The most important issue for your daughter is to contact her lender in the first instance and ask about their requirements, she should be very carefully not to breach the terms of her mortgage either wittingly or unwittingly. Prior to the his occupation they will likely require that he sign a simple Deed of Postponement stating that he will not acquire any rights in respect of the property and will vacate upon sale. If he is not contributing directly to the mortgage payments then your daughter should be fine.
Though it is somewhat dry and clinical, she should really consider getting a licence for a lodger drawn up to clarify his rights and protect her interests. It is fair to both parties and she should impress this upon him. You can get licences and information by paying a (relatively cheap) fee from the following sites:
I think your right to have your daughter's position in mind, better to have clarity at the beginning.
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