Understanding Your Entitlements as a Tenant and Freelancer

Around one in four people are now working from home, and it’s not hard to see why. The flexibility and convenience of the internet make it incredibly appealing to work from your sofa. Why face a daily commute when you can simply turn on your computer and enjoy a cup of tea?

However, if you’re a tenant as well as a freelancer, you might be violating your tenancy agreement. Recent changes in the law aim to make things clearer for both landlords and tenants, but it remains a bit complex.

Understanding the previous law is important because the changes made in 2015 don’t apply to tenancy agreements signed before that year. Nor do they apply to tenancy renewals after a short-term assured tenancy ends.

Before 2015, the Housing Act 1988 stated you couldn’t run a business from home, and the Landlord and Tenant Act 1954 made it clear you couldn’t live at your business premises. If you told your landlord you’d be running a business from home, you’d have to sign a business tenancy agreement. This put landlords in a tough spot because Part 2 of the 1954 Act obligated them to renew the tenancy continuously, effectively giving you indefinite tenancy rights.

With more people working gigs and freelancing, this situation became unworkable. So, in October 2015, the law changed. The Small Business, Enterprise, and Employment Act now allows landlords to offer a Home Business Tenancy. This means landlords aren’t forced to keep renewing the tenancy indefinitely, and freelancers can legally run their businesses from home.

If you’re a tenant, you must let your landlord know you’re running a business from home. But what’s considered a home business can be confusing. When does working at home cross the line into running a business?

For example, if you bring work home from the office, does that count? If you travel for your job but do paperwork at home, is that considered running a business? If you work remotely for a company that has an office elsewhere, does that make you a home business tenant?

Think about it this way: if you set up an Amazon marketplace account to sell your old stuff, and then start buying items to resell for profit, when does that become a business? Or if you’re a hairdresser doing cuts for friends in your kitchen and then start booking regular clients, at what point is that considered running a business?

Even if you see your work as just earning some extra cash or think your business is primarily out on the road, using your kitchen table for admin and receiving business mail at home might mean you’re running a business.

Your landlord is concerned about this because of the legal and financial implications and risks. Running a business from home comes with many complexities, and your landlord has to issue the correct type of tenancy agreement. Therefore, you must ask for their permission, and they will likely consult legal advice to determine whether a Home Business Tenancy Agreement or a Business Tenancy Agreement is needed.