Buying an HMO that is unlicensed and converting to single use?

by Readers Question

9 months ago

Buying an HMO that is unlicensed and converting to single use?

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Buying an HMO that is unlicensed and converting to single use?

My husband and I are in the early stages of buying a property which currently has 8 tenants. It’s a Victorian house with a small basement, 4 let rooms in the first floor, 4 let rooms on second floor and a separate but unoccupied flat on top floor.

We intend to give notice to all tenants in the day we complete and convert house back to single use for our family. We are buying from a deceased estate.

The property was granted HMO planning permission in 1997 and it was renewed in 2002. Since then the rental agency and the deceased landlord claim to have written to the local council several times to ask if they need an HMO license.

Each time they have been told it is not necessary – we haven’t seen evidence of this. However, there are no HMO licences at all in the council area (from their website). We don’t want to stir up a hornets nest by asking the council about this, but at the same time don’t want to face a hefty fine and rent back payment!

Please can you advise what our legal position would be?

Jo



Comments

Neil Patterson

9 months ago

Hi Jo,
Check with your solicitor, but it may be worth holding out for vacant possession rather than you take all the risk and pain of giving notice.

John Frith

9 months ago

This is from: https://www.gov.uk/house-in-multiple-occupation-licence
"You must have a licence if you’re renting out a large HMO. Your property is defined as a large HMO if all of the following apply:
- it’s rented to 5 or more people who form more than 1 household
- it’s at least 3 storeys high
- tenants share toilet, bathroom or kitchen facilities"
I'm not sure if this property is excluded on the 3 storey bit
Anecdotal evidence suggests that if the council become aware of an HMO that should be licensed, but isn't, then they will not be sympathetic to excuses from landlords.

Rob Crawford

9 months ago

You need to instruct your solicitor to ask the current owners for evidence that it does not fall into the definition of a licensed HMO. They may not be asking the right Council department. It sounds like it should be to me. Alternatively, call the PRS Council team and describe the property to them. You don't have to identify the property. Make your own conclusion from their response.

Reply to the comment left by Neil Patterson at 23/11/2017 - 15:05
They aren't willing to give vacant posession. We've already tried.

Reply to the comment left by John Frith at 25/11/2017 - 01:45
It's a deceased estate so no proof that owner contacted council but the letting agency who have managed it fir 20 plus years tell us that she had contacted them several times and they weren't interested. In addition the agency have other hmos which should be licensed but the local council aren't interested - they've asked for a risk assessment but that is all.

Reply to the comment left by Rob Crawford at 25/11/2017 - 10:23
Thank you I'll try PRS. Owner is deceased and solicitors are clueless.

Michael Mathews

8 months ago

I run 20 HMOs. Where the law requires me to have an HMO Licence I have them (3 storeys or more).

As far as HMO Licences are concerned, you can easily regularise the situation by lodging an application for an HMO Licence (the landlord's situation becomes legal immediately upon lodging such an application, no matter how long it takes to get one (often months ~£1k). You can also regularise the situation by asking the Council for a Temporary Exemption (see: https://secure.manchester.gov.uk/forms/form/542/en/temporary_exemption_to_licence_a_hmo_-_application_form)

Planning permission was not required to change use from single occupancy to multiple occupancy, but in 2011 (in Manchester and similar times elsewhere) many council's issued a Article 4 Directives that removed people's "Permitted Development Rights" to create HMOs without asking for planning permission.

A change of use - from Single Household (D3) use to Multiple Household Occupation (D4 (upto 6 households) or Sui Generis (over 6 households) ) requires planning permission in areas where an Article 4 Directive has been issued.

But note also, that a change of use back from D4 (HMO) to D3 (single occupancy) strictly also requires planning permission (in Article 4 Directive areas) - though Planning Authorities in most cases would give this automatically and the Enforcement Concordat means that they could not enforce you failure to get Planning Permission for a change of use back from D4 to D3, when they would have agreed to it, had you just asked.

You should note that most mainstream lenders fight shy of any involvement in providing mortgages for HMO houses and that specialised lenders want to check all is in order before they advance a penny - Planning Permission is their key concern. HMO Licences can be applied for often as you are progressing with the mortgage.

Any property that was in use as an HMO at the time of an Article 4 Directive coming into force, has planning permission automatically to be an HMO - not a single occupancy house.

John Frith

8 months ago

The OP may be sanguine about temporarily owning an HMO that should have a license but doesn't - based on the local councils lack of interest in enforcing. However, as the page linked to by Michael Mathews states, it is a criminal offense, and if something untoward happened (eg a fire), I believe that same council would be inclined to prosecute.


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