Bad advice and penalty fee for HMO let in Newham?

by Readers Question

9:52 AM, 29th April 2019
About 3 weeks ago

Bad advice and penalty fee for HMO let in Newham?

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Bad advice and penalty fee for HMO let in Newham?

Hi, I have a very tough situation here with my letting agent. Beginning of this morning, my letting agent found 3 sharers for my 3-bed flat located in Stratford. Basically, I was told that I just pay additional £500 upgrading my selective license to the additional HMO. It is very straightforward.

Once I put the tenants in (they want to move in pretty soon), they will start to do the planning permission. I trusted what I’ve been told. They started to do the referencing checks and preparing the tenancy agreement etc. Afterwards, I contacted the Newham council to pay £500, but I was told that the chance of getting planning application is very unlike at the moment, because there is a shortage of the family housing within the area.

I then went back to the letting agent and asked them to stop proceeding this offer. Guess what! The agent told me that I have accepted the offer and if I pull out of the agreement I will be invoiced for the Letting fee (£2992.20 inc one-year letting commission ) and any other works incurred and booked through them.

This is in accordance with the terms of the agreement to which I have signed. I really can’t understand! I even haven’t signed the tenancy agreement yet. Is it legal to charge me before the tenancy agreement?

Can anyone provide a web link clearly stating whether I could put the tenants in first before my planning permission is granted?

Thanks in advance!

Paul



Comments

Neil Patterson

9:56 AM, 29th April 2019
About 3 weeks ago

Hi Paul,

Please find out which Redress scheme the agents belong to and document your complaint. You have done things in the wrong order, but without experience it was under their guidance.

Rob Crawford

10:20 AM, 29th April 2019
About 3 weeks ago

The agent should not have progressed this or have entered into an agreement with the tenants without first confirming with you that the change in licence was agreed between you and the council. The fact that referencing checks had commenced suggests some discussion and agreement between you at the agent in securing these tenants. It would appear that there was a delay in you contacting the council, you waited for the reference results first. The agent manages the process for you and should advise you appropriately, they probably have little understanding on how the licensing process works. Also, is your house compliant with the Council's Additional Licensing HMO standard? If not, additional costs may be incurred. I would expect the agent to check first that the property met this standard. Armed with your facts, I suggest you arrange a face-to-face meeting with the agents Principle and detail where they have failed in their obligations to you. If this does not work ask for a copy of the agents redress process and follow it.

Terry Fitzpatrick

7:28 AM, 30th April 2019
About 3 weeks ago

As I see it the situation is one of reliance on professional advice, in this case that of the agents. If they have offered themselves as property professionals willing to undertake work for a fee then you have, whether in writing or not, a contract which is part performed.
The dispute has arisen as a result of a lack of competence on the part of the agent as a result of which not only do you not owe them anything but you have an action against them for losses to yourself resulting from their negligence.

This is my opinion, for what it's worth, but do check with a lawyer. If you want to send me more details such as those of the agents I will, pro bono, do some checks on them through data bases that I have access to.

Terry Fitzpatrick.

blair

8:29 AM, 30th April 2019
About 3 weeks ago

I also say he was wrong to think u can apply for planning consent retrospectively. If he failed to warn u of the risk of refusal and the implications of (financial) of a Planning Breach Notice. Weather ur agent is qualified or not he gave you negligent advice. You might have to counter sue. I would wait for him to serve a Summons. First though the agent should have a despite’s procedure and this should be followed in first instance
Frankly you seemed to have taken short cuts/risks that have not gone your way. Did not any alarm bells ring!!!

blair

8:32 AM, 30th April 2019
About 3 weeks ago

I also say he was wrong to think u can apply for planning consent retrospectively. If he failed to warn u of the risk of refusal and the implications of (financial) of a Planning Breach Notice. Weather ur agent is qualified or not he gave you negligent advice. You might have to counter sue. I would wait for him to serve a Summons. First though the agent should have a despite’s procedure

Frankly you seemed to have taken short cuts/risks that have not gone your way. Did not any alarm bells ring!!!

Terry Fitzpatrick

8:46 AM, 30th April 2019
About 3 weeks ago

Reply to the comment left by blair at 30/04/2019 - 08:29
Blair is correct in his advice that you check if the agents were members of one of the arbitrations schemes, it is a legal requirement and they, and or you, would not have been able to serve a S21 if, on the signing of the contract, they were not. It would seem to me that not only do you not owe them money in fact they owe you.

Preface all correspondence " Without Prejudice" and consult a solicitor as soon as possible. Under no circumstances admit any liability of any kind and do let me know the name of the agent as I may already have come across them being as I am in Hackney.

Lindsay Keith

9:45 AM, 30th April 2019
About 3 weeks ago

See a professional indemnity solicitor immediately.

Your position is not good but it seems that you have been led along, the blind leading the blind. Now the lights have come on, get sound legal advice from a specialist, NOT a generalist. I am not a landlord and tenant expert but I was a professional indemnity solicitor, now it seems a very long time ago!

blair

10:51 AM, 30th April 2019
About 3 weeks ago

For me I wouldn’t rush to appoint a solicitor of any kind yet. First invoke the agents dispute procedure and see were that goes. You nor they can’t go to court until u have tried to resolve. Definitely mark all correspondence “without prejudice” to be on safe side
Did they warn u that a HMO has stricter fire/code regulations that would likely incur extra costs if it’s a definite HMO ( 3 sharers not always a HMO)

blair

10:52 AM, 30th April 2019
About 3 weeks ago

For me I wouldn’t rush to appoint a solicitor of any kind yet. Their fees will cost you more than their claim even if u win!!! First invoke the agents dispute procedure and see were that goes. You nor they can’t go to court until u have tried to resolve. Definitely mark all correspondence “without prejudice” to be on safe side

Did they warn u that a HMO has stricter fire/code regulations that would likely incur extra costs if it’s a definite HMO ( 3 sharers not always a HMO)

Mike

11:09 AM, 30th April 2019
About 3 weeks ago

Hi Paul, as far as I know, planning is only required if you were to have more than 6 people living at the property, so if you had 7 then you would need planning, I saw this on Newhams website under licensing condition, do have a look and you may be Ok with up to 6 ppl, let us say the 6 ppl can be 3 couples with no children.

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