HMO clarity within a ‘residential ‘lease’?

HMO clarity within a ‘residential ‘lease’?

9:35 AM, 23rd May 2023, About 11 months ago 1

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Hello,  I manage staff accommodation for our company and recently the company split and the original directors of the company went off and started a new company.

These directors own houses in which we have staff living in them. I personally completed all the HMO licenses for them and they signed them. Since then those directors have left and started up their own business. On their last day, they created and signed on behalf of the company and on behalf of themselves as the owners, a lease for each of the properties. Between 5 and 21-year leases, all repair and renew. I only have experience with these from leasing shop units many years ago. Never come across them for residential tenancies.

Where on earth do I stand with all the renewals now for the HMO licenses coming up this year, please? The ex-directors are the owners of the properties but they have set up an LTD company for each house too with them as the directors.

Any advice would be appreciated,


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Ian Narbeth

11:08 AM, 23rd May 2023, About 11 months ago

Your problem is complex and it would be necessary to review documentation and the terms of the new leases before advising. Who is the HMO licence holder? On what basis are staff occupying? Do they pay for use of their accommodation? If so to whom?

Leases exceeding seven years are treated differently from shorter leases.

It is almost certainly a condition of the HMO licences that the Council is notified of a change of ownership of the property. Slotting a 7+ year lease in may count as change of ownership.
You do not owe a duty to the new company but it might be worth your writing to the directors and asking them to confirm that they will take all necessary action to ensure the houses remain properly licensed.

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