HMO daily room rental, would this be a hotel?

by Readers Question

12:37 PM, 7th May 2014
About 7 years ago

HMO daily room rental, would this be a hotel?

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HMO daily room rental, would this be a hotel?

 

HMO daily room rental

I know that the definition of a “hotel” is (very roughly) a place that rents rooms on a daily basis, so if rooms in a HMO were rented out on a daily basis could the HMO then be legally defined as a hotel? If not, what is the difference?

Some hotels rent rooms on a long-term basis, so although they may officially be for holiday lets, there are cases where people actually live in hotel rooms, sometimes for many years, but the hotel remains a hotel, it does not turn into a HMO or hostel.

Apart from the massive advantage of not being subject to the Protection from Eviction Act, would there be any other advantages or disadvantages to getting a HMO recognised as a hotel? Perhaps by renting rooms on a day to day basis, rather than a weekly or fixed term basis?

Looking forward to reading your thoughts.

Thanks

Robert

Comments

Mark Alexander

12:41 PM, 7th May 2014
About 7 years ago

Hi Robert

This isn't my field but my understanding is that licensing is even more onerous for a hotel than it is for a HMO.

Also, isn't the difference between a Hotel and a B&B a licence to sell alcohol?

If Basil Fawlty wanted to evict the Major I wonder whether the Major would be able to claim that the hotel was his home on the basis that it is his principal private residence?
.

Romain Garcin

12:53 PM, 7th May 2014
About 7 years ago

I don't think that the difference is related to daily basis v. longer term, or even whether the accommodation is one's only residence.
Rather this is a question of licence (excluded licence in case of hotel or lodger) v. tenancy: whether there is exclusive possession, whether services are provided, whether the landlord can move the person to another room, etc.

Steve From Leicester

13:07 PM, 7th May 2014
About 7 years ago

If you treat the people occupying your room as guests by, for example allocating which room they stay in (and moving them if necessary), changing their sheets for them etc, and if the majority of your guests only stay on a very short term basis then I'd say your property looks like a hotel / B&B.

If you treat people as tenants, allowing them to select their own room, and they stay for weeks or months, by-and-large looking after themselves I'd say your property looks like an HMO.

And on the basis that it if it looks like a duck, waddles like a duck and quacks like a duck it probably is a duck I'd say the first example probably is a hotel and the second an HMO.

And if its a hotel you'll struggle to get away with calling it an HMO and vice versa.

Ian Ringrose

13:56 PM, 7th May 2014
About 7 years ago

Is making the persons bed every day and providing clean sheet etc worth the effort to get quicker evictions? If so would you not make more money running a B&B?

A judge will expect you to provide the level of service that he/she expects when straying in a B&B. Otherwise the judge will just dish out some orange source for your duct.

Robert Mellors

18:33 PM, 7th May 2014
About 7 years ago

Reply to the comment left by "Romain " at "07/05/2014 - 12:53":

In my "HMO's" (if that's what they are) I issue licence agreements. I retain the right to move residents to different rooms, I provide bedding, cleaning of communal areas monthly (and vacuuming of resident's room at the same time if required). Exclusive possession is NOT given, and this is acknowledged by the resident. However, simply having licence agreements does not mean the accommodation is not subject to the Protection from Eviction Act (PEA), but if it's a hotel then it isn't subject to the PEA.

No food or alcohol is sold. I do not make the beds, or wash their bedding while they are resident. Most residents stay for between 2 months and 2 years.

Does this look more like a HMO or like a hotel? I see similarities to both, does that mean I can choose what to class it as? I guess there is a line somewhere between the two, but I'm not sure where that line is or which side of it my accommodation should be on (or does it straddle both?). There are advantages and disadvantages to each, but when I do get an anti-social non-paying resident then obviously I would like to be able to get them out as quickly as possible so a hotel classification would be useful so that I can immediately protect other residents from the anti-social resident's behaviour, rather than have to wait months for the court to grant a warrant of eviction.

Romain Garcin

7:49 AM, 8th May 2014
About 7 years ago

Reply to the comment left by "Robert Mellors" at "07/05/2014 - 18:33":

My understanding is that hotels create excluded licences, as you would if you took a lodger, which you can't at a HMO.
I don't know exactly how, but my guess is that statute explicitly says that licences at hotels, etc. are excluded. If so you would need to setup an actual guest house with whatever requirements, registration, planning permission, etc. required.

John Daley

12:31 PM, 8th May 2014
About 7 years ago

The real question seems to be "Is the occupation a tenancy or a licence"

If it's a tenancy, with exclusive posession, of a dwelling, for a consideration, regardless of written or verbal agreements or the understanding of the parties its covered as an AST by the law.

If you can prove that you have not offered exclusive posession, by retaining and exercising a right to enter, normally to provide services, bed making, cleaning etc or you are a resident landlord then it's a licence and governed by contract law.

This debate could be a bit of a red herring because I suspect the real objective is to subvert the security of tenure offered by the AST. Beware though because courts have for many years ruled that a lettting is a tenancy unless a very strong case was made for a licence.

If you are leaning towards the Hostel / Hotel idea then you should be aware that this accomodation is raher more intrusively regulated by local authrorites and particularly by the Fire Service.

Puzzler

16:48 PM, 10th May 2014
About 7 years ago

A hotel is not simply a B&B with an alcohol licence. The definition is not proscriptive but according to Visit Britain, it should also have 24-hour staffing on the premises, a restaurant and a bar. So your HMO cannot be a hotel, unless you plan to staff it.

For a B&B staff must be present at "significant times" and breakfast must be provided. You could offer self-catering but I'm not sure how shared facilities would sit.

B&B accommodation for DSS is not the same and I don't know about that except that if it is a B&B you probably have to provide breakfast (the clue is in the name) and services such as laundry of bedding and cleaning.

Also you would need a commercial mortgage if you need borrowing.

Finally and most importantly you have to have Class C1 planning permission for any kind of commercial accommodation provider.


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