Planning permissions for extended HMO Licensing?

by Readers Question

15:36 PM, 30th May 2018
About 5 months ago

Planning permissions for extended HMO Licensing?

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Planning permissions for extended HMO Licensing?

In October mandatory licensing is being extended to include all 3 storey HMO’s and all HMO’s with 5 or more occupants living there as 2 or more households. This affects small HMO’s eg student houses. Unfortunately I will now have to get a couple of properties licensed. 

 The application for my borough asks if you have planning permission ‘yes/no’. ‘If yes enclose a copy of the permission’. My houses were established as HMO’s before the article 4 directive came along and I do not have planning permission as such. 

Should I be worried?

Jim

 

Click Here to see the new legislation.

Description of HMOs prescribed by the Secretary of State

An HMO is of a prescribed description for the purpose of section 55(2)(a) of the Act if it—

(a)is occupied by five or more persons;

(b)is occupied by persons living in two or more separate households; and

(c)meets—

(i)the standard test under section 254(2) of the Act;

(ii)the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats; or

(iii)the converted building test under section 254(4) of the Act.



Comments

St. Jims

11:25 AM, 31st May 2018
About 5 months ago

I'm no expert, but my amateur understanding is that planning permission is not required if your HMO has 6 bedrooms/households or fewer.

If you want to go up to 7 bedrooms or more, you need to get a change-of-use planning permission, just as if you wnated ot change a newsagent into a off-licence.

The danger with a change-of-use is that future Councils might not let you change it back again, especially if doing so would reduce the total number of affordable accommodation units in the area.

paul robinson

11:31 AM, 31st May 2018
About 5 months ago

As I understand it regarding planning and the additional powers brought in for LA.

A HMO is classes as as 3 or more unrelated tenant living in a house. Although these changes arnt retrospective do as long as keep renting as is and don’t have a spell where rent to family that’s fine.

I’d just put N/A to the planning permission question on the HMO application form.

Ian Narbeth

13:00 PM, 31st May 2018
About 5 months ago

Jim
I would put "No" on the form as you do not have a planning permission. (I assume there is none from when the house was built.) I infer that the Article 4 direction you mention requires permission for change of use to C4. Has use as an HMO has been continuous since before the Article 4 direction came in? If so, then you should not need permission and can explain this if the Council raises the point.

Pace Paul Robinson's post, I would not put N/A as it will not be obvious to the Council that a Yes/No answer cannot be given and they may say you have not filled in the form correctly.

Vedran Beader

14:20 PM, 31st May 2018
About 5 months ago

I have experience in this exact situation as I have gone through it myself.

Here is the catch 22:

- if you apply for a licence, the local authority is obligated to inform your mortgage lender who will check you have the correct mortgage for a hmo. Of not, they could pull your mortgage and you will need to pay them back. (Applies only if you have an outstanding mortgage)
- The licensing dept will then inform the planning dept that you have applied who will check to see if you need planning permission. (which on the outset, you do).
- The planning dept will then request to inspect your property citing potential breach of planning permission. They will ask informally at first. If you refuse, they will get a warrant.
- if they determine you are operating a hmo they will serve you an enforcement notice requiring you to cease and desist that current use or apply for permission. If you apply for permission,you need to prove it was a hmo before the article 4 direction came into effect and has been one to the date of the application. The council are fickle, they will try to discredit you on each point of evidence you submit if they can.
- by applying for the license first, you are opening a can of worms. By applying for the LDC (Lawful development certificate) you are on the system for the planning enforcement dept.

Either way, you will be subject to probably around a year of grief from the council on all fronts. But if your income is worth it, then it's worth it.

Process:

- Apply for LDC (opens up mortgage options)
- Apply for Mortgage (while the license is not required yet)
- Apply for licence when the time comes.

That's the only way to go about it. Licence comes last.

I've done this multiple times and through trial and error have achieved it.

Good luck!

