I own a B+B .. can I rent out each room yearly to tenants?

dancarter8

Hi,
I own a B+B .. six bedroom with all rooms ensuite. 
I don't live in the B+B anymore and am looking at renting out each bedroom with ensuite to tenants (paying monthly rents).
Is this legal? Is there any regulations stopping me doing this? The house currently has planning permission as a B+B.
The house is currently setup for fire regs for B+B (smoke detectors, fire extinguishers, fire doors).
Thanks .. any info appreciated.

Gumbo

Can't see any reason why not. It's just like having bookings every night of the year. Obviously further tax liabilities though.thats the simplistic answer.

The other is your planning permission. B&B by its nature is a short stay venture and usually with the owner living there. If you turn it into what you describe, some could argue it's shared accommodation and thus a different purpose group.

4ensic15

Is it going to be self-catering? Are the tenants going to be per room or the entire?

Sounds like a fairly normal rooms let seperately houseshare which is perfectly fine to operate and many would say a much safer bet than renting a full house.

Gumbo

Luke Incalculable Meatloaf wrote: »

Sounds like a fairly normal rooms let seperately houseshare which is perfectly fine to operate and many would say a much safer bet than renting a full house.

OP may have to convert back to residential for that, no?

Mrs OBumble

Will the tenants have access to a shared kitchen, living room and laundry? If not then it won't be attractive for for them.

And if so then it would be just a normal house share. Its not at all clear whether tenants in that situation get part IV rights, if they do then the notice period becomes way more than one month after they've been there for six months.

4ensic15

Luke Incalculable Meatloaf wrote: »

Sounds like a fairly normal rooms let seperately houseshare which is perfectly fine to operate and many would say a much safer bet than renting a full house.

There isn't enough information given by the o/p to deduce that.

dancarter8

Hi,

Thanks for the replys.

Yes - tenants would have access to common kitchen, living room, laundry etc

Or we could add small kitchenettes to each of the rooms and still have shared kitchen available aswell.

Each room would be rented out to separate tenants.

With regards tenants .. would I have to register them? Would it be the same rules regarding tennants as regular rented apartments or just like long term b+b stays?

It would be self catering or we could have a Tennant manage the building providing some form of breakfast in the mornings.

Regarding tax implications - how would it differ compared to income from b+b?

Thanks

newacc2015

IMO I would do license agreements. I would arrange license agreements, offer short term licenses ie less than 6 months. Have a weekly cleaner to make it a bona fide license agreement ie no exclusive use. Plus you will need a weekly cleaning, as tenants in shared properties rarely clean up like a group.

Licenses versus tenancy, has many benefits:

1) You might not fall foul to the local council, as you are still offering guest arrangements ie these people are guests of the property and not tenants. Although I am not 100% sure on this

2) You dont have to worry about non-payment of rent, as non-paying guests can be evicted rapidly

3) You won't be covered by the rent caps etc as you are not offering tenancies

4) If you want the property back as a B&B, you dont have to worry about giving massive long notices

5) You don't have to register with the RTB

I suggest speaking to a tax advisor about tax implications and a solictor to ensure you have a bona fide license arrangement

kceire

kceire wrote: »

OP may have to convert back to residential for that, no?

I'd imagine it won't be an issue, the only reason there are complaints about the planning is to stop people doing short term let's for noise etc. Who is going to complain about a B&B doing a longer term let. Does the planning even disallow longer term lets? B&Bs often have long term tenants, I know in Galway the B&Bs around Yates college (a grind school) have students there for the full school term and openly advertise this.

Ayuntamiento

Essentially it will be like a really big house-share. It might be a bit of a stretch expecting 6 people to share one set of kitchen/laundry facilities? And that's 6 people at a minimum as you might end up renting a few bedrooms to couples or else single people will have partners staying over the odd night too.

4ensic15

dancarter8 wrote: »

Hi,

Thanks for the replys.

Yes - tenants would have access to common kitchen, living room, laundry etc

Or we could add small kitchenettes to each of the rooms and still have shared kitchen available aswell.

Each room would be rented out to separate tenants.

With regards tenants .. would I have to register them? Would it be the same rules regarding tennants as regular rented apartments or just like long term b+b stays?

It would be self catering or we could have a Tennant manage the building providing some form of breakfast in the mornings.

Regarding tax implications - how would it differ compared to income from b+b?

Thanks

Kitchenettes would require planning permission as you would be creating bedsits. Planning would not be given for dwellings of less that 40 Sq m. Separate lettings, could, in theory, be banned as you would not be complying with the Housing (Standards for Rented Houses) Regulations 2017. The RTB would regard the entire as being one letting and require registration of the whole as one. Licences would be investigated to see if they were in fact licences and many landlords have come a cropper.

the_syco

Rent the rooms, and not to 1st years. Two reasons; the first being away from parents, some places will become party central, and will probably not care about your house. Second being that 1st years drop out, meaning that you'll have be down rent money.

Although renting the rooms will mean you're down cash if someone leaves, it means that you may** be able to get rid of them easier if they start acting the maggot, and/or stop paying rent.

**Check with your solicitor if renting the rooms gives you more rights or not, as you're not living there, and as they'll have full access of the common areas.

Moonbeam

it would come over the rent a room scheme for tax purposes so it could be an advantage.

4ensic15

Moonbeam wrote: »

it would come over the rent a room scheme for tax purposes so it could be an advantage.

The o/p wouldn't be living there, so it would have nothing to do with the rent a room scheme.

punisher5112

4ensic15 wrote: »

The o/p wouldn't be living there, so it would have nothing to do with the rent a room scheme.

It would if they kept a room and stayed there for a day or so a week.

Sleeper12

dancarter8 wrote:

Or we could add small kitchenettes to each of the rooms and still have shared kitchen available aswell.

