Picture a homeowner with a spare room, taking in a lodger to help with the mortgage, sharing the kitchen and the bathroom, and wanting a document that sets expectations without turning the arrangement into a tenancy. A lodger licence is that document. It gives someone a licence to live in a room inside a property where the owner or main tenant also lives, without giving them exclusive possession of any part of it. That distinction, exclusive possession, is what usually keeps the arrangement a licence rather than a tenancy, and together with sharing the home with a householder who lives there, it changes almost everything that follows.
This guide sets out the difference between a lodger and a tenant, what a well-drafted licence needs to include, and how to draft one from a fixed clause library and take it through to signature. It is general information, not legal advice.
Who this matters most to
Homeowners letting a spare room, and anyone renting a room in a shared house where the landlord also lives there, both need to get this document right. The reason it matters is that calling someone a "lodger" does not automatically make them one. What actually decides the legal category is whether the householder lives in the property and whether the lodger has exclusive possession of any part of it. Get that wrong on paper and you may have created a tenancy without meaning to, with all the extra protection that brings for the occupier and all the extra obligation it brings for you.
Lodger versus tenant: the real dividing line
| Feature | Lodger (excluded occupier) | Tenant |
|---|---|---|
| Householder lives in the property | Yes, sharing living accommodation | Not necessarily |
| Exclusive possession of the room | No | Usually yes |
| Ending the arrangement | Reasonable notice, no court order needed in most cases | Formal notice and, if contested, a court possession order |
| Deposit protection scheme | Not required | Legally required within 30 days |
| Written statement of terms | Not a statutory requirement | Required before an assured tenancy is entered into |
| Rent Act or Housing Act protection | None | Statutory protection applies |
The dividing line is exclusive possession. A tenant, even a periodic one, has the right to exclude everyone, including the landlord, from the property they rent, at least without notice. A lodger does not have that right over their room. The householder can enter it, can move the lodger to a different room in some arrangements, and shares the rest of the property, kitchen, bathroom, living room, with the lodger as a matter of course. Because the lodger never has exclusive possession, the arrangement is usually a licence, not a tenancy. What makes the lodger an excluded occupier is a separate test, in section 3A of the Protection from Eviction Act 1977: they share accommodation, such as the kitchen or bathroom, with a householder who lives there as their only or main home, both when the licence starts and when it ends.
This matters enormously for how the arrangement ends. An excluded occupier does not benefit from the Housing Act protections that apply to tenants, and in most cases the householder does not need a court order to ask them to leave. What the householder does still need is to give reasonable notice. There is no fixed statutory notice period for an excluded licence, so the licence should state one that both sides accept as reasonable. Where it is silent, reasonable notice is judged on the facts; a period at least as long as the rent period is a common rule of thumb, not a statutory rule. Check the current guidance if a specific case looks disputed.
What a lodger licence should include
Set out clearly who lives in the property already, and confirm that the householder occupies it as their main home, since that resident-landlord status is what keeps the arrangement a licence. Describe the room the lodger occupies and the shared spaces they can use, and be explicit that the householder retains a key and can access the room, since implying otherwise risks looking like exclusive possession on paper even if the reality is different.
Cover the practical terms plainly: the licence fee and when it is due, which services and bills are included, and any house rules that matter to daily life together, guests, noise after a certain time, smoking, pets. None of these are legal requirements in the way a tenant's written statement is, but a licence that is silent on them is exactly the kind of document that generates a dispute six weeks in. State the notice period each side must give to end the arrangement, and be honest that it is a licence and not a tenancy, since that label, backed up by the reality of shared living, is part of what protects the resident householder's flexibility later.
Ending the arrangement
Because a lodger is an excluded occupier, the householder can generally end the licence by giving reasonable notice without needing a court possession order, and can change the locks or ask the lodger to leave once that notice period has run, without using force or threats, which can still be a criminal offence. This is a genuinely different position from evicting a tenant, where a court order is required if the occupier does not leave voluntarily, and where doing it yourself can amount to unlawful eviction. The lighter regime for lodgers exists specifically because the arrangement is a shared-living licence rather than a tenancy, so it only holds if the underlying facts, a resident householder and shared accommodation, genuinely match.
The tax angle, at a high level
Taking in a lodger who shares your home can qualify for the Rent a Room Scheme, which lets a homeowner earn a set amount tax-free each year from letting furnished accommodation in their main residence, with the threshold halved if someone else also receives income from letting in the same property, such as a joint owner. The relief covers gross receipts, so rent plus anything charged for meals, cleaning or bills counted together, and it applies automatically if receipts stay under the threshold, with no return needed just for that income. Thresholds and the detail of how the scheme interacts with other income can change, and this is not tax advice. Check the current figure and rules on gov.uk, or with an accountant, before you rely on this for your own situation.
