HMO rooms rated as Band A?

HMO rooms rated as Band A?

13:54 PM, 10th September 2021, About 2 months ago 27

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After having gained planning permission we recently carried out a renovation of a large house into a 7 bedroom HMO with all the rooms benefitting from their own en-suite, but still having to share kitchen and lounge facilities, and all services of electric, heating and Wi-fi included in the all-inclusive rent.

When the rating officer looks at the situation, he rates all rooms as Band A, not as an HMO!

My question to other Landlords caught in the same situation which I believe are many is:

Should it be necessary to re licence it as an HMO as they are now all “self-contained dwelling units” and paying their own Band A rates does the HMO planning still apply as the rating office has surely changed the category by making them independent dwellings, or would it be necessary to apply for a change of planning to not pay the licencing fees and having all the bureaucratic requirements surrounding such properties?

Anyone with experience in this relatively new situation?

Many thanks

Martin



Comments

by Des Taylor & Phil Turtle, Landlord Licensing & Defence

15:11 PM, 12th September 2021, About a month ago

Reply to the comment left by Terry Bibby at 11/09/2021 - 22:14
That was a very specific and quirky case where the LL won against the VoA.

Sadly the vast majority of appeals appear to have failed as VoA rely on a Hereditament being a dwelling (room) with its own lease (AST)

And then they band it! (And bandit it very apt!)

by JB

21:14 PM, 12th September 2021, About a month ago

If you have students they are exempt from council tax

by Mohammed Shafiq

23:10 PM, 12th September 2021, About a month ago

Hi.

Just bought a 6 bed HMO which was previously licensed, and now been contacted by the VOA with a view to valuating as multiple dwellings. When I asked "Why me?", I got the following reply:

We were aware that extensions/ alterations had been made to your property prior to your purchase. For Council tax purposes extensions made by the current owner cannot be included until a relevant transaction, normally a sale, takes place.

We are notified by the land registry once the sale goes through and this triggers the report for us to investigate. The report was checked and at that point we became aware of the possible HMO. In view of this we have to investigate possible multiple bands.

by DSR

8:36 AM, 13th September 2021, About a month ago

Blimey - all this makes my head spin. Another reason why I will not be going near an HMO and I am sure all this will backfire at some point. HMO LL's cannot carry on with ever shifting sands surely, where you get screwed over at every turn? From what the previous poster says even if you buy an HMO that was not individually banded before, by becoming a new owner you run the gauntlet of being tracked now and collared! When will this onslaught of private LL's ever end?

by Ian Narbeth

10:27 AM, 14th September 2021, About a month ago

Mohammed Shafiq's information is very interesting. Something for purchasers of existing HMOs and purchasers of houses that have had works done to them who intend to convert to be aware of.

DSR, yes some landlords will get caught out but bear in mind:
"At the end of the day, the tenant pays for everything".

If HMOs are taxed as multiple Band A properties then either landlords will require the tenants to pay Council Tax or they will increase rents, or both.

by Mohammed Shafiq

22:35 PM, 14th September 2021, About a month ago

Just received further clarification: an application for a HMO licence can also trigger a report to VOA to look into it further.

by HNN2210

23:23 PM, 14th September 2021, About a month ago

Reply to the comment left by Mohammed Shafiq at 14/09/2021 - 22:35
How soon after HMO licence application will VOA contact landlords about banding?

by Mohammed Shafiq

23:35 PM, 14th September 2021, About a month ago

Well, I bought the property (an existing HMO) and applied for a new HMO licence at the same time, and was contacted by the VOA 6 months afterwards. With a licence lasting 5 years, potentially a new valuation could occur at that frequency.

by DSR

16:26 PM, 15th September 2021, About a month ago

Reply to the comment left by Ian Narbeth at 14/09/2021 - 10:27
but surely if the tenants LHR is capped to an HMO shared room rate, and there is not going to be any top up money coming from the tenant to pay anywhere near the amount to compensate for voids/damages (over the deposit ) and any CT band A liability for the LL, you will be always out of pocket?

by Ian Narbeth

16:53 PM, 15th September 2021, About a month ago

Reply to the comment left by DSR at 15/09/2021 - 16:26
My point is that if Band A becomes the norm in a locality, rents will rise or landlords will change their tenancy terms so that the tenant pays the Council Tax. This will make it even harder for tenants in receipt of benefits to rent.


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