Advice on HMO letting Agreement?

by Readers Question

16:28 PM, 30th September 2020
About 4 weeks ago

Advice on HMO letting Agreement?

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Advice on HMO letting Agreement?

Hi All I would like some advice on what would be the most appropriate, rental agreement for residence living in a HMO property, where they have there own private room and have shared access to lounge kitchen and bathroom.

Would it be best to use an AST or a licence agreement or any alternative agreement?

Any replies would be appreciated.

Thanks Tony


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Comments

Neil Patterson

16:32 PM, 30th September 2020
About 4 weeks ago

Hi Tony,

Do you live in the property yourself or provide some form of serviced apartment? If not it is going to be an AST.

Tessa Shepperson

12:28 PM, 1st October 2020
About 4 weeks ago

You need to be very careful about using 'license agreements' inappropriately. In most cases 'HMO licenses' are actually, as Neil says, tenancies, and the landlord can be prosecuted by the Council for issuing a 'sham license'.

We have tenancy agreements that are suitable for this situation on my Landlord Law service. See our free guide here: https://landlordlaw.co.uk/openaccess_trails/which-tenancy-agreement-guide/

Robert Mellors

12:46 PM, 1st October 2020
About 4 weeks ago

Many HMO landlords issue "licence agreements" but as both Neil and Tessa have alluded to above, these would usually be considered to be ASTs regardless of what the landlord and tenant call them. This was all decided many years ago in the case of Street v Mountfield. This means that almost all "licence agreements" for a property (where the landlord is not residing there), would in fact be a "sham licence", i.e. falsely claimed to be a licence, when in fact the legal position is that it is deemed to be a tenancy (AST).
However, as with most things there are exceptions to the normal rule, and proper "licence" agreements are possible, BUT the legal presumption is of a tenancy, and the threshold for overcoming that legal presumption is set very high, and there would be very few HMOs that would be correctly let on a legally valid licence agreement.

We do let rooms on licence agreements, but we are a not-for-profit organisation providing supported accommodation which includes a wide range of services provided to the residents. We have had the "licence" agreement status confirmed by the court. Most HMO operators are not set up in this way, and a court would deem their occupancy agreements to be tenancies.

Everything PRS

15:30 PM, 1st October 2020
About 4 weeks ago

The dreaded ‘licence to occupy’...


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