A free information service from spareroom.co.uk
Getting in a lodger is something which works well for the vast majority of people but it boils down to letting a complete stranger move into your home so isn't without risk. Lodgers don't have the same rights as a tenant would and, once you've given them notice, they have no right to stay. This means that, in effect, the risk to you in taking in a lodger is fairly minimal. However, we strongly advise you to have some form of written agreement in place before the lodger moves in so you can both have peace of mind and have a point of reference if disputes do occur. If a prospective lodger is unwilling to sign an agreement you're better off finding someone else than taking the risk.
An agreement needs to cover the basics such as the amount of rent, when it's payable and what the lodger gets in return. We'd advise you insist that rent is paid by standing order - this means you'll both know when payment is due and also takes the personal element out of collecting rent. You should also cover what both parties need to do in order to terminate the agreement (including what notice, if any, either of you need to give).
You'll also need to be clear about what's included in the way of bills, utilities and council tax and what isn't. Some rents are all inclusive so the amount the lodger pays covers absolutely everything and some cover just the rent and nothing else. When looking for somewhere to live most people set themselves a budget and will need to know what they're getting for their money. Setting this out in writing in advance will also avoid any unnecessary disputes later on.
Peace of mind is worth the extra expense of an agreement but we don't believe you should pay extortionate amounts for what is, in effect, a relatively simple document. Lawpack have contracts and agreements available for download.