amount of information on my special free website, Lodger Landlord.
• Fourth, in a family situation, it is not unusual for just one or two people (say just the father or the parents) to be the tenant, but for the rest of the family (partner, children, perhaps other relatives such as a grandparent, and maybe also a nanny or live-in nurse) to live in the property as ‘permitted occupiers’.
• Finally, where there is what I generally refer to as ‘disorganised comings and goings’.  Something to be avoided!

I am mostly going to be talking about the first two situations in this article.

Joint tenants

This is where two or more people sign the tenancy together. This is the most popular method of renting to sharers.

• It is popular with the landlord as all the tenants have what is called ‘joint and several liability’.
• It is also popular with many tenants as they get to choose who they share with

What is joint and several liability?

This means that all the tenants are, collectively ‘the tenant’ and are liable, individually and jointly, for everything.

For example, four tenants may have agreed to pay £100 each of a rent of £400 per month. However, the landlord can sue all of them or just one of them for the whole £400 if they fail to pay. If damage is done to the property, the landlord can sue any of the tenants for compensation, not just the tenant who did the damage.

This type of let is particularly popular with students, who will often club together and share a rented house or flat for the academic year.

Problems with ending a joint and several tenancy

Where there can be problems with this type of let is with ending the agreement for just one of the joint tenants. Basically, it is not possible.

So, if the tenants come to you complaining about one of the tenants who is behaving in an anti-social manner, you cannot just evict that tenant. You can only evict all of them together.

There are also problems if one of the tenants wants to leave and the others want to stay. If this is during the fixed term then probably the best option is for the tenants to find a lodger to take his place and then if the lodger proves satisfactory, they can be signed up as a proper tenant at renewal.

They will need your permission for this, but if it is to help pay your rent, then normally you will be happy to agree to this (assuming it does not throw up any HMO issues – see later on this, and provided it will not breach the terms of your mortgage or insurance policy).

After the fixed term has ended (in England), one of the joint tenants can give notice to quit which will end the tenancy for everyone. In this situation, the remaining tenants will need to find a replacement tenant, and you should then get them to sign a new tenancy agreement with you if they want to stay.

The rules are slightly different in Wales where it is easier for tenants in this situation.

More information about ‘changing tenants’ is available in my Changing Tenants Kit, which is available to all Landlord Law members as part of their membership or can be purchased separatly.

Renting a room in a shared house

If you are renting to individual people who will want to come and go at different times, it is generally more convenient to let property on a room-by-room basis.

This is generally more work for the landlord; for example, it involves more paperwork. However, the good news is that you can generally earn more per property if you let it out on a room-by-room basis than you can if you let it out as a whole unit.

Finally, note that you must have a tenancy agreement type which is suitable for this type of let. Suitable tenancy agreements are available to all members of my Landlord Law service as part of their membership entitlement.

Disorganised comings and goings

This is where landlords lose control of their property and tenants are allowed to choose their replacement.  The replacement will then pay the outgoing occupiers’ share of the deposit to them.

This situation should never be allowed to happen:

• It is likely that no ‘right to rent’ check will be carried out. As of 13 February 2024, the fines for non compliance with the rules will start at £10,000 so this could prove to be an extremely expensive mistake
• Under the 2021 case of Sturgiss & Anor v Boddy & Ors  a landlord who had allowed this situation to develop was found liable for breach of the deposit regulations, as the Judge held that the occupiers had a tenancy
• If the landlord ever wishes to evict the occupiers he will not know the names of the tenants or the details of their tenancy

So make sure that you are always in control over who is living in the property and who the tenants are.

Houses in Multiple Occupation

When people live together in the same building where they are not family, there are often problems.

For example, often this type of accommodation is low quality and the tenants will be people living on the edge of society. Although there are many, many landlords who provide superb facilities for their tenants in shared properties which are in tip top condition, the worst housing is generally of this type.

For this reason, this type of property, known as ‘houses in multiple occupation’ or HMOs, is treated differently and there are additional regulations which apply to them.

There is a very long definition of an HMO in the Housing Act 2004, but basically it is where three or more people who are not family or related to each other (ie form one ‘household’, which can include resident staff such as carers), share living accommodation.

In these situations, the following additional regulations apply:

Management regulations which impose additional obligations on landlords as regards keeping the property in a safe condition and as regards dealing with rubbish. These regulations apply to ALL HMOs whether or not they are licensed.

Amenity standards which set out basic facilities which must be provided in HMOs. For example as regards room size, kitchen and washing facilities.

Licensing – Landlords of some HMOs, but not all, will need to obtain a license from their local authority. All properties with five or more unrelated tenants (i.e. five or more occupiers forming two or more ‘households’) will be subject to mandatory licensing.  In Wales there is an additional requirement that the property have three or more storeys.

One of the problems about writing about HMOs is that the requirements vary across the country. There are the basic legal requirements, but many local authorities have additional licensing requirements for HMO landlords in their area.  And sometimes for properties which are not HMOs at all (this is known as ‘selective licensing).

Therefore, if you are considering renting a property to three or more tenants (or even in non-sharing situations), you should speak to the Housing Officer at your Local Authority before doing anything, to find out what the requirements are in your area.

For example, you may find that the licensing fees, and any conditions imposed by the Council as a condition of granting a license, will render your HMO financially unviable.

Other HMO issues

I have been discussing here the HMO rules which apply to HMOs as defined in s254 onwards in the Housing Act 2004.  However, there are other definitions of HMOs to which different rules apply or which are for different situations:

• There is a separate HMO definition at s257 of the Housing Act which applies to certain flats which has different licensing requirements.  Flats that do not fall into this definition will not normally require licensing at all if they are HMOs unless the Local Authority has an additional or selective licensing scheme.
• For council tax purposes, there is a completely different definition of HMO under the finance regulations.  It is important not to confuse this with the Housing Act definitions when speaking to Council officers!
• Finally, there is a different HMO definition for planning purposes.

Enforcement and penalties

Local Authorities are becoming increasingly more active in enforcing the HMO rules.  You could be faced with any of the following if you fail to comply with Local Authority requests:

• A penalty charge notice which can be for up to £30,000 per offence (so if you breach several of the management rules, this could prove very expensive)
• A prosecution in the Magistrates Courts where fines are now unlimited
• Both Local Authorities (where payment is via some form of benefit) or tenants where they pay the rent, can apply to the First Tier Tribunal for a Rent Repayment Order  for up to 12 months rent – this can be VERY expensive
• Where the landlord has a housing-related criminal conviction, Local Authorities can also apply to the First Tier Tribunal for a banning order

So, if there is any chance that your property is an HMO, it is really important that you are aware of all the rules and take care to comply with them.

That is all I am going to say here about shared properties and HMOs. 

However, if you think your property could be an HMO, you should do further research and, ideally, take professional training.  Or employ for a professional HMO Manager.