My HMO (House in Multiple Occupation) Dilemma

My HMO (House in Multiple Occupation) Dilemma

18:10 PM, 21st January 2012, About 12 years ago 50

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Norwich City Council are now charging £1,800 for an HMO licence, a 650% increase! Extortionate I think but so far as I knew, it didn’t affect me as none of my properties are licenceable HMO’s, until…

Before I go on with my story, just in case you don’t know what an HMO is it’s a property with three or more stories let to 5 or more tenants, and HMO stands for House in Multiple occupation.

This week my brother and I have spent hours sorting out a problem we didn’t know we had.

I have one of those super trendy 4 bed properties at Riverside, Norwich, where many of the local Premiership footballers are also owners. I’ve owned it from new and my tenants have been there for nearly seven years. It is a four bed three story town house but as I only had four tenants in it I didn’t need an HMO licence.

Unbeknown to me until this week though, two tenants moved out in April last year and an unmarried couple moved into one room and another single chap into the other. They sorted it all between themselves and didn’t see the need to tell us at the time. Therefore, there are now 5 people living in the property.

The original tenancy was pre-deposit protection rules and they had sorted the deposit between them so that’s one less worry to deal with but as you can see I now have a problem, and to make it worse Norwich City Council are aware of it too.

The only reason I found out about this is because one of the occupiers of my property (not one of the people I thought was living there) recently lost his job and has claimed benefits. The Council have asked him for a copy of his tenancy agreement and of course he doesn’t have one. In fairness to my tenants, bless em, were not aware they had done anything wrong. I can easily see how any tenant could inadvertently create this problem, foreign or not. Tenancy law and HMO rules are not something the average person has any awareness of are they?

WHAT A MESS!

If I allow them to stay I need to create a new tenancy, protect the deposit and get an HMO licence as it would become a licenceable HMO. The scary thing about that isn’t just the cost though. I wouldn’t put it past Norwich City Council to bring in Article 4 HMO planning. If that was the case I might not be able to convert the property back into a family home and its value could plummet as as result. That’s another story though!

What choice did I have other than to serve a section 8 notice to give the tenants two weeks to vacate the property on the grounds of breach of tenancy? Well between my brother and I, we’ve been in email communication with them and with Andy Fretwell from the Eastern Landlords Association all week. Andy has been brilliant by the way, if you live in East Anglia I strongly recommend you to become an ELA member.

The email communications started to get unpleasant so we decided that a face to face meeting was the way forward. They all wanted to stay. They have been model tenants in terms of paying the rent, looking after the property, reporting minor issues before they become big problems etc. and the last thing I really wanted to do was to go to war with them in Court to get them out on the grounds of section 8 and breach of tenancy.

Fortunately, there is a happy ending to the story. It’s amazing what can be achieved over a cup of tea around a kitchen table isn’t it?

Once I had met with them and got them to understand that it’s the law that’s an ass, not me, we began to have a civilised and sensible conversation. The outcome is that one of the tenants has agreed to move on so that the others can stay and we will sort a new AST and protect the deposit for the remaining four so it will not become a licenceable HMO.

Will the 5th actually go though I wonder or will he become a “permanent guest” of the remaining four and register elsewhere on the voters roll?  Only time will tell I guess but as far as I’m concerned, I think, or at least hope, I’ve done my bit to protect my position.

PHEW !!!


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Comments

Mary Latham

12:35 PM, 30th January 2012, About 12 years ago

Francis I have fought and lost a case with the Valuation Office on behalf of a landlord who has developed properties in a similar way to you. This is the issue for my landlord 

An HMO will be banded for Council Tax as a single dwelling and the liability will be dependant upon the number of AST's that are in place. The buildings have been large HMO's with tenantds sharing facilities for years and the landlord has paid the Council Tax

The landlord decided to develope some of his buildings and bring them up to date by making them self contained units with en suite shower rooms and kitchenetts.  There was no major structural work just stud walls and new door ways in exisiting walls.

At some point the VOA became aware that the use of the property had changed and they arrange to visit to revalue for Council Tax.  They valued each unit at band A and this increased the overall Council Tax bill by 400%

The landland reduced the rent by the amount that he had been paying in Council Tax but he lost most of his tenants who were on low incomes and could not afford to pay the additional Council Tax.

You may have taken this into consideration but I thought that is was worth mentioning.

This is a doucment that you might find useful for fire safety and security guidance http://www.homestamp.com/fire-standards/

I was asked to remove my fire extinguishers because they encourage tenants to fight the fire when what we want is for them to leave as quickly as possible - it had not occured to me but when you think about it this makes good sense.

