Council demanding £9,000 for change of use from guest house to HMO

Council demanding £9,000 for change of use from guest house to HMO

13:04 PM, 18th November 2013, About 10 years ago 15

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I would be grateful for your advice on the following HMO application matter.

I am in the process of applying for a HMO licence for a 7 bed house which my son shares with his friends. They are all post grads, studying medicine in the local medical school.

The City council has approved the HMO application but require me to sign an Unilateral Undertaking of contributions to the council. This I have been informed is a legal agreement, for contributions required in accordance with the Council Planning Obligations Strategy and Local Plan policies 3/7 and 3/8. I also have to pay for the legal fees for this. change of use from guest house to HMO

I have disputed the contribution requested, which comes to over £9000! These included contribution to Informal Open Space, Outdoor and Indoor Sports facilities, Community Facilities etc. I have put forward the argument that the students will have many facilities that are available to them, at the hospital, medical school as well as their undergraduate colleges to which they still belong. These include many social and sports facilities.

However, the response I received was:

As for the contributions, they are correct and payable. The Council cannot take into account the facilities provided either by the colleges or the hospital, because once the use as a HMO is granted, it could be occupied by anyone, and many future tenants will not have access to these facilities.

I really do not object to some contribution to the community, but I think a request for over £9000 is a bit extortionate!

Is this Unilateral Undertaking a legal obligation, as I have not heard or read about this?

Many thanks for your advice.

Kind regards


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13:37 PM, 18th November 2013, About 10 years ago

Hi Alice,

I own three HMO properties in Plymouth and with all three I went through the process of planning application. One application was in late 2011 and the other two in 2012. I was not required to pay or enter into any unilateral undertaking, or make any payments of any kind.

Which City Council are you dealing with?

I am also building a house in North London on a previously undeveloped piece of land (the rear garden of the adjacent property). This was subject to a one off payment of £3900. Councils can charge these fees either via what is known as section 106 contributions or CIL (community infrastructure levies). Like any planning consent, the consent is subject to conditions as spelled out by the council. These conditions can be appealed but this costs and takes time.

With a condition such as this one, I am not sure on what basis you could appeal. To appeal on the grounds that it's "unfair" or " I don't think I should have to pay it" does not create a strong defence. You would have to demonstrate that it has been incorrectly applied or the calculation of the actual figure is incorrect.

Unfortunately councils are using the development process and planning applications to boost their bottom line. The London council which I have been dealing with has introduced a £50,000 charge when a new dwelling is created. This could be a new one off house, dividing an existing house into two flats (one additional dwelling), or a much larger development. The council's view that the £50,000 charge per new dwelling is 'affordable' in 99% cases, as the 'developer' is making a lot of money. Of course you can appeal but you have to demonstrate that the £50,000 charge makes the project unviable.

I am very interested to hear what others have to say or if they have had similar experiences to you Alice.



David Dixon

15:05 PM, 18th November 2013, About 10 years ago

I would need to know the name of the city council before I could comment.
There has to be a properly justified explanation for any charge by a public body.

Jamie M

15:23 PM, 18th November 2013, About 10 years ago

Keep it as a guest house and tell the council nothing

Mark Alexander - Founder of Property118

21:49 PM, 18th November 2013, About 10 years ago

If you had a live in manager, could be one of the tenants, could you let the rooms on licences and keep it as a guest house? If you were to serve a very basic breakfast perhaps it could be a B&B for short term homeless due to mortgage possession or tenancy eviction? Depending where the property is located the local Council may have a desperate need to refer business to you on this basis. If demand is strong enough you may able to be quite picky on who you take in too. Not all B&B's are for business travellers and holiday makers. I've heard there's big money to be made at the bottom end of the market.

Mark Alexander - Founder of Property118

16:49 PM, 19th November 2013, About 10 years ago

Hi Alice

I also posted a link to this article in the HMO Landlords Facebook Group. There is a solicitor there offering to give you some advice, please see >>>


21:27 PM, 19th November 2013, About 10 years ago

Alice could indeed keep it as a guest house but she wants it for her student son and his housemates, in which case she has to change to HMO which requires change of use planning permission and HMO registration

Mark Alexander - Founder of Property118

21:44 PM, 19th November 2013, About 10 years ago

Reply to the comment left by "Puzzler " at "19/11/2013 - 21:27":

As you know, HMO's are not my thing so I'm learning from this thread. What's to stop Alice from employing her son as a live in Guest House Manager and what's to stop Guest Houses letting rooms on licence to students?

Jamie M

21:45 PM, 19th November 2013, About 10 years ago

It matters not who stays there, its a guest house, innitt?

Mark Alexander - Founder of Property118

22:00 PM, 19th November 2013, About 10 years ago

Reply to the comment left by "Jamie Moodie" at "19/11/2013 - 21:45":

So that begs the question, why did Alice apply for change of use in the first place?

Richard Player

16:07 PM, 23rd November 2013, About 10 years ago

I am in the process of negotiating with a local council. Instead of applying for change of use from a Guest House to an HMO, we are just providing sheets only for the beds, through a weekly laundry company, and provide 2 boxes of cornflakes in the communal room per week. This still qualifies as a guest house, so you don't need to go through change of use and pay the extortionate fees that the council demands.

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