HMO licensing and absent freeholder

by Readers Question

15:30 PM, 29th August 2014
About 4 years ago

HMO licensing and absent freeholder

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HMO licensing and absent freeholder

I own a leasehold flat in North Wales, it is one of 3 self-contained leasehold flats in a converted house. HMO licensing and absent freeholder

I have just received a letter from the council which says that the property needs to have a HMO licence otherwise I will not be able to continue rent it out. They say that it is unclear who the freeholder is since the previous company went into administration. I know this because we have not had any rent demands and we are trying to find out also.

Anyway, my question is about clarification of what a HMO is?

I rent via a letting agent and do not let single rooms.

I do not know what the other leaseholders do.

I read that HMO does not apply where each flat is self-contained and on a long leasehold provided it is not let as separate rooms to separate individuals.

I would appreciate any clarification on this point.

Thanks

Warner



Comments

Mark Alexander

15:31 PM, 29th August 2014
About 4 years ago

Hi Warner

That sounds worong to me too.

If I was in your shoes I would write back to the Council to explain the configuration and ownership of the building and ask them to quote the specific legislation they are referring to.
.

matchmade

16:41 PM, 29th August 2014
About 4 years ago

Assuming you have a clear chain of freehold and leaseholder title and you are paying council tax on this single leasehold property within the block of separate units, I can't see how the council can possibly claim you are living in an HMO. Hounslow Council, chosen at random, say an HMO "is defined under sections 254 & 257 of the Housing Act 2004. An HMO can be a building or part of a building if it is:

◾Occupied by persons who form more than one household and where those persons share (or lack) one or more basic amenity, such as a WC, personal washing and cooking facilities

◾A converted building containing one or more units of accommodation that do not consist entirely of self-contained flats. (There is no requirement that the occupiers share facilities)

◾A converted building consisting entirely of self-contained flats, where the building work undertaken in connection with the conversion did not comply with the 1991 Building Regulations and more than one third of the flats are occupied under short tenancies."

Again, I assume that your flat conversion has planning permission and completed building regulations as above.

Rob Crawford

18:08 PM, 30th August 2014
About 4 years ago

Hi Warner, from what you are saying it sounds to me that your Local Authority are fishing by sending letters out in a speculative bid to identify HMO's. Has the building always been three self contained flats or is it a conversion? If the latter I would check that building regs have been complied with and if ok send a letter back to to the LA, as suggested by Mark, and ask them to define on what basis they feel it qualifies as an HMO. If you cannot trace building regs etc send the letter anyway.

Tony McVey

20:28 PM, 30th August 2014
About 4 years ago

I agree with previous comments. The building appears to be a s.257 HMO and,
as such, it is not licensable.

Warner Beekmeyer

9:05 AM, 1st September 2014
About 4 years ago

Thanks for the comments so far which are very helpful. I purchased the flat about 8 years ago after it had undergone a conversion from a large house into in to the separate flats. There is a communal front door and hallway, otherwise each is self contained with it's own front door and all the normal ammenities My solicitor did not raise any issues at the time of purchase so I am not aware of any planning/regs issues. Each of the flats appear to be let through various agents from time to time. Where I have had a void period I have been sent a council tax demand and paid this, otherwise the tenant/s have paid it which I believe is quite normal.

The council in their letter also said that they have written to the other leaseholders and also recommended that the leaseholders formed a management company who would be responsible for the HMO licence.

I plan to write to the council to seek clarification and set out the position as I believe it to be (thanks for the comments).

Once I get a response, hopefully the right one can share this also.

matchmade

12:51 PM, 1st September 2014
About 4 years ago

Reply to the comment left by "Warner Beekmeyer" at "01/09/2014 - 09:05":

Warner, May I suggest you first speak with the Planning and Building Control departments at your council, to establish the facts before writing to them? There should be a planning permission number for the conversion, including plans and comments by the planning officer, which should help your argument that these are separate flats. The plans should be online if they are only 8 years old: try searching the address at your council's website or the Planning Portal.

Building Control documents are not generally available online, so either visit their offices or ask the duty officer to look up the inspector's reports. A planning permission number will help them, so get that first.

Mark Alexander

13:16 PM, 1st September 2014
About 4 years ago

Reply to the comment left by "Tony Atkins" at "01/09/2014 - 12:51":

Thanks for getting involved.

NOTE FOR WARNER - listen to Tony's advice, he really knows his stuff in this area 🙂
.

Warner Beekmeyer

15:37 PM, 12th September 2014
About 4 years ago

I have just heard back from the council as follows:

They say that the Section 257 applies and that they have checked with Building Control and can find no record of a conversion and hence no completion certificate.
Also, that the property (I assume the house) is less that 2/3 owner occupied.

Further, the say that the property is needs to be licensed under the Additional Licensing scheme, not to be confused with Mandatory Licensing scheme.

My first question relates to the conversion, should this not have been picked up by the solicitor? I have just read a document relating to the requirements for HMO managers and it does seem quite extensive?

matchmade

16:18 PM, 12th September 2014
About 4 years ago

It would seem self-evident that the solicitor would check not only the freehold and leasehold title arrangements, but also that the flat had been converted legitimately, with full planning permission and building inspection. To me it is almost inconceivable that there isn't a planning history if the conversion was only done eight years ago, but I suppose it is possible a builder just slapped in some new kitchen and bathrooms, heating systems and new front doors, then instructed the Land Registry to create a new freehold and leaseholds, and Planning and Building Control knew nothing about this. If so, your solicitor has really let you down, because if there's no planning permission, you could be in serious trouble.

But if that's the case, who have you been paying council tax too all this time? If council tax and formal addresses have been assigned to each flat, from my experience (I have built and sold a new apartment block and collection of flats) the Valuation Office Agency and the Street Names and Numbering department at the council always check first that the flats have planning permission.

Also, if the conversion was only done 8 years ago, you would normally expect to get an architect's new-build warranty or a warranty from NHBC or Premier Guarantee on the apartments. These warranties last 10 years, so your solicitor should have expected to receive one of those as well.

Are there really no records in Planning or Building Control? It is possible for documents to be misfiled or lost.

The whole situation does seem odd to me: is your Planning department on some sort of fishing expedition, checking every multiple-unit building in the borough in the hope of identifying potential HMOs?

I think you need urgently to take some legal advice as well, to review your original conveyancing paperwork and see what is actually known about this property, and to assess whether the council is acting properly regarding the Section 257 notice.

Was the freeholder a management company or an individual? If a company and it is in administration you should be able to find out from Companies House who currently handles its assets. It may be a bankruptcy administrator, or if may have been sold on. You need to find out quickly because if it's been sold on, who knows what they might try to do in terms of increased charges.

Find out who the other leaseholders are too: you need to work with them and ideally buy the freehold yourselves, so you can control this. See http://www.leaseholdlife.info for some useful information on leasehold issues.


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