How did your meeting go?

12:46 PM, 30th January 2012, About 12 years ago

I notice the Sheffield Website gets a good mention in the thread above. http://www.sheffield.gov.uk/hmo I just want to correct one area of confusion - not in relation to Council Tax but re: families and HMO and HMO licensing status.A family of however many people letting out part of the property to three tenants on three storeys will be an HMO but will not require a licensing under the mandatory scheme as the family count as one person. In summary Family + 2 lodgers - not an HMOFamily + 3 lodgers - HMOFamily + 4 lodgers in a three storey property - Mandatory Licensable HMO.Paul Rotherham

Mark Alexander - Founder of Property118

13:35 PM, 30th January 2012, About 12 years ago

Thanks for commenting Paul. I also very much appreciated our offline conversation. I was particularly interested to hear that you can access Council Tax exemptions records to identify HMO's for students and benefits claimants, which, as you say are the majority of HMO's. I was also very interested in the legislation that you quoted which will allow you to prosecute agents who manage (not let) HMO's which are licenceable but  not licensed. If you would like to write a blog about that, quoting the relevant sections of law, I would be delighted to publicise it here.

I was pleased to hear that you have met with the three landlords associations in Sheffield to discuss HMO licencing fees and that these discussions seem to be going well. Sheffield landlords are very lucky to have somebody in your position who clearly understands both the rules and the practicalities surrounding PRS housing.

16:21 PM, 30th January 2012, About 12 years ago

You should replace those extinguishers ASAP.
They are not designed to fight fires; they are there to protect the means of escape for the occupants
The rule is if there is a fire close all doors and evacuate.
You may need an extinquisher to facilitate your egress from a property
Of course you call 999 aswell..

Mary Latham

18:01 PM, 30th January 2012, About 12 years ago

Paul I took my extinguishers out at the request of West Midlands Fire Service who told me that they caused more harm than good.  My HMO's are only ground and first floor with a maximum of 5 tenants, all rooms have hard wired interlinked smoke alarms, as do corridors and heat detector in the kitchen, all doors are fire doors and all windows are fire escape windows.  The exit route, that can be used if tenants don't want to jump from an upstairs window, is 1/2 fire protected as are all ceilings.  West Midlands Fire Service do not want fire extinguishers in buildings of this size. My student lets were set up like this in the early 80's and that is why I had fire extinguishers in the first place.

Shame really the students used to use them to prop open fire doors and torment each other at parties hahahaha

19:23 PM, 18th September 2012, About 12 years ago

Hi im looking to rent a three bedroom house with my girlfriend and another couple. Non of us are married or related but we are all friends. I am completely lost when it comes to hmo. If we rented a 2 storey house would it mean the landlord would need a license?

Mark Alexander - Founder of Property118

20:23 PM, 18th September 2012, About 12 years ago

Hi Dan, probably not. However, it might depending on where you live. For example, if it's Oxford the landlord would need a licence as none of you are married to each other. If you were he wouldn't and if you live somewhere other than Oxford there's a possibility he wouldn't anyway. Crazy huh?

8:25 AM, 1st February 2013, About 11 years ago

Mike,

I am a tenant, in Scotland, living with my girlfriend/partner. Our landlord is confused and unaware of the aspect of Scottish HMO regulations that allow a couple to count as one. Could you please send me your source so I can pass it on to him. That way he can avoid reapplying for an HMO (and all associated costs) for more people. I know my girlfriend and I count as one for HMO purposes, I just need it in writing! Thanks!
-Thomas

Mrs Loon

10:19 AM, 17th December 2014, About 10 years ago

I am considering buying a 5 bedroom house. I asked the council dept about HMO regulations. It transpires that you don't need an hmo licence if letting to tenants when it is not their main residence. What I am not sure about is whether I can rent 2 rooms on a full term basis and 3 on short term basis, thus having 2 tenants living there as their main residence and 3 living there as temporary residence say monday to friday or just for a month etc. Would this mean its not an hmo since only 2 unrelated people are using it as their main residence? Any help here, thoughts would be much appreciated.

John Frances

16:27 PM, 17th December 2014, About 10 years ago

Thanks Paul for the information, I am also in a fortunate position that our HMO officer at Wirral is also very proactive in telling giving detailed information on what is and what isnt a HMO. One point that confused me a little yesterday was that they are adamant that 2 person and 2 households constitutes a HMO for certain purposes of the legislation, does anybody know if this is correct as I always thought it was 3 persons and 2 households as previously said.

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