HMO rules – What is the worst case scenario for me?

by Readers Question

8:44 AM, 5th October 2016
About 2 years ago

HMO rules – What is the worst case scenario for me?

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HMO rules – What is the worst case scenario for me?

I have a tenant who for the past year has been really playing up with his rental payments and thus used one excuse or another to pay late – sometimes months etc. worst

Now he owes more then 2months rent (Aug 19th and Sept 19th) he has now refused to pay saying that he has informed the Council (Camden) and they will be coming to have a look at the flat – which I’ve currently let out on a room by room basis. Total of 6 rooms (4 bedrooms and convtered the large living room into 2 rooms) of which 1 is small and only has windows looking into the flat hallway – so no external windows).

I’m now having done research assume this will be a BIG PROBLEM? – also he says that the living room removed was illegal? All I’ve done is convert the large living room into 1 large and 1 small room. The other 4 rooms are actual bedrooms. So I have 6 people in the flat. Sharing 1 bathroom and 1 separate Toilet. 1 Kitchen.

What is the worst case scenario for me – will I be prosecuted or can I apply for a licence now and pay any fines and do any repairs which the council say. I know this tenant has used this as a hammer so he does not have to pay me rent which he owes. All my other tenants are all fine and up to date. He also plays loud music at late night – the council have had to come in once or twice to speak to him, neighbours have also complained. He also had a fight with one other tenant in the flat over washing left in the machine, police were called etc. Hope someone can advise me what it is I need to do now.

P.S – also we used to live in this flat and the mortgage lender who remained the same was not informed that the property was LET – so I assume that’s another issue which I will have to deal with either by SELLING the flat or re-mortgaging. As I’m sure the lender will not accept HMO lettings even if I was to request CONSENT TO LET?

Thank you all.

Faiza



Comments

Neil Patterson

9:04 AM, 5th October 2016
About 2 years ago

No licence, a room with no window, 6 to a bathroom and breach of mortgage contract.
I think you just need to hands up and accept mistakes straight away.

If this was originally a residential mortgage you need to be prepared to remortgage to a BTL lender that allows HMOs, but they will only consider it once you have your licence.

Extra responsibilities of HMO landlords

Landlords of HMOs must make sure that:

proper fire safety measures are in place – for licensed HMOs smoke detectors must be installed
annual gas safety checks are carried out
electrics are checked every 5 years
the property is not overcrowded
there are adequate cooking and washing facilities
communal areas and shared facilities are clean and in good repair
there are enough rubbish bins/bags

Is your home a house in multiple occupation?

Your home is probably an HMO if:

three or more unrelated people live there as at least 2 separate households – for example, 3 single people with their own rooms, or 2 couples each sharing a room
the people living there share basic amenities – for example, a kitchen and/or bathroom

An HMO could be:

a house split into separate bedsits
a shared house or flat, where the sharers are not members of the same family
a hostel
a bed-and-breakfast hotel that is not just for holidays
shared accommodation for students – although many halls of residence and other types of student accommodation owned by educational establishments are not classed as HMOs

Landlord penalties for not having an HMO licence

If you live in a HMO that should be licensed but isn't, your landlord can be fined and ordered to repay up to 12 months' rent (or housing benefit to the council).

Many people living in HMOs have an assured shorthold tenancy. If you're an assured shorthold tenant and the HMO should be licensed but isn't, any section 21 notice (two months' notice) your landlord gives you is not valid.

How to complain about an HMO landlord

Contact the environmental health department of your local council if you live in an HMO and you don't think your landlord is following these rules.

The council can do an assessment using the Housing Health Safety Rating System. This assessment looks for specific hazards in the home. It allows councils to take action against landlords whose properties are dangerous.

The council can prosecute landlords of HMOs, or any manager they have employed, if they break the law. In extreme cases, the council can take over the management of the property.

Faiza Alia

11:15 AM, 5th October 2016
About 2 years ago

Hi thank you for you reply.
Can I NOT carry out any works the council says are needed (if any) I have the GAS certs you mentioned. The flat is clean. I've never had any tenant complain at the 1 bathroom etc separate toilet issue but I guess the council will draw their own conclusion.
Can I not get a stay of execution so to speak and just revert it back to a normal dwelling. The agreements I've given the tenants are a ROOMSHARE AND HOUSESHARE AGREEMENT and not an AST. It states on the agreements that 4weeks notice is only required for either party to terminate the agreement etc.
It was downloaded from LANDLORDZONE website years ago and I've been using this. The room does have a window but yes it is notfacing into the outside of the property but inside the flat. It is big enough etc to house a single bed, wardrobe, storage etc.

But I think my post was - am I looking at going to prison for this?
Can I not sell the property if the worst case scenario.

matchmade

15:08 PM, 5th October 2016
About 2 years ago

Faiza - the tone of your messages suggests you are in danger of panicking. There's no need for this. From the sound of it, you are running a crowded but not unhygenic flat, with proper gas certification and hopefully you have complied with the rules on non-flammable furnishings too. You may be fined and will need to get some improvement works done, but you're not in danger of going to prison.

Your main problem is your mortgage, as you are in breach of your mortgage contract. You need to switch to an HMO mortgage as soon as possible, before your current mortgage provider finds out. As Neil comments, this means you need to get an HMO Licence, and get it quickly.

