Should there be a tenancy contract even if I don&#39;t intend to charge rent?
<p>I have a very close friend and we've agreed that she will move into the spare bedroom of my flat - viewed as her being an equal resident with me in a shared accommodation, not as a lodger in my spare bedroom.</p>

<p>However, I do not wish to charge her rent. To her, a year's rent is half her net pay. To me it is pocket change, an amount I could spend on a whim. I would feel terrible charging her such a significant sum when to me it would mean so little. I would prefer her to put that money aside for a house deposit so that if she ever chose to leave this arrangement she might be able to afford the deposit on a shared ownership scheme (staircased rent to buy) and then get a foot on the property ladder, if she so wished.</p>

<p><strong>Should I still create a tenancy contract in this case? Is there any benefit to this for either of us if I don't intend to charge rent?</strong></p>

<p>(I live in a leasehold flat with no mortgage. The leasehold agreement specifically permits subletting).</p>

<p>I am assuming you are in England and Wales. Other parts of the UK have separate legal systems, so the below wouldn't necessarily apply.</p>

<p>I don't believe it's possible to have a tenancy agreement without charging rent. <a href="https://england.shelter.org.uk/legal/security_of_tenure/basic_principles_security_of_tenure/what_is_a_tenancy#0" rel="nofollow noreferrer">Shelter says</a> that rent is one of the hallmarks of a tenancy as defined by the House of Lords judgement <em>Street v Mountford</em>. There are other hallmarks and your friend should take advice if she wants to be sure that she is genuinely going to be a tenant.</p>

<p>You say that a year's rent is half your friend's net pay, but as a potential landlord and tenant you are free to negotiate rent at any level you choose. You could decide to charge rent at a rate of e.g. £1 per month, enough to buy an entire bag of <a href="https://en.wikipedia.org/wiki/Peppercorn_(legal)#Transactions_involving_actual_peppercorns" rel="nofollow noreferrer">peppercorns</a>.</p>

<p>At such a low rent there would be no direct advantage to you in charging rent, but your friend might benefit from extra peace of mind and housing security because she would have some additional rights if there is ever a dispute between the two of you about the housing, or you decide to ask her to leave.</p>

<p>Citizens Advice has a <a href="https://www.citizensadvice.org.uk/housing/renting-a-home/subletting-and-lodging/subletting/rights-of-subtenants-who-live-with-their-landlord/" rel="nofollow noreferrer">guide to rights of subtenants who live with their landlord</a>. </p>

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