What are the liability and insurance implications if my tenant gets a flatmate?

Can you issue a new AST with both names on?

I was hoping that someone more knowledgeable than me would answer this question, as I am in the same boat.
This is where I've got so far.
The first question is what does your contract with the tenant say on the matter. Some rental contracts (as mine does) says that the tenant cannot sublet part of the property without your permission. So then the question becomes are they subletting?
You mentioned the word "lodger", and from what I've read only you the owner can have a lodger. If the tenant thinks they are taking a lodger, they aren't, they are in fact sub-letting - for which they probably need to ask your permission.
So, is there any reason for you not to give permission?
You mention a flatmate, which implies a leasehold apartment. So you need to see what the lease says. It is likely to say that you are not allowed to sublet, in which case I suspect that if you give your tenant permission to sublet, you are breaking the terms of your lease.
Now I'm not sure if such a clause in a lease is legal. I think if it said that to sublet, you would need the Freeholders permission, such permission not to be reasonably refused, then that would be legal. However I think they would have reasonable grounds because if the apartment reverted to the leaseholder (eg if you didn't pay your ground rent) then they would inherit the sub tenant, which would be a headache for then, as they might find it difficult to get empty possession.
So you are probably not allowed to give permission to your tenant to sublet.
But even if you were, you may be forbidden by the terms of your mortgage (if you have one), and also you may be forbidden by any insurance policy. And lastly, if the tenants left, the person subletting has a contract with the tenant which I know from previous research, is valid in the eyes of the law whether you gave your tenant permission to sublet or not.
If I have misunderstood something, please let me know.
Then there is the issue of whether it will trigger the council to consider it an HMO, or for it to fall under any special licensing scheme.
And what about "Permitted Occupiers"? But I believe that if Permitted Occupiers" aren't allowed to pay rent.
What a can of worms!

She may be able to take in a lodger on a lodgers agreement without adding to the AST. Advantage of this is the tenant can just give the lodger notice to lease, no S8 or S21 needed.

Probably need to ring the insurance company to check, but don't see it as being an issue.

I just checked and Citizens Advice says in a section about taking in a lodger:
"If you rent your home, the person moving in will be a subtenant instead of a lodger."

https://www.citizensadvice.org.uk/housing/lodging-and-subletting/lodging-subletting/landlords-of-lodgers/taking-in-a-lodger-what-you-need-to-think-about-first/

Reply to the comment left by John Frith at 20/09/2024 - 18:15
Interesting that, looks like that avenue is now closed. I guess a new AST with both names on it then. Would have to do all the checks again, right to rent etc.

Get your tenant to look at the Government Rent a Room Scheme.
The tenant can have a lodger under the scheme, with your written approval, and “earn” up to £7,500 pa tax free. They can use this money to help pay their rent or whatever they want to spend it on ie utilities or even a holiday. A lodger has little rights and you can’t be saddled with having to do a new jointly and severally AST

Reply to the comment left by Judith Wordsworth at 21/09/2024 - 08:17
Thats the scheme I was referring to 'a lodgers agreement' . One of my tenants used it once but I (the landlord) had to give permission. The tenant actually took out some other kind of insurance as well (don't know what kind)

I'm repeating myself here but if the tenant thinks he's taking on a "lodger", he's not. According to CAB the tenant is creating a subtenancy. The difference between the two is vast. A lodger is relatively easy to evict. Evicting the tenants subtenant is a nightmare. In fact I don't know if it's possible. Suppose your tenant leaves, leaving the subtenant in place. The subtenant carries on paying rent to your tenant. You can't evict them, because their contract is with the tenant. Your tenant probably didn't give them a gas certificate, so they can't be evicted by the ex-tenant (and why would they, as they're receiving the rent!)
On top of that you've invalidated your own insurance, and if you have a mortgage, you've probably broken the mortgage terms. They're not going to be best pleased.

I'm not sure what CAB mean by a sub-tenant here. I dont think the lodger would have any assured tenancy rights. At best they should be an occupier with basic protection, but if they share living accommodation I think theyd be an excluded occupier or licensee. Have a look at The Landlords Guild site here: https://england.landlordsguild.com/article/what-happens-if-your-tenant-takes-in-a-lodger/

It's good your tenant wants a flatmate, but it could complicate things for you. If she gets a lodger, your property might become an HMO, which has more rules you’d have to follow.
You should check with your local council about that. Also, she’ll need different insurance to cover the lodger, so it’s best to talk to her about that before she makes any plans. Better to sort it out now than deal with problems later!
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