Bad advice and penalty fee for HMO let in Newham?

by Readers Question

9:52 AM, 29th April 2019
About 5 months 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

Mike

11:40 AM, 30th April 2019
About 5 months ago

Paul, if you have been granted an HMO licence, have a look on page 14 of 14 under a bold heading
"Failure to comply with any licence conditions may result in proceedings including fines up to £5,000 and loss of licence"
Paragraph 2 says clearly : Any HMO for more than 6 people will also require planning permission, please contact the Councils duty planner on 020 337 38300......and so on.
This extract taken from my own HMO licence issued by Newham.

I was granted licence to put up to 7 maximum number of persons of any age, this means a baby is also counted as a fully grown up person!
but up to 5 households only in a 5 bedroom property.

Frederick Morrow-Ahmed

14:01 PM, 30th April 2019
About 5 months ago

Paul, if you are letting to 3 tenants on a single AST then I am not sure why planning permission would be required. It's not a change of use, surely

Frederick Morrow-Ahmed

15:24 PM, 30th April 2019
About 5 months ago

Reply to the comment left by Frederick Morrow-Ahmed at 30/04/2019 - 14:01
Unless there is a 'HMO Article 4 Direction' in force in your borough. Please check this up.

Kincavel

10:02 AM, 1st May 2019
About 5 months ago

I'm sure all the advice above is good and worth pursuing. However, one issue which may have been overlooked is the lack of knowledge from the Agent about HMO licensing and planning (particularly if Article 4 is in place) in the first place. I recently asked a very well known agent to let a property and was astounded by the their lack of HMO knowledge - 3 or more sharers in Haringey requires planning and additional licensing and planning is very unlikely because of an apparent shortage of family homes and the strict criteria (minimum 120 sq meters property size).
Sadly, I realised there are probably many landlords out there relying on agents to understand the rules (which they clearly don't) and the landlords themselves don't realise if anything goes wrong they will ultimately be to blame and held to account. ARLA and similar bodies should be held to account, particularly with the high fees 'Professional' letting Agents charge for letting and even more so, in the current weighty legislative climate landlords and lettings are increasingly subjected to.
There is also the wider issue regarding HMO planning and licensing which for me is clearly a money grab and discriminates against single sharers - I can have any number of family members as a single household but am restricted when it comes to individual adult sharers supposedly because of overcrowding!
HMO Fees and policies are not applied consistently across all boroughs which leads to disparity in pricing (from £50 - £1500 I read) and confusion many experience today.

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