HMO consultation is a sham to avoid compensation claimsMake Text Bigger
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.”
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