HMO Licensing Fees – Oxford Council Humiliated

by Mark Alexander

8:00 AM, 17th November 2012
About 8 years ago

HMO Licensing Fees – Oxford Council Humiliated

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HMO Licensing Fees – Oxford Council Humiliated

HMO Licensing FeesFurther to my rant about HMO Licensing Fees on 16th October one of my readers decided to submit a Freedom of Information request to Oxford Council based on the questions I raised and has forwarded the response to me.

As you may be aware, Oxford were one of the first Councils to implement both Article 4 planning and Selective Licensing. They now require all landlords to pay a fee to licence each property they own which is let to three or more tenants.

The response to the Freedom of Information Request from Oxford Council makes very interesting reading and I’ve copied it below for you. The questions are written in this colour, the Councils answers are written in this colour and my analysis (or should I say continued rant) is written in this colour – not that I’m seeing red or anything !!!

Further to the acknowledgement below, I can now respond to your FOI request of 17th October 2012 as follows:

Q1.  How many HMOs are there?

There are an estimated 5,069 HMOs in Oxford.

I wonder how you arrived arrived at that figure? However, for the purposes of this exercise let’s assume it is correct.

Q2.  How many HMOs have been licenced?

Since 24th January 2011, the Council has received 2,541 applications and it has issued 1,397 licences.  551 HMOs were licensed already under the national scheme.  Therefore, 1,948 HMOs have been licensed.

OK, so that’s 3,121 which remain unlicensed? That’s over 60% of the estimated total isn’t it? 

Q3.  How much money has been collected from HMO Licensing?

Since 24th January 2011, a total of £1,046,392 has been received in fees.

Mmm, saved a few jobs at the Council then!

Q4.  How many HMOs have local authorities closed down due to being unsafe or unlicensed?

The purpose of licensing is not to close down HMOs, but to bring them to the legal minimum standard.  To date, over 90% of the HMOs the Council has inspected have required additional works to bring them up to the required standard.

If an HMO is in poor condition, legal action will be taken against the landlord.  If an HMO is in a very poor state of repair, the Council will serve legal notices and will require the landlord to carry out emergency works.  If the landlord fails to undertake the necessary works, the Council will carry out the work and charge the landlord.

Actually, that’s almost pretty reassuring to know – well done Oxford Council 🙂

The Council does not close down unlicensed HMOs when it discovers them.  It will require the landlord to apply for a licence and charge an additional fee of £170 to cover the costs of finding the property.  In addition, legal action may be taken for failing to licence the HMO.

Only £170, that’s not much is it?

The Council took over the management of one HMO that was in poor condition and where the landlord failed to licence the property.  The Council ran the property for a year and then it was handed over to a letting agent.

Again, quite admirable, but only one? This kinda proves there wasn’t a very big problem in the first place does it not? Apart from creating “jobs for the boys”, one might wonder what the purpose of collecting all this money was given the extent of the problem, or should we say lack of one?

Q5 & 6.  How many fines have been imposed on landlords operating unlicensed HMOs and what is the value of these fines?

Since the introduction of the Additional Licensing Scheme in January 2011, the Council has successfully concluded 26 cases of legal action, resulting in £28,703 of fines and costs.

So out of 3,121 unlicenced properties (presumably a lot more than before the 26 court cases started to be reported?) only 26 have resulted in fines? That’s less than 1%. Therefore, the remaining 3,121 unlicensed HMO landlords are risking a £170 fee IF they get caught and a less than 1% chance of prosecution leading to an average fine of just over £1,100 if my maths is correct!   

Q7.  How has the money raised as a result of the HMO licensing and fines been spent?

The HMO licensing scheme is self-funding and the fees raised cover the costs of managing and administering the scheme, including the inspections, reports and licences.

So the money raised is primarily used to raise the money then? Pure genius! One wonders why you guys chose to work in the Public Sector as opposed to the productive economy?

And there has been only one case to justify the introduction of licensing in nearly two years? !!!

The Government and not the Council collects the fines.  Therefore, the Council does not raise any money by taking cases to court.

OUCH! I feel your pain on that one. Not much incentive to spend all that money you collect to actually pursue the none payers then is there? You might as well spend it on PR to publicise the one problem you found and the 26 people you fined then! You never know, you may inspire a proportion of the 60% who are not paying you and collect another million or so to save a few more jobs. Next you will be telling us that this model is good for the economy because those people whose jobs you are saving spend their money in the economy and pay tax???  YEAH RIGHT!!!

YEP, HMO Lcensing Fees is definitely a case of “jobs for the boys” in my humble opinion!

