Licence to Occupy a Room in the Landlord’s Home
This licence to occupy a room in the landlord's home should be used where a landlord is taking in a lodger. It has been updated to comply with the Tenant Fees Act 2019 (the "TFA"), which affects landlords in England.
What this licence covers
The licence gives the lodger use of a bedroom and rights to use other parts of the house or flat, such as the kitchen, bathroom, corridors and staircase, and optionally the living room.
The lodger pays a monthly Licence Fee, which is stated to be inclusive of Council Tax. In addition to the Licence Fee, the lodger must also pay a fair proportion of the utility bills, as a separate payment.
The rules on use of the room are set out at clause 2.4, and the licence includes additional licensee covenants on fire safety.
Permitted payments under the Tenant Fees Act 2019
Under the TFA, landlords in England must only charge "permitted payments" as defined by the TFA, or they face financial penalties, and subsequent offences could result in a criminal offence. Permitted payments include rent, the tenancy deposit, council tax, utilities, the TV licence and default fees for late payment of rent and for replacing a lost key or security device, where required under a tenancy agreement.
The cost of cleaning shared areas of the house can only be charged if it is included in the Licence Fee. If the lodger wants their own room cleaned, this should be arranged and paid for separately.
Landlords cannot require a licensee to pay for a professional clean at the end of the licence, since this is a prohibited payment under the TFA. Landlords can, however, require licensees to clean to a professional standard.
Landlords can only charge interest on a late payment once the Licence Fee is more than 14 days overdue, and the interest rate must not exceed 3% above the Bank of England's base rate.
Licence period and ending the licence early
The licence runs for a fixed term, the Licence Period, but either party can bring it to an end early by giving notice as set out in clause 4.
Landlords might prefer to keep the Licence Period fairly short, for example a few months, and then renew the licence if the arrangement is working well. The other option is a longer Licence Period, with the licence terminated if circumstances change.
Deposits and the Tenant Fees Act
This licence does not provide for the lodger to pay a deposit. If the landlord does take a deposit, it does not need to be protected in a Tenancy Deposit Scheme.
Since 1 May 2026, when the Renters' Rights Act 2025 came into force in England, use of a Tenancy Deposit Scheme is compulsory only for deposits taken from assured tenants, as the assured shorthold tenancy category has ended. A lodger under this licence holds a licence, not a tenancy, so is not an assured tenant, meaning this requirement does not apply in any event.
The landlord may still prefer to use a Tenancy Deposit Scheme as a matter of good practice. The security deposit must not exceed the caps set by the TFA.
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