Outside England
This licence is drafted for a resident-landlord arrangement in England, where the excluded-occupier position rests on section 3A of the Protection from Eviction Act 1977. The underlying checklist, resident householder, shared accommodation, clear notice terms, house rules, still applies wherever you are. If you are elsewhere, hold your local licence against these same questions: does the owner genuinely live there, does the lodger share accommodation with you, and what does local law say about ending a shared-living arrangement.
Where people get this wrong
The most common mistake is a householder who moves out, or effectively stops sharing the property, while still calling the arrangement a lodger licence. Once the resident condition stops being true, the excluded-occupier status is at real risk of no longer applying, whatever the paperwork says. The second common mistake is giving the lodger a lock the householder does not hold a key to, which can look like exclusive possession of the room and blur whether the arrangement is a licence at all.
How to draft one in 99 Data Rooms
Inside AI Legal Drafting, the 99 Data Rooms template library, the Lodger Licence (England) sits in the Property & tenancy group, alongside the Assured Periodic Tenancy and the Occupation Contract (Wales). It is written to reflect the excluded-occupier position: no exclusive possession, resident-householder access, a stated end date and an agreed notice period, rather than the formal Section 8 process used for tenants. As with every template in the library, the assistant selects clauses by ID from a fixed clause library using your answers and fills the blanks, which matters here because the difference between a licence and a tenancy is a legal distinction that a generic AI chatbot can blur without you noticing. See our companion guide on drafting a lodger licence with AI for the full walk-through, or our guide to the best data room for property and real estate if you are managing more than one arrangement like this.
Draft it, share it, sign it, one flow
Once the draft is ready, share it with the lodger as a tracked, revocable link instead of a paper form left on the kitchen table. On Plus, gate it behind a verified email, so you know the person opening it is the person moving in, and page-by-page analytics show which pages they opened and for how long, useful before someone moves in for the first time.
When both sides are ready, send it for signature in the browser, from Plus. The lodger signs without needing an account, and the executed licence returns with an audit certificate recording who signed, when, their intent to sign, a privacy-protected network location and a SHA-256 fingerprint. Electronic signatures are admissible for most commercial documents in England and Wales; see our explainer on whether electronic signatures are legally binding for the detail. General information, not legal advice. Keep the signed licence and its start date stored in the same place as any later notice you send, so there is a single record of the whole arrangement.
Frequently asked questions
What makes someone an excluded occupier rather than a tenant?
Sharing accommodation, such as the kitchen or bathroom, with a householder who lives in the property as their only or main home, both when the arrangement starts and when it ends (section 3A of the Protection from Eviction Act 1977). If that holds, the lodger is generally an excluded occupier, with lighter notice and eviction rules than a tenant.
Does a lodger have the same rights as a tenant?
No. A lodger does not benefit from the Housing Act protections tenants get, and in most cases a householder can end the arrangement with reasonable notice and without a court possession order. The arrangement only works this way while the householder genuinely lives in the property and shares it with the lodger.
How much notice does a lodger have to be given?
The notice period the licence sets, as long as it is reasonable. There is no fixed statutory period for an excluded licence; if the licence is silent, reasonable notice is judged on the facts, and a period at least as long as the rent period is a common rule of thumb. Check the current guidance if a situation looks contested.
Do I need to protect a lodger's deposit in a scheme?
No. Deposit protection schemes apply to assured tenancies, not to a lodger licence with a resident householder. It is still sensible to record any deposit taken, what it covers, and the conditions for returning it, even though the statutory scheme does not apply.
Is lodger income tax-free?
It can be, up to the Rent a Room Scheme threshold for furnished accommodation in your main home, halved if someone else also receives rental income from the same property. This is general information, not tax advice. Check the current threshold on gov.uk before relying on it.
Draft your lodger licence in 99 Data Rooms
You can draft a lodger licence from a fixed clause library, keep it, and share or sign it in the same place, built around the excluded-occupier position rather than a generic tenancy template. Signing starts on Plus. The free tier gives three rooms and twenty-five active links, forever, with no card, plus Legal credits for the drafter each month. Start for free.
Sources
- Excluded occupiers and eviction of excluded occupiers, Shelter Legal England: https://england.shelter.org.uk/professional_resources/legal/renting/occupiers_with_limited_security/excluded_occupiers ; https://england.shelter.org.uk/professional_resources/legal/possession_and_eviction/eviction_of_excluded_occupiers
- Protection from Eviction Act 1977: https://www.legislation.gov.uk/ukpga/1977/43 ; excluded tenancies and licences, section 3A: https://www.legislation.gov.uk/ukpga/1977/43/section/3A
- Rent a Room Scheme, HMRC helpsheet HS223: https://www.gov.uk/government/publications/rent-a-room-for-traders-hs223-self-assessment-helpsheet/hs223-rent-a-room-scheme-2025
- Tenancy deposit protection rules (do not apply to lodgers): https://www.gov.uk/tenancy-deposit-protection
- Electronic execution of documents, Law Commission (2019): https://lawcom.gov.uk/project/electronic-execution-of-documents/