The reply from Oxford Council came from:-

Michael Newman – Corporate Secretariat Manager, Chief Executive’s Office, Town Hall, St Aldate’s, Oxford OX1 1BX



Comments

Mark Crampton Smith

8:56 AM, 21st November 2012
About 8 years ago

It is also worht noting that they have issued 40 licenses with a condition not to use a bedroom.......if they are about half way through the licensing process, we might reasonably assume there will be a net reduction of 80 rooms in a city whre there is already a chronic shortage of shared accomodation. It might be a good time to buy an HMO in Oxford as their capital value, as a product of scarcity, is likely to increase considerably over the next few years.

Mark Alexander

9:59 AM, 21st November 2012
About 8 years ago

Hi James

Overcrowding can be dealt with under laws which have been around for years, as can every other health and safety issue I can think of. The Councils are using propaganda to create new rules to increase stealth taxes, that's the truth of the matter. They could simply implement the old rules but they prefer to increase stealth taxes than drive efficiencies to find themselves. Environmental Health Officers can condemn any property, with or without licencing, if it's unfit for human habitation or is over crowded. They will not do it though - WHY? - because the Council are then responsible for re-housing the occupants!

10:57 AM, 21st November 2012
About 8 years ago

Great - so if councils try and fine you - offer them 'less or see you in court ' - where they have less accessto the readies. Mind you they seem to have a bottomless pit of legal money
(direct from gov?) and they still collect the fine and victim charge presumably.
Do councils need licenses to operate HMO monitoring schemes. They should buy
them off landlords who would get to meet 'the council team' who should in turn expose
their wages. This reading above is all good, but go the whole hog - expose
their wages - go on i dare you - get their addresses and pictures of their
families while you’re at it. We landlords do very generous protection rates. For the
sake of my Sicilian friends - I jest of course.

11:16 AM, 21st November 2012
About 8 years ago

Do councils actively look for article 4 breakers or do they rely on neighbours piping up.

I have been told from the horses mouth that they do not actively check records, this would only ever be raised to the planning dept like any planning issue (whereupon records would be checked)

I have also been told that 4 peops in, next time 3 peops, next time 0 peops, next time 4 peops

is fine. But if the 0 were 1 it would not be fine.

To these 2 points ... I simply do not know the real truth.

Joe Pearson

16:30 PM, 16th August 2013
About 7 years ago

Reply to the comment left by " " at "21/11/2012 - 08:50":

There are already a number of measures in place in terms of health and safety to regulate the Private Rented Sector (smoke alarms, gas certificates etc etc), HMO licensing is ONLY a money grabbing scheme by the Councils in order to fill the financial gaps created often by their incompetence in managing money.

This is the case for Haringey Council, who is now trying to extend the HMO licensing to all types of HMO (less than 3 storeys). They are doing a so-called consultation -of course in the summer months when nobody would notice- on their website where the questions have been crafted in such a way that anyone filling it is swayed towards agreeing that "improving standards" would be the consequence of the Council benevolent meddling and intervention, nothing else...

I wrote to my tenants and explained to them that that the impact of thie HMO licensing will be higher rents and less choice for them. I am not only concerned by the cost of the license but also by the spurious changes that they will require: Leeds introduced licensing for all properties a couple of years ago. A friend of mine owned a property there that was yielding only £350 a month. The council inspected her property and asked her to make 34 changes costing her more than the yearly rent -and she is not a rogue Landlord-, some of the changes required were totally spurious. After paying the license fee, making the changes and losing the money, she ended up selling that property!

I have asked my tenants to fill the survey of Haringey Council and tell Haringey Council that they did not want HMO licensing.

Please warn your readers about this, especially if there are any landlords with HMO in Haringey. These landlords should ask their tenants to fill this online questionnaire that can be found on Haringey council website and these landlords should explain the potential consequences to their tenants.

If they go ahead with this licensing scheme, I, for one, will convert my shared houses into single units: the yield for HMO is higher for a good reason: there is a lot more work in lettings and management to do than for a single unit. If the costs and the aggro resulting from council meddling rise further, I AM OUT! Then the Council will have to find the resources of housing my perfectly decent tenants, but they are all on low wages and an only afford to pay around £400 a month for a room...

Mark Alexander

16:43 PM, 16th August 2013
About 7 years ago

Reply to the comment left by "Joe Pearson" at "16/08/2013 - 16:30":

You may also want to read and get involved with these discussions ....

Landlord Licensing Schemes – Raising Standards or Raising Funds? - see >>> http://www.property118.com/landlord-licensing-schemes-raising-standards-or-raising-funds/42155/

Alternatives to Landlord Licencing Schemes >>> http://www.property118.com/alternatives-to-landlord-licensing-schemes/42246/
.

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