Ian Narbeth

14:48 PM, 31st May 2018
About 5 months ago

Reply to the comment left by Vedran Beader at 31/05/2018 - 14:20Sorry Vedran but that is thoroughly bad advice.
The points you raise are only really relevant if the landlord has been bending the rules. Applying for a licence for an HMO will be mandatory from 1st October so we have to live with that.
If you have got the wrong mortgage (i.e. you didn't disclose the property was an HMO) then you will have to re-finance. Don't try to save 1/2% by concealing the true position
If you refuse access to the Council then, yes, they can get a warrant. What did you expect?
If the planners ask about the lawfulness of HMO use the landlord can produce evidence of continuous use. The Council are unlikely to serve an enforcement notice in these circumstances. If they do, appeal it and if necessary apply for a Lawful Development Certificate (formerly known as Certificate of Lawful Use). Planners have to give this if the necessary facts are established.
If on the other hand you duck and dive, don't apply for a licence and try to avoid the Council because you assume they are "fickle" and just out to get you then you cannot expect them to cut you any slack but you can expect them to treat you like a rogue landlord.
Follow the rules, maintain decent records, keep your nose clean and be prepared to spend a bit of money to do things the right way. Councils have enough on their plate with bad landlords. Be a decent landlord and the Council will direct their attention to the rogues.

Jim

15:42 PM, 31st May 2018
About 5 months ago

Thank you for your reply's.
I am trying to things properly!

I have a 2 storey, 6 bed, student house which I have let since 2002. Each year there has been one single 12 month AST . My mortgage says:
'The property must be let on one of the following types of tenancy: - a written assured shorthold tenancy for a fixed term of no more than 12 months; lettings to students as prescribed by Schedule 1 of the Housing Act 1988 ( ie the property must be let through a university of other publicly funded institution of further or higher education); or a letting to a Local Authority .....

Am I in breach of my mortgage terms? (I didn't intend to as I let the property on one AST which is the 1st type of tenancy stipulated). Will I have to refinance?

What evidence of continuous use would be required to get a lawful development certificate?

St. Jims

16:57 PM, 31st May 2018
About 5 months ago

Reply to the comment left by Jim at 31/05/2018 - 15:42
I think you already know the answer about being in breach, as you knew precisely which terms to pick out of the contract to show us! 🙂

My experience with the Coventry Building Soc was that I knew they didn't lend against HMOs - but when I called to fess up about converting to HMO, they simply said they'd make an exception and would carry on lending, privided I never asked them for any further money on that loan. Worth trying.

FYI if your lender pulls the mortgage, they may be entitled to charge you early redemption fees. I'm sure they'd give you a chance to move mortgages instead - but maybe not if you deceive them. Best to be upfront.

Jim

18:13 PM, 31st May 2018
About 5 months ago

Reply to the comment left by St. Jims at 31/05/2018 - 16:57I genuinely don't think I'm in breach. My conditions say:
'We consent to the property being let as follows:-
a) ......must be actively marketed..blaa...blaa

'b) Unless otherwise stated in the special conditions of the mortgage offer, the property may only be let as one unit. It must not be let to anyone possessing any form of diplomatic immunity or receiving only DSS benefits. No physical alterations may be made to the property for it to be let as separate units;

c) The property must only be let on one of the following types of tenancy: a written assured shorthold tenancy for a fixed term of no more than 12 months; letting to students as prescribed by Schedule 1 of the housing Act 1988 (ie the property must be let through a university or other publicly funded institution of further or high education); or a letting to a Local Housing Authority .....'
I do not have individual units, the property is being let as a single unit and they have a written AST for no more than 12 months.
So why do you say :
'I think you already know the answer about being in breach, as you knew precisely which terms to pick out of the contract to show us!'?

St. Jims

18:38 PM, 31st May 2018
About 5 months ago

Reply to the comment left by Jim at 31/05/2018 - 18:13
A mis-read on my part - I thought the contractual term was that the property had to be let *only* to students or local authority

Ian Narbeth

18:41 PM, 31st May 2018
About 5 months ago

Reply to the comment left by Jim at 31/05/2018 - 15:42Hi Jim
On the basis that your mortgage refers to lettings to students I suspect you are OK on the HMO point as such a letting would come within the definition of an HMO. I would park that point.
Assuming the Article 4 Direction came in after 2002 and you have let the house every year since then you should be OK on the planning front. Unless you need to in order to re-mortgage or on a sale I would wait until the Council ask about planning before applying for a lawful development certificate. As to evidence, copies of the tenancy agreements and correspondence with the tenants would be useful.

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