Q. My tenants are a family of four (parents and two children) and are finding it hard to pay their rent. They have asked if they could rent out their spare bedroom to a lodger. I would like to agree but suspect that this is not as straightforward as they may think. Should I agree?

A. There are a number of things to take into account and you are wise to take advice before agreeing to anything. The most important thing to consider is the HMO implications.

If a property is let to three or more people forming two or more households then it will be deemed to be a House in Multiple Occupation (HMO) and subject to the HMO management regulations. If there are five or more occupiers forming two or more households, then it will be subject to mandatory licensing, meaning that you will need to obtain an HMO license from the local authority.

A ‘household’ consists of family members (including grandparents, siblings, cousins, etc.) plus any employees, such as nannies, carers and au pairs, who live in the property as part of their work.

At the moment, the property is not an HMO as all occupiers are part of the same family. If they were to rent a room to another family member, such as a niece, then they would be deemed part of the same household, and the HMO rules would not apply. However, renting to a non-family member would both make the property subject to the management regulations and bring the mandatory HMO licensing rules into force.