Illegal HMO- Do we advise Council?

by Readers Question

12:36 PM, 16th July 2019
About a month ago

Illegal HMO- Do we advise Council?

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Illegal HMO- Do we advise Council?

Dear all, just need some guidance. In summary we gave our house to a rent guarantee company back in 2018. It has turned out to be a big mistake as we have received very poor service and most recently they have stopped paying us rent. We were informed that it would be let to a family as part of the agreement we had no control over the tenants living there.

At an inspection made by us back in April we found out that it was being used as an HMO and it is clear that the rent guarantee company has not applied for or have proper licence in place. They have now stopped paying us rent and no longer in communication with us. We are now going through the legal channels.

At the April inspection, we met the individuals living at our property and took their contact details and they were actually being not treated well by the rent guarantee company and had many complaints.

We have now managed to to get them to stop paying rent to the rent guarantee company. Long story, but leaving that aside, the question is the issue of an illegal HMO and I believe as the property owners we are responsible to have a property HMO licence which we have not

To protect our interests, the question is would it be advisable to contact the council and inform them of the events and what has happened and no HMO in place? This in my opinion this would be in our interests as we have told the council before they find out form some other source. After this we can I suppose get some time form the council to sort ourselves out and plan ahead what to do.

Many thanks for your help.

Martin



Comments

Neil Patterson

12:41 PM, 16th July 2019
About a month ago

Hi Martin,

I would say it is better the council do not find out on their own.

However, as some councils can be very heavy handed I would seek legal advice and representation first.

Maybe worth checking out Paul Shamplina and his legal team at Landlord Action as they will have run across most scenarios before.

Adam Hosker

13:09 PM, 16th July 2019
About a month ago

You are responsible for the property, not any agent (rent guarantee or not). You should probably seek legal advice and let them inform the council. What your next actions will be, etc..

Mark Alexander

15:57 PM, 16th July 2019
About a month ago

I agree with Neil and Adam

Regina Baidoo

10:09 AM, 17th July 2019
About a month ago

I have a similar situation.
I contacted my Council straight away and told them I was concerned about the health and safety of the tenants at the property. I made sure that this was in writing that I told them by sending email. I also told them I have told head tenant to stop this immediately.

This means they have an obligation to ensure that the tenants are safe. This can have two outcomes, they will tell you that it’s your responsibility to ensure the safety of the tenants or that they go there and ask tenants to leave. If that’s what you’re after.
They said it was my responsibility and that I should do all the risk assessments.
This means that I should not be foul of all the landlord obligations for single let such as EPC, Electrics, Fire, Risk Assessment, deposit protection, insurance. By already having all this in place, if Council came and did risk assessment, I had met your obligations.
I got the 3 month extension which could be extended if proven eviction in process for breach or works to comply with licence.

Because you have told them, they may very likely give you an exemption to the licence for 3 months to put things right. Within this period you could terminate tenancy agreement due to breach.
- Section 8 - Ground 2 - property subject to Mortgage which does not include HMO
- Section 8 - Ground 6 - Landlord can take back property if they need to do vast repairs.
- Section 21 - Breach of tenancy Agreement: tenant not his/her immediate family live at the property.
- Section 21 - not to use premises for business
I’ve served notice for both Section 8 and Section 21 so if Section 8 fails there’s hope for Section 21.
It’s very stressful and wish you best. Do risk assessment.
Good luck

Regina Baidoo

10:24 AM, 17th July 2019
About a month ago

Reply to the comment left by Regina Baidoo at 17/07/2019 - 10:09
I forgot to add that the £30K fine per offence is a real possibility so the sooner you act the better. The tenants could also report you and then you would very likely be fined so my suggestion is to act fast to avoid possibility of being fined. You could also contact Landlord Action for advice and legal help.

steph3910

10:33 AM, 17th July 2019
About a month ago

my council were really good about it they gave us time to sort the alterations. you will need fire doors with a closer on each bedroom, with locks that can be opened from the inside without a key. turn button locks is what we fitted. smoke alarms in every room and facilities for the number of people in house. ie fridges and cooking. better that they hear from you than it gets reported as you are still liable but they will take things into account. but you do need to make the house safe for those living there and your piece of mind. Also if you rent it as an HMO you have more access to it and control over the people in it.

Rob Crawford

13:08 PM, 18th July 2019
About a month ago

Hi Martin, I assume you have confirmed the property is an HMO that does requires a licence? If so you as the owner will be held responsible, especially now as you are not employing an agent. The property is likely to require some work (fire doors, smoke detectors, emergency lighting etc). This will take time and during this period you may well be reported to the council by a tenant or neighbour as an illegal HMO and could face some large fines. As such I would write to the council (PRS Depth Head) and explain your position. At least then it's in the open. Request that they inspect the property and advise you on what is required. You can then agree on time scales etc. Asking for help should hopefully soften their response. The rent guarantee company should also be reported as a rogue agent (others maybe in in a similar position as you), this will help the council investigate them to ensure compliance with agent legislation.

Phil

9:31 AM, 20th July 2019
About a month ago

Suggest you get in touch with Des Taylor at Landlords Defence this is his area of specialism. help@landlordsdefence.co.uk

Des Taylor Landlords Defence Ltd

10:13 AM, 20th July 2019
About a month ago

it is a long post reply please do read it as it is important.

The Tenancy would not be an AST with the company. So all the S21 and S8 etc would be wrong. It may be a sham agreement that has been made and definitely in breach.

There are a number of procesess to follow which from the information I've read so far have not been followed.

Additionally there are ways and means to approach this properly with the council.

Do not go in half-cocked or thinking you know best. This normally backfires.

There are ways to deal with this and dates and full information is important.

Please contact my office on Monday. Let us gather some facts from you and then the plan of action will be clear.

My daily work is dealing with situations like this and this will be I think the 6 this year I have dealt with and we deal with them very successfully.

Remember the occupants have rights that you have not given them the subletter has given some too and you need to be careful about how you go about what you do and that you do not end up getting in trouble yourself for the things you wish you never had done.

Very happy to report back here how we solved it once it's been solved.

If you don't want to engage with me, whatever you do do not issue section 21 and section 8 to the tenants or to the subletter.

John

17:53 PM, 21st July 2019
About a month ago

Unfortunately I am in the very same situation with a property in Colchester which was rented out since February last year.
The introduction of this Company was made very strongly by the estate agents in Colchester and only later did I realise the reason for the strong introduction and persistent pressure from the estate agent as they apparently introduced this company to atleast half a dozen other unsuspecting landlords in the area. The agents indirectly benefit by having the rent collection percentage collected off the collected rent.
In any case the whole thing has been a disaster.
Of the last 16 months only two rental payments were made on time and all the others were delayed.
I have not received the rental for the last three months now and the agents are now trying to say they were unaware even no it is perfectly obvious that they acted in cahoots with the company to introduce and rent collect these illegal HMO’s.
My question again in common with the original poster is whether the council should now be involved as it is obvious that both the estate agents and the company who took on the guaranteed rental have acted illegally without informing the landlord?
As it is obvious that the estate agent has acted in cahoots with the company in perpetrating this,shouldn’t they be held liable for this as well?Wonder if they can be taken to court over this?

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