Permitted occupiers – pros and cons for landlords and tenants

You might have heard the term ‘permitted occupier’ used in relation to tenancy agreements. But what does it mean, and how is a permitted occupier different from a tenant? The permitted occupier designation can be useful to both landlords and tenants in certain circumstances, but there are some pitfalls that you should be aware of.

What is a permitted occupier?

A permitted occupier is someone who is allowed to live at a property with a tenant (and is named as such on the tenancy agreement) but is not a tenant themselves. You can’t have a permitted occupier without a proper tenant.

A permitted occupier is not bound by a tenant’s responsibilities (paying rent, for example, or looking after the place) but they also don’t have a tenant’s rights. Significantly, if the main tenant ends their tenancy, the permitted occupier has no right to continue occupying the property.

Pros of having permitted occupiers

Often there may be people living at a property for whom a full set of tenants’ rights and responsibilities are not really appropriate. In the case of a family with children at university, for example, the students may live at the property during the holidays but it would be unfair and unnecessary to make them officially liable for paying the rent all year round.

Likewise, there may be occasions where one tenant is supporting another by paying most or all of the rent. This is often the case for couples who have different levels of income, but the problem for landlords can come if the couple splits up and the main breadwinner moves out at the end of the tenancy. The remaining tenant may not be able to meet the rent, but it could be a long battle to regain possession if they refuse to move out. Designating the second person a permitted occupier rather than a tenant could give the landlord greater peace of mind in these circumstances, since the lower-earning tenant has no right to continue living in the property without the main earner.

This arrangement can be practical from a tenant’s point of view too. If one tenant can afford the full rent for a nice place, but their partner fails reference checks for the same property because they can’t afford half the rent (despite the fact they’re not going to be the one paying it), it’s pretty unreasonable for them to get turned down as a result – or for the landlord to ask them to pay large chunks of rent up-front. By making the lower earner a permitted occupier, tenants like these can reassure potential landlords that they’re not going to be left in the situation above, and can bring better properties within their reach.

It’s worth being clear that making someone a permitted occupier doesn’t mean they can get into arrears, trash the property or flout any other conditions of the tenancy agreement. Everything in the contract still applies, but it’s just the tenant’s responsibility to make sure it happens.

Cons of permitted occupiers

One of the big cons of allowing permitted occupiers from a landlord’s point of view is that they can end up with someone living at the property who can’t possibly pay the rent. The tenancy may have ended and the main tenant may have moved out but the permitted occupier might refuse to leave the property. They don’t technically have any right to be there (and the tenant hasn’t actually given the landlord vacant possession) – but equally if the permitted occupier really won’t go then the landlord can find themselves wading through a legal quagmire as they try to regain possession.

A tenant will also need to think carefully before moving into a property with a permitted occupier. They may be good friends, partners or family, but ultimately the tenant will be entirely responsible for holding up their end of the tenancy agreement, even if relations with the permitted occupier deteriorate. In the situation above, for example, the landlord might try and go after the tenant for any rent arrears accrued by a permitted occupier who has stayed on beyond the end of the tenancy – even if the actual tenant has moved out.

Of course, permitted occupiers themselves are also uniquely vulnerable. If anything happens to the main tenant, they can find themselves quickly homeless with very little of the statutory protection that’s available to full tenants.

A word of warning

There’s a reason most council taxes, licensing schemes and occupancy rules are based on the number of people actually living in a property, rather than the number of tenants. If you live in a property with two permitted occupiers, you can’t start claiming a single person’s council tax discount, and if you’re a landlord with an HMO licensed for five people, you can’t have five tenants and three permitted occupiers living there. A room that is too small for a tenant is also too small for a permitted occupier.

There are a variety of instances in which it can be practical to designate someone a permitted occupier rather than a tenant. It can be a useful compromise that can benefit both landlords and tenants, but what it is not is a way to fiddle the system.

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