Renting HMO via verbal agreement?

Hi Andy,

Assuming this is a for real situation I don’t really know where to start. It sounds like every rule in the book is being potentially broken.

Are you acting as some sort of live in Rent to Rent lodger arrangement?

The landlord must obtain a licence if the house has 5 or more unrelated occupants who are sharing one or more facilities. Failure to licence is a criminal offence. You would probably need to be on the application as manager.
Getting a licence isn’t just a bunch of paperwork. The local authority will want to see that the electrical, gas and fire safety installations are all certificated and up-to-scratch. Other hazards around poor condition would also likely need to be addressed. All in all, a lot of fun lies ahead for you and your landlord.
If you reduced the number of tenants to 4, you might escape mandatory licensing, but check if the LA also has discretionary licensing scheme + the general liability to provide a safe property is still something for which the local authority is empowered to take action even in the absence of a mandatory licensing requirement. Get your landlord to make it safe.

Andy
You have blundered into a mass of problems as Neil points out. You are probably committing several offences and your fellow tenants can seek Rent Repayment Orders from you so you will have to pay back all of the rent received for the past 12 months. This is because you are operating an unlicensed HMO. See e.g. https://www.rla.org.uk/landlord/guides/rent-repayment-orders.shtml
Your landlord is also in breach. He should give you a written tenancy agreement. By acquiescing in the operation of an unlicensed HMO he is also responsible. Furthermore, he cannot absolve himself from responsibility for maintenance.
Does your property have fire doors, door closers, fire/smoke alarm, gas safety certificate, EPC, electrical safety certificate etc., etc? Have appliances been PAT tested? Does all furniture comply with the Furniture and Furnishings (Fire) (Safety) Regulations 1988?
It appears neither you nor your landlord know very much about housing law. I suggest you take specialist legal advice urgently.

You need to look at damage limitation asap. I would suggest you seek possession as maybe required to reduce the number of unrelated tenants to three. This means you won’t need a mandatory HMO license. The maintenance issues and other regulations applicable to small unlicensed HMO’s then need to be addressed. The landlord has legal liability for managing and maintaining the property in a satisfactory condition. You need to speak to him with perhaps, facilitation from an appropriate expert.

It sounds like there is additional licencing in place, so lots of compliance issues to address even if only 3 people in there.

Of course you are correct if additional licensing is in place but not sure I agree that it is implied!

Reply to the comment left by Rob Crawford at 04/12/2019 – 19:51
Original post included “the local council have changed it that you have to pay a HMO licence from a household of 3 back in June”.

That sounds like Additional Licencing to me.