Student management company ordered to repay £84,000 for unlicensed HMO

Student management company ordered to repay £84,000 for unlicensed HMO

9:48 AM, 26th September 2022, About 2 months ago

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A student accommodation management company has been handed a harsh punishment that will cost them £84,877 for not having an HMO license.

The First Tier Tribunal issued a rent repayment order but accepted that the lack of a license was ‘by omission rather than deliberate’.

The property, Student Castle in Oxford’s Osney Lane, is purpose-built student accommodation which opened in September 2020 and is managed by SC Osney Lane Management Ltd.

The HMO has 242 rooms in 41 cluster flats.

Oxford City Council’s ‘additional’ HMO licensing scheme

However, Oxford City Council’s ‘additional’ HMO licensing scheme requires landlords and managers of all shared rented houses and flats to have a licence.

A council officer inspected the property on 2 September 2021 and advised the management company that the cluster flats required an HMO licence.

The management company applied for an HMO licence on 15 September 2021. This was issued on 9 December after a further inspection in October.

Could apply for a rent repayment order

The council advised the tenants living in the cluster flats that they could apply for a rent repayment order and pointed them to an organisation offering specialist advice and representation.

That led to 44 renters subsequently making a group claim to the tribunal and their case was heard in Cambridge in July.

While the tribunal accepted that the failure to obtain a licence was ‘by omission rather than deliberate’, it found that the cluster flats needed a licence and were therefore in breach of Oxford’s additional HMO licensing scheme.

On 11 August, the tribunal decided that each claimant should receive a 35% refund of rent paid while Student Castle was unlicensed – which amounts to £84,877.

Under the Housing Act 2004, licensing is mandatory for HMOs occupied by five or more people.

Extend additional licensing to other shared housing

Councils can extend additional licensing to other shared housing where a significant proportion of HMOs are poorly managed and give rise to problems for residents or the public.

In 2011, Oxford was the first council in England to introduce a citywide additional licensing scheme that requires every HMO to be licensed.

Licensing requires private landlords to show that they are complying with the law by meeting safety and management standards, being a ‘fit and proper person’ and meeting council waste storage and disposal requirements.

The start of citywide selective licensing follows government approval of the scheme in April. It means Oxford is the only council area in England requiring a licence for all private rented homes.

‘This was not a typical case’

Councillor Linda Smith, Oxford council’s cabinet member for housing, said: “While this was not a typical case, it does demonstrate the importance of landlords and agents obtaining licences for their accommodation and the potential consequences if they do not.

“Our new selective licensing scheme means that all private rented homes in Oxford now need a licence, not just HMOs.

“Everyone deserves a decent home, and our licensing schemes are vital in helping to ensure that private rented homes are safe, well maintained and well managed.”

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