Is this an HMO?

Is this an HMO?

10:54 AM, 20th February 2019, About 2 years ago 43

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I would appreciate your thoughts on whether the following will constitute an HMO:

My husband and I would like to buy a flat and rent out 2 of the rooms to 2 separate people. We would use a third room for ourselves from time to time when we are visiting London.

We would share the kitchen but may have an en-suite.

As we would still only have 2 tenants then there is no HMO as we would only be visiting the flat?

This would not be our principle private residence so we cannot have the 2 occupants as lodgers.

Thanks for your assistance.

Marie

Editors Note:

From .Gov >> https://www.gov.uk/renting-out-a-property/houses-in-multiple-occupation-hmo

Houses in Multiple Occupation (HMO)

If you let your property to several tenants who are not members of the same family, it may be a ‘House in Multiple Occupation’ (HMO).

Your property is an HMO if both of the following apply:

  • at least 3 tenants live there, forming more than one household
  • toilet, bathroom or kitchen facilities are shared

A household consists of either a single person or members of the same family who live together. It includes people who are married or living together and people in same-sex relationships.

Licences

An HMO must have a licence if it is occupied by 5 or more people. A council can also include other types of HMOs for licensing.

Find out if you need an HMO licence from your council.



Comments

by Mike

14:51 PM, 25th February 2019, About 2 years ago

Chris it is pretty grey area where an HMO is also your second home, where you can come and go as and when you want because that is how it is, tenants are aware of it, or they took their tenancy on that bases, that I the landlord also occupies two of the rooms, and have just as much right to share the common facilities and garden and so on, except I have no right to enter or even peek into their rooms, and unless invited by them, I do not just budge in whenever I want into their rooms.

by Chris Baker

16:23 PM, 25th February 2019, About 2 years ago

Hello Mike,
Thank you for your response, all laws tend to have grey areas, Ive lived most of my life in a grey area.

I don’t wish to muddy the original question by Maria with the second home aspect. So just to clarify:

My point is:- HMO or NOT HMO
The legislation that I gave states words to the effect that:-

if a person who occupies a shared property also have another residence or another Main residence then they are NOT countable for the purpose of forming an HMO.

If there are no other factors that override the above;

Then potentially if you have five persons sharing (which on the face would require a licence if it was an HMO) if all of them qualified as NOT countable for the purpose of an HMO (as above, ie. they all went home to there partners and children to a property they pay all the services on) in such a scenario then you don’t even have a HMO.

Equation:_
Persons occupying the property = FIVE
Persons who count for the purpose of an HMO = NIL

Equals NO HMO as the licenses only apply to HMOs NO Licence requirements.

Right? or not?

Regards kris

by Darlington Landlord

17:43 PM, 25th February 2019, About 2 years ago

Anyone else having the problem that they click on latest comment and end up at a previous page? I've had this in a lot but not all articles in the last week or so and have no idea why

by Neil Patterson

18:46 PM, 25th February 2019, About 2 years ago

Hi everyone,
Very sorry there was a wordpress update that has knocked out the system taking you directly to the comment. Our IT are working on a fix but unfortunately it is taking some development time and should be up and running soon.

by Mike

23:04 PM, 25th February 2019, About 2 years ago

Chris, to me it is a clear cut case that Maria's case, it cannot be an HMO, since she only two tenants and not three, and she cannot be a tenant even if she and her husband lived there, or if they only visited and stayed in their room even though they are not sharing tenant's bathroom but they are sharing Kitchen facilities with them , so they cannot be the third tenant as they are not a tenant.
You are the owner/landlord, clear cut in her case, does not your council understand simple and plain English? or is it being run by aliens from outer space?
You do not need a licence, and if your council takes you to court, they are likely to lose this case, they will.

by Mike

23:11 PM, 25th February 2019, About 2 years ago

Not enough time to edit, I was trying to edit and time expired, Mark we need a longer time to edit please. may be 10 minutes please.

by Chris Baker

11:15 AM, 26th February 2019, About 2 years ago

Hi Maria,

Can you state the legislation that proves your statement, "This would not be our principle private residence so we cannot have the 2 occupants as lodgers."

