Thought provoking HMO and selective licensing question

by Mark Alexander

12:34 PM, 18th October 2013
About 6 years ago

Thought provoking HMO and selective licensing question

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Thought provoking HMO and selective licensing question

The importance of my question is that, depending on the answer, it may be a way for landlords to bypass requirements for HMO licensing,  selective licensing and the problems associated with article 4 restrictions.

Yes it’s a simple question but with enormous consequences and to my knowledge the question has never previously been asked.

Just suppose a landlord rents a 5 bed three story town house to Mr X and gives him permission to take in up to 4 lodgers.

Does the property require an HMO licence?

Please bear in mind the landlord will never actually know how many lodgers the tenant has taken in and the number will change frequently.

To my knowledge there is no legislation to suggest that a tenant can’t also be a resident landlord.

I have checked the legislation and whilst I accept I might have missed something I can see nothing to answer this question.

Thought provoking HMO and selective licensing question

I raised this question on the HMO Facebook Group and so far I’ve not got a clear cut answer there despite several responses and comments

I look forward to reading your comments below.



Comments

Phil Ashford

19:09 PM, 18th October 2013
About 6 years ago

Hi Mark.

I think I' can clear this up for you, but firstly, your point about bypassing Article 4 Directions ( not restrictions). An Article 4 Direction removes an owners Permitted Development right to change a C3 dwelling into an C4 HMO. A C4 HMO is as per Housing Act 2004 - and your scenario above would be a HMO. 3 persons, forming 2 Hoiuseholds sharing 1 or more basic amenity.

For clarity on you lodgers point, see my response to that below, but I think you will see that this quickly erodes your idea:

Schedule 14 of the Act specifically exclude a Landlord Occupier from the definitions of an HMO as per s254-259. It is excluded in Schedule 14 para 6(1)(c).

To find the 2 lodgers reference, you need The Licensing and Management of Houses in Multiple Occupation and Other Houses Regulations 2006 para 6(2). That states the number of persons specified for HA2004 para 6(1)(c) as 2.

Simples.

In the case presented, look at Schedule 14 and you'll see the scenario fails para 6(1)(a) and thus a tenant occupier with two lodgers would not be an excluded scenario and s254-259 would remain. Therefore you have 3 persons forming two or more households = HMO.

Licensing rules would follow as normal for 5 persons OCCUPYING the property.

Phil Ashford

19:12 PM, 18th October 2013
About 6 years ago

Reply to the comment left by "Phil Ashford" at "18/10/2013 - 19:09":

To add clarity to my last sentence.

Mandatory Licensing rules would apply where there are 5 persons forming two or more Households who share a basic amenity over three Stories.

With less Persons or Stories then an Owner would need to check for Selective or Additional Licensing in force by theirs local authority.

Mary Latham

19:21 PM, 18th October 2013
About 6 years ago

The landlord would be responsible for allowing the property to be "used" as an HMO and if it fell within licensing legislation he would still need to comply.

Even a live in landlord would have an HMO if he took more than two lodgers.

Nice try Mark

Follow me on Twitter@landlordtweets

My book, where I warn about the storm clouds that are gathering for landlords is here >>> http://www.amazon.co.uk/dp/1484855337

Jay James

20:53 PM, 18th October 2013
About 6 years ago

Reply to the comment left by "Mary Latham" at "18/10/2013 - 19:21":

"Even a live in landlord would have an HMO if he took more than two lodgers," from Mary's comment above seems to contradict Phil Ashford's comment from 18-10-13, 19.09. "Schedule 14 of the Act specifically exclude a Landlord Occupier from the definitions of an HMO as per s254-259. It is excluded in Schedule 14 para 6(1)(c). "

This provides a very practical consideration for owner occupiers.
If they take in eg 7 lodgers, is their home an HMO?
If yes, what effect if any does this have on the lodgers' rights come eviction time? (None I imagine given that HMO or not, the LL is a resident landlord and so need only give reasonable notice.)

Phil Ashford

21:28 PM, 18th October 2013
About 6 years ago

Reply to the comment left by "Jay Jay" at "18/10/2013 - 20:53":

Hello Jay Jay

Be careful, you have ignored my next paragraph and likely not gone to the source to read the references I have made. You should re read my comment carefully. Simply quoting the one sentence misquotes my whole post.

"To find the 2 lodgers reference, you need The Licensing and Management of Houses in Multiple Occupation and Other Houses Regulations 2006 para 6(2). That states the number of persons specified for HA2004 para 6(1)(c) as 2."

This completely concurs with Mary's statement.

For reference and in plain English: A Landlord Occupier can have up to two lodgers and it not be an HMO. Any more lodgers = HMO.

Mark Alexander

9:37 AM, 19th October 2013
About 6 years ago

Well I can see why the HMO Facebook Group came up with the name WikiPhil, well done Sir!

I really thought I might be onto something there, oh well, as Mary said ...... 🙁

The HMO Facebook Group is an excellent resource for HMO landlords, if you are a Facebook user, do check it out - https://www.facebook.com/groups/housesofmultipleoccupancy/
.
.

Industry Observer

12:36 PM, 21st October 2013
About 6 years ago

Whole issue here is where the liability/responsibility lies.

Just because you set something up in a cute round the houses manner doesn't mean it escapes being what it is.

In this case an HMO.

The basic p[osition here is that of the owner and Landlord living at the property, but even then the number of tenant lodgers is limited.

If the owner themselves is not living at the property far as I am aware the lodger exemptions do not apply. In other words you cannot call the tenant the Landlord of the lodgers, he is their licensee.

You also of course run into numerous other control issues with people coming and going like yo-yos especially on the damage front. Plus of course consent to let issues as any such occupancy would not be on ASTs.

Forget it is my advice


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