I think you'll need planning permission for this & it may breach fire regulations

Sleeper12

4ensic15 wrote:

The o/p wouldn't be living there, so it would have nothing to do with the rent a room scheme.

Also the income would be well over 14k per year so wouldn't qualify even if op lives there

punisher5112

Leave kitchen as is and maybe consider setting up a laundry room/shed outside of the house and leave enough space for to dry some clothes also.

the_syco

Sleeper12 wrote: »

Also the income would be well over 14k per year so wouldn't qualify even if op lives there

Although it's 12k per student, it'd need to be the OP's PPR.

Mrs OBumble

the_syco wrote: »

Although it's 12k per student, it'd need to be the OP's PPR.

It's 14k for the house to qualify for the rent a room tax break.

But it's irrelevant, because the OP is already well used to not having that tax break from operating as a BnB.

4ensic15

punisher5112 wrote: »

It would if they kept a room and stayed there for a day or so a week.

It has to be the o/ps ordinary residence. Keeping a room and staying one day a week does not make it his ordinary residence. He would also lose the income from that room if he was to do it.

punisher5112

4ensic15 wrote: »

It has to be the o/ps ordinary residence. Keeping a room and staying one day a week does not make it his ordinary residence. He would also lose the income from that room if he was to do it.

Better to keep full access to the house or else status would change and they would be under normal rental rules and tax.

If they were to keep access and stay there then rent a room could work.

I can stay wherever I want within reason and don't have to stay at any one address so can't see where that would be able to be used against them.

davindub

punisher5112 wrote: »

Better to keep full access to the house or else status would change and they would be under normal rental rules and tax.

If they were to keep access and stay there then rent a room could work.

I can stay wherever I want within reason and don't have to stay at any one address so can't see where that would be able to be used against them.

Ever had a tax audit?

Mrs OBumble

4ensic15 wrote: »

It has to be the o/ps ordinary residence. Keeping a room and staying one day a week does not make it his ordinary residence. He would also lose the income from that room if he was to do it.

Ordinary residence is only needed for rent a room relief which the OP isn't going for.

Any residence is needed for proving non exclusive use, which would be good for the OP to have.

4ensic15

punisher5112 wrote: »

Better to keep full access to the house or else status would change and they would be under normal rental rules and tax.

If they were to keep access and stay there then rent a room could work.

I can stay wherever I want within reason and don't have to stay at any one address so can't see where that would be able to be used against them.

The rent a room is a tax scheme. 5 rooms would put the o/p over the limit of 14K pa besides the fact that if the o/p has another place to live that would no longer be his PPR with possible tax consequences.
As for keeping a room to avoid creating a tenancy the RTB have ruled that a bedroom can be a dwelling and the occupants of individual bedrooms can acquire rights. This keeping a room debate occurs frequently on this site. I have yet to see an example of someone succeeding at the RTB based on it.

4ensic15

4ensic15 wrote: »

The rent a room is a tax scheme. 5 rooms would put the o/p over the limit of 14K pa besides the fact that if the o/p has another place to live that would no longer be his PPR with possible tax consequences.
As for keeping a room to avoid creating a tenancy the RTB have ruled that a bedroom can be a dwelling and the occupants of individual bedrooms can acquire rights. This keeping a room debate occurs frequently on this site. I have yet to see an example of someone succeeding at the RTB based on it.

Becuse most people accept it's the case and don't bring a case to the RTB, the RTB have no power over licensees so why would a licensee try to bring a case to the RTB.

A room can't be considered a dwelling, if a Ll keeps a room and uses it on a reasonably regular basis the RTB have absolutely no power or say whatsoever in it.

In a rooms let seperately house share it may not even be necessary to keep a room to make the people there licensees as one of the key stipulations to make a person a tenant is having exclusive access and in a rooms let seperately house share you have a number of totally unconnected people sharing common areas so none have exclusive use which very much opens up the question of how they can be considered tenants. The RTB have even ruled this is the case in the past.

4ensic15

Luke Incalculable Meatloaf wrote: »

Becuse most people accept it's the case and don't bring a case to the RTB, the RTB have no power over licensees so why would a licensee try to bring a case to the RTB.

A room can't be considered a dwelling, if a Ll keeps a room and uses it on a reasonably regular basis the RTB have absolutely no power or say whatsoever in it.

In a rooms let seperately house share it may not even be necessary to keep a room to make the people there licensees as one of the key stipulations to make a person a tenant is having exclusive access and in a rooms let seperately house share you have a number of totally unconnected people sharing common areas so none have exclusive use which very much opens up the question of how they can be considered tenants. The RTB have even ruled this is the case in the past.

The RTB have decided a room can be a dwelling as you well know.

dancarter8

Thanks .. again for all the replys.

If the rooms are rented out on a nightly cost just like the b+b (monthly bedroom cost /30) - with the renter expected to stay long term. Would that work for not having to register long term tennants?

Also do I really need to keep a room in the house for myself?

Thanks

4ensic15

dancarter8 wrote: »

Thanks .. again for all the replys.

If the rooms are rented out on a nightly cost just like the b+b (monthly bedroom cost /30) - with the renter expected to stay long term. Would that work for not having to register long term tennants?

Also do I really need to keep a room in the house for myself?

Thanks

The RTB look at how things work rather than the form. They are tenant biased.
keeping a room is no cure all. The fact that the rent is expressed as being by the day doesn't cut much mustard if the reality is that the tenant is expected to stay long term. You are unlikely to be collecting rent by the day. If there is self-catering, it looks like, and may be found to be, standard letting.

athtrasna

Mod note

OP you started out this thread with what appeared to be a genuine question but now you're looking at ways to try to avoid legal responsibilities. We cannot condone that. Thread will be closed if it continues to go down that path.