Regards kris

by Highland Lass McG

11:46 AM, 26th February 2019, About 2 years ago

Reply to the comment left by Chris Baker at 26/02/2019 - 11:15
Hi Kris
I always assumed you could only have up to 2 lodgers if it was your principal private residence. Otherwise they would be tenants with assured shorthold tenancy agreements.

The following government website seems to confirm this:

https://www.gov.uk/rent-room-in-your-home

'Becoming a resident landlord
You’re a resident landlord if you let out part of a property which is your only or main home.'

Marie

by Chris Baker

12:03 PM, 26th February 2019, About 2 years ago

Hi Mike,

I cant write down here what i think my council managers are, but they are certainly a law unto themselves. I on the other hand, I am (for now) still licking my wounds from the same beatings many of us are taking, I currently don’t have the will to fight them on my own.

I have now heard that the council solicitors have backed up council belief that every person is countable. I have asked them for, both a copy of the question they asked and for a full reply of the solicitors response, (i don’t know if they will give this) I am also meeting with the managers involved this Friday.

As I have said, even with the councils solicitors findings, I am not (Nor do I intent to put myself ) in breach of any HMO or licence requirements.

What I wish to do is force the council to act within the legislations "standard test" for what is an HMO and what persons count.

It could be that the council asked their solicitor the wrong question.

I need some big guns behind me, Larry (of the Landlord Alliance) is looking into this. Help from anyone who can point out any legalities would be appreciated.

Potently, getting this clarified could benefit landlords with HMO/licence woes across the country. If the laws (that I stated above) regarding who is countable in an HMO then provided the number of people that do count are kept to the maximum of two then the property would not even full under the councils control nor would it be a licence.

I am not suggesting this a way to dodge the safety factors that come with HMOs I personally do more than my council ask in any case.

If anyone can arm me with favourable case law this could be very useful.

Regards kris

by Chris Baker

13:23 PM, 26th February 2019, About 2 years ago

Hi Maria,
While the status of if you have tenants or lodgers is besides your point of question as to would it be an HMO or not.
if you have ever rented out a property on a standard let basis and had bad tenants you may already have learnt tenants have extensive legal protection, it bad enough when they are in a property separate to you, It could be an absolute nightmare if you found them horrid to live with, getting them out could take months, the benefit of a lodger is you are legally able to kick them out with reasonable notice, if they were violent reasonable could be deemed 30 minutes.

Whether you issue documentation stating its a licence or tenancy could in some cases be irrelevant in court.
However if the document states it one or the other then outside of court this is likely to be treated under the title it states. My advise would be that you give yourself an edge by not issuing a tenancy agreement and instead seek an alternative, Mike as said its a grey area, this can work to your advantage.

As you are married, possible you can allow your existing home you one of you and the new purchase to the other, there is no capital gains between married couples.

You did say if you intended to get a mortgage, if you do, this could put restriction upon the type of let you can, or otherwise you breach lending conditions.

I have business bank loans that don’t care how I use a poverty as long as keep-up with payments. some mortgage lenders may also not be concern, but generally B2Ls don’t allow you to live there.

If you were to a personal mortgage you might be restricted on renting to tenants whereas renting to lodgers is likely to be okay.

if its a cash purchase it makes life a bit easier.

If you were to buy for cash and did allocate it to one of you and claimed it to be the main residence ( which I believe is legal although there is some recent case law that defined duration of occupation) then only offer your 2 rooms to lodgers on a licence basis, you may be instilled to rent a room relief which is currently £7500pa.

In regards to HMO or not, I agree fully with Mike, but with the issues i am currently facing. I would point you to seek confirmation in writing of your proposal direct from the head of your council department that deals with HMOs, (of the area you intend to buy within) Because; as you may be seeing that despite statutory legislation my council choose to ignore that certain persons are not legally countable and yet they are stating they are. if I wish to fight this it means going to court.
Therefore with a mind as to what the law states if you get written clarification direct from your before you even consider going further, you should at least be safe to proceed by their interpretation and with you eyes wide open.

Have you considered a holiday let? if not why not put some thought into this, the interest is still fully claimable against tax, there are no tenant issues, if you find a good holiday letting service and seek their advise, they can take care of the high work load of change overs and maintenance and regulation requirements (The high rental is a long way from the net profit so don’t get carried away) there will be vacant periods which means you can grab some time there yourselves.

Regards kris


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