Licence First – Don’t Shoot the Messenger #6Make Text Bigger
When a tenant has a beef with their landlord, I’m the guy they go to. My job is to either negotiate or prosecute, depending on the circumstances. This occasional and random series aims to let landlords know the common complaints that are made about them, the laws that cover them and how to deal with it.
I think my landlord is running an unlicensed HMO
A growing concern for local authorities this one.
Government and Shelter are leaning on councils to take enforcement action against unlicensed HMOs. What is the definition of a Licensable HMO?
An HMO is simply a property where there are 3 or more people occupying on separate agreements. If they were all on one agreement it would be a house-share as a ‘Joint tenancy’, which is not the same thing. However, an HMO becomes eligible for a license when a landlord has 5 or more tenants on separate agreements and the property has 3 or more floors.
Failing to license a proper HMO is a criminal offence.
I will probably get sacked for saying this but the fact is that in inner city areas the amount of HMOs compared to the amount of licensing officers makes 300 Spartans against 1 million Persians look like a Saturday night pub fight.
The only time that most licensing officers can get at an unlicensed HMO is when a tenant comes in to complain and brings it to their attention.
Then, in order to carry out a successful prosecution, a bureaucratic course has to be embarked upon that makes negotiating between Jews and Arabs in the Gaza strip look like a cakewalk.
But let me introduce you to the RRO…The Rent Repayment Order. This is a little penalty enshrined in the Housing Act 2004; along with HMO licensing it allows a council to take a far more punitive route than enforcing mandatory licensing.
An RRO allows either tenants or the council to recover rent paid on an unlicensed HMO for a considerable period with minimum legal fuss. Certainly less fuss than actually chasing a license under the same legislation.
A tenant can apply for an RRO where the council have already successfully prosecuted a landlord for failing to license their premises, but there is also a provision that allows the council itself to chase an RRO without there having been a successful prosecution at all.
What does this mean?
Well, if a council identifies an unlicensed HMO and slaps an RRO on the property, rent can be claimed back
for 12 months prior to the RRO on all occupiers.
Imagine you have 2 HMOs with 5 tenants in each. All on housing benefit. The council can claim back 12 month’s rent on 10 people. Even if those original 10 tenants leave, any new tenants will not be paid out by HB because they will be clawing back 12 month’s rent on the previous tenants, because the sanction applies to the property, not the individual claimant.
The matter is actually dealt with by the Residential Property Tribunal on the same evidential basis as a criminal action, but if the paperwork is all in order there doesn’t have to actually be a hearing, everything goes through as an administrative process.
A couple of years back Liverpool City Council went a step further than an RRO and claimed back £23,000 against a general pay out of £39,000 under the Proceeds of Crime Act where a landlord continued to take housing benefit after a prohibition order was lodged.
This is serious stuff folks.
The government and Shelter are leaning heavily on local authorities to crack the whip. I don’t actually think this is the best way forward but it is what it is.
It doesn’t do any good to complain that the law is all slanted towards tenants, it doesn’t do any good to claim it isn’t fair, as I said above, it is what it is.
How do you avoid it?
License your HMO. It’s going to be cheaper in the long run than playing cat and mouse with the council. If you build a relationship with your council’s licensing officers they are less likely to go down this route.
Ask them how they can help you, take them for a pint, build a relationship with the people that can help you. Trust me, speaking as a prosecuting officer for a local authority the last thing I want is to do loads of paperwork. I like most of my landlords, I want to help, not whack you.
Build links not barriers.
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