You will also definitely run foul of the HMO regulations in Camden, which are at https://www.camden.gov.uk/ccm/cms-service/download/asset/Minimum%20HMO%20+%20hostel%20standards%2010%20May%202016.pdf. For starters, you don't have enough bathrooms: Camden requires 2 complete bathrooms if you have six tenants. If you drop to five tenants, you will be OK with the one bathroom and one separate toilet. The Council may however require you to have a basin in every room: it all depends on the specific layout of the property and what is practical. There are also a whole load of rules about the sizes of the rooms, the bathrooms, the facilities in the kitchen and so on, so you need to see if you meet those and whether you are prepared to invest in bringing the property up to the required specification.

I recommend you don't act hastily, start giving notice to your tenants and revert the property to a single-occupancy dwelling or sell it, because you are in danger of then being accused by them of making a retaliatory eviction, which is illegal. It's probably too late to start evicting your tenants before the Council visits anyway, as they need at least a month's notice.

I would read up the Camden regulation on HMOs on their website, and perhaps have a chat with Environmental Health (the Council) before they come out, so you can identify the likely areas of concern and start making changes in advance of their visit. They are not going to "execute" you, but will inspect the property and send you a list of works that must be done before they issue a licence. They may fine you for not being licensed, but if you cooperate, appear anxious to comply with the rules, and start work as soon as possible, all this will put you in their good books and reduce the likely level of fine. The heavy fines tend to be incurred by landlords who cram 20 people into a 4-bedroom house, have bare wires hanging everywhere, poor hygiene, fail to attend meetings, and generally do a disappearing act.

Also, Camden's licensing scheme has only been operating since 8 December 2015, so you haven't been running a non-licensed house for *years*, and you can probably claim ignorance - though they will still probably issue some kind of fine. See their guidance manual at https://www.camden.gov.uk/ccm/cms-service/stream/asset/HMO%20Application%20form%20guidance.pdf. You could get the ball rolling and apply for a license now, again to show you are cooperating - details of how to do this are in the Guidance PDF.

From the sound of it, you should be OK with some relatively minor changes. I would drop the number of tenants to five, and the simplest way to do that is to lose the single bedroom. The Council will not be happy with a room that has no external ventilation, so you can solve that problem as well as the bathroom issue in one go.

Sally Tattersall

17:05 PM, 5th October 2016
About 2 years ago

I would agree with the points that Tony and Neil have made above. In addition, I would make sure that you have complied with fire safety measures as a matter of urgency - if there was a fire and someone got hurt (or worse) you would be facing a prison sentence. Make sure the place is safe.

Faiza Alia

20:29 PM, 5th October 2016
About 2 years ago

Reply to the comment left by "Tony Atkins" at "05/10/2016 - 15:08":

Thank you everyone for all your help and advice.

I really do appreciate it.

H B

20:37 PM, 5th October 2016
About 2 years ago

Now that the authorities are involved I would make sure that your tax affairs are in order - ie rental income has been declared.

You have made a number of oversights in setting up this property and you might have also forgotten to declare your income. No idea if you have, but a massive fine and a criminal record would be avoided if you make an open declaration.

21:47 PM, 5th October 2016
About 2 years ago

Have you got the Council Tax registered in your name as landlord ?

Craig / lgfa92

Ian Narbeth

9:38 AM, 6th October 2016
About 2 years ago

Faiza
You refer to the property as a flat. Is it part of a building that has three or more storeys (including basement)? I.e. Basement ground and first or first second and third floors, If so then you should have been licensed as an HMO anyway even if your flat is only on one floor level. Have you installed fire doors, door closers and a suitable hard-wired fire alarm system which has been tested weekly?

If the Council take action you may be liable for a Rent Repayment Order and have to refund your tenants some or all of the rent for the past 12 months. See e.g. https://anthonygold.co.uk/latest/blog/a-guide-to-rent-repayment-orders-and-what-they-are-1-1
which explains the issue. (I have no connection with the authors of this article.)

If you should have been licensed but are not, you need to try to stave off the Council prosecuting. This is going to cost money. Basically you will have to do everything the Council ask and not argue the toss about anything. Even if, as some Councils do, their requirements seem excessive it will be best to comply.

You also need to check the buildings insurance. Do you insure or does the landlord? Do the insurers know you are operating an HMO? Almost certainly they will require that a licence is obtained if it is legally required.

Finally, I suggest you urgently get some training about landlords' obligations. You have clearly blundered in a massive way. Sorry to sound harsh, but inexperienced landlords who break the rules unintentionally (especially those relating to fire safety) are one of the reasons there are ever more onerous rules that the rest of us have to comply with.

Faiza Alia

10:21 AM, 6th October 2016
About 2 years ago

Reply to the comment left by "H B" at "05/10/2016 - 20:37":

Hi yes the tax is declared. At least I got this right. Many things wrong I agree. Just another question folks please if I may.

Can I not give the TENANTS say 2months notice if I was to revert it back to single dwelling etc. Would the council object to this.

Faiza Alia

10:36 AM, 6th October 2016
About 2 years ago

Reply to the comment left by "CouncilTaxGuy " at "05/10/2016 - 21:47":

No that is in my mothers name. I will do that now. Thank you.

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