HMO consultation is a sham to avoid compensation claims

by Property118.com News Team

11:06 AM, 13th December 2010
About 10 years ago

HMO consultation is a sham to avoid compensation claims

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HMO consultation is a sham to avoid compensation claims

An internal report from town hall advisers confirms consultation over extending house in multiple occupation (HMO) powers is a sham aimed at avoiding compensation claims.

The report – to councillors in Milton Keynes – suggests Housing Minister Grant Shapps is urging councils to take on controversial planning powers to curb the spread of shared houses in cities and seaside towns.

The report claims that implementing a 12-month consultation reduces the risks of councils having to pay out thousands in compensation to landlords.

Milton Keynes is one of the gang of three councils that tried to overturn the minister’s decision to revoke statutory controls giving councils planning powers in April 2010.

Mr Shapps reversed that decision in October, claiming councils already had enough powers to deal with problems from shared houses.

In recent weeks, several councils have announced intentions to make houses in multiple occupation (HMOs) subject to planning – Bath and Durham have joined those in Oxford, Manchester and Newcastle upon Tyne. Milton Keynes intends to start consultation in April 2011.

Many held back fearing compensation claims from landlords.

The Milton Keynes reports reveals that government lawyers believe landlords will not be able to make compensation claims if they are given a 12-month window during a consultation period to sell or convert their properties.

“There is also the possibility of additional claims for compensation related to loss directly attributable to the removal of the permitted development right. This includes depreciation in the land value and would only arise in respect of an Article 4 Direction [taking on planning powers] with immediate effect,” says the Milton Keynes document.

“Although the housing minister has made recent comments in relation to the risk and size of compensation being much less than predicted, these comments do not override the compensation regulations. A real risk of compensation claims against the council exists in relation to any application refused or granted permission subject to conditions during the 12-month period.

“Claims in relation to depreciation could be substantial. For this reason the recommendation remains that the Article 4 Direction should only be introduced following a 12-month notification period to avoid the risks of compensation.”

Full report: http://cmis.milton-keynes.gov.uk/CmisWebPublic/Binary.ashx?Document=31690


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Comments

10:51 AM, 14th December 2010
About 10 years ago

We recently had a 3 week consultation period in Exeter which was a complete joke. The only information most households received was from our local Labour Party contact and was extremely one-sided and misleading. During the consultation the Council ensured the local newspaper was fully occupied reporting about them granting planning permission for a gipsy camp in another part of the city so the Article Four consultation wasn't really reported at all.
Every affected household was sent a questionaire in a very plain white envelope with no real explanation. This was supposed to be filled in and sent back with the house address still attached to it (presumably so the Council knew the people responding actually lived in the affected area) but then a big deal was made about a petition supporting the proposal signed by 700 random anybodies.
Our local Councillors weren't even aware that anyone other than students lived in shared houses. They also weren't aware that a lot of postgrad students live in one or two bed apartments. It was the rapid increase in the number of Council Tax exemptions that Exeter City Council used as the basis for wanting this Article Four Direction but at least half of the additional exempt properties are small apartments and wouldn't be restricted by this anyway.
In Exeter student and working share groups both favour living in the same area more or less.

10:59 AM, 14th December 2010
About 10 years ago

Hi Jo

Thank you for sharing this story.

Regards

Mark Alexander


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