The accidental landlord: the potential risks to landlords of tenants working from home

As tenants get the right to run a business at their rented accommodation, our accidental landlord is set to ban firework salesmen and child minders.

Since a tenant threatened to sue me for loss of income because the wifi I had provided kept crashing, I have been conscious of the potential risk to landlords of tenants running a business from home.

Of course, I told this particular tenant not to be so ridiculous, the wifi was intended for domestic use only and if he wanted a better connection he had better sort it out himself.

I also pointed out that he was forbidden under the terms of his tenancy agreement to work from the flat. I certainly wasn't aware he was intending to do so when he moved in.

I am sure there are thousands of tenants who work from their kitchen tables and I would have turned a blind eye to this guy running his business from home, but when he threatened to sue I was grateful to have a clause in the contract that made it clear the property was for residential purposes only.

However, the Government is now planning to change the law to give new tenants an automatic right to work from their rented accommodation. From next spring, landlords won't be able to prevent tenants starting up a business at home, other than in "exceptional circumstances".

It hasn't specified what those exceptional circumstances might be, but I would hope that landlords would be able to refuse permission for, say, a self-employed pyrotechnics salesman to keep fireworks in the living room.

Even if a tenant only intends to do clerical work from home, I would suggest landlords take steps to protect themselves, including making it clear that any pre-installed phone lines and internet are not intended for business use.

Landlords should also make sure that these services are transferred to the tenant's name, so if it transpires that they are running an illegal online business the landlord won't be held responsible. Also, landlords should not include the energy bills in the rent, as anyone working from home is likely to keep the heating on all day. I once ended up with a gas bill four times bigger than I was expecting when tenants left the heating on 24/7 through the winter.

Landlords will also have to inform their insurance company if the tenant is working from home, and should probably insert a clause in the tenancy agreement stating that they cannot be held liable if for any reason the tenant can no longer carry out their business from the premises.

Apparently, the Government will have a model tenancy agreement available online from next month, which landlords will be able to download, but the powers that be haven't said yet whether this will protect landlords from being sued for loss of income. If a property is leasehold, landlords will need to check that the freeholder doesn't prohibit the property from being used partly for business purposes. Often the head lease prevents leaseholders from any commercial activity on the premises.

A Department for Business spokesman told me the wording of existing long-term leases will not have to be changed until the leases are renewed. However, they also said it is the Government's hope that freeholders will not withhold permission for tenants to work from home. I think quite a few will.

Landlords need to think about the possible additional wear and tear on their properties, too. It's one thing to have someone working on their laptop, but what about a child minder bringing several destructive toddlers into the home? Or a freelance hairdresser colouring and bleaching on the premises? I expect this change to the law, while good news for some, will make landlords choosier about their tenants in the future — and many might avoid letting their property altogether to any budding entrepreneurs out there.

Victoria Whitlock lets three properties in south London. To contact Victoria with your ideas and views, tweet @vicwhitlock.

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