University putting landlords in danger of prosecution for unlicensed HMOs

by Phil Turtle, Landlord Licensing & Defence

9:14 AM, 19th October 2020
About 2 months ago

University putting landlords in danger of prosecution for unlicensed HMOs

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University putting landlords in danger of prosecution for unlicensed HMOs

Following the recent revelation that the University of Warwick is dumping hundreds of private landlords in favour of its own student accommodation, it has today come to light that as part of this strategy it appears to have deliberately put landlords subject to Coventry City Council’s controversial Additional Licensing scheme at risk of prosecution and massive fines.

These landlords have historically signed-over their properties to the University of Warwick under its ‘Head Lease Scheme’ where the University handled all aspects of managing each property for its owner.

The University announced last month that it was dumping all its Head Lease Scheme private property owners and handing-back their properties. Meaning that owners would then have to start managing properties themselves as Landlords, which many are not equipped to do.

In taking back properties, owners have asked the University for various documents to enable them to take over the management. They have been shocked to find the University saying, “we have no HMO licence for your property.” This despite the fact that all houses in multiple occupation (HMOs) in the City have been required to have an HMO licence since 4th May 2020.

As the University works unduly hand-in-glove with the City Council by funding the employment costs of two housing enforcement officers, we believe; it will be very interesting to see whether the City Council’s Licensing department imposes Civil Financial Penalty fines on the University, for the Criminal Act of failing to licence HMOs, with the same zealous ferver that they prosecute private landlords.

They normally fine private landlords £8,000 to £9,000 per unlicensed HMO and add many further £1,000s to this by ‘finding’ breaches of the HMO management regulations. We have seen them raise fines in the region of £60,000 per property on many occasions.

“We are aware that Coventry City Council has consciously misled some of these affected landlords that they were responsible for the failure to have licenced these HMOs (and therefore liable to prosecution or fines),” said Phil Turtle, compliance director with Landlord Licensing & Defence.

“However, fortunately, we are able to advise landlords that this is incorrect and that, as the University has been receiving the rent from the students (under what is in effect a Rent-to-Rent scheme), Section 263 of the Housing Act 2004 squarely makes the receiver of the rent (i.e. the University of Warwick) the party liable to be prosecuted for the Criminal Act of failing to licence an HMO.”

Not only does the University of Warwick appear to have not licensing these properties it further appears to have done this deliberately, because of its plan for the divesting of all their private landlords. One might conjecture that it was not wanting to hand over £1,000 per property in licence fees.

Interestingly the University may have scored a massive own-goal by operating illegal unlicensed HMOs, Landlords who operate unlicensed HMOs not only risk a big fine, but also Rent Repayment Orders of up to a year’s rent per tenant.

Since 4th May 2020, the Coventry City Council Additional Licensing scheme has been in place.

Like all local authorities, Coventry City Council delights in telling and assisting tenants of Private landlords that they can obtain Rent Repayment Orders. Councils usually claim, “we have a statutory obligation to inform and assist tenants to take this punitive action against landlords as a form of punishment”.

Let’s see if Coventry City Council’s licensing department put the same zeal into prosecuting the University for failure to licence, and into telling eligible tenants of their University pals to take the same punitive and aggressive Rent Repayment Order action against the University!

Any landlord affected or worried that they may be affected by this licensing scandal should contact expert help at Landlord Licensing & Defence {link to http://landlordsdefence.co.uk/contact} or phone 0208 088 0788 without delay.


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Comments

TrevL

10:24 AM, 19th October 2020
About 2 months ago

I doubt the council will pick a fight with its big buddy, the university, there will be a cosy relationship.
If you want to get back at the uni wouldn't you try and contact the students and encourage them to claim the rent back?

David Price

10:55 AM, 19th October 2020
About 2 months ago

.I wonder how many students will risk their degree by claiming rent back from the awarding entity?
Coventry City Council has an obligation to enforce all licencing and should do so, however there seems to be nothing anyone can to to force the issue.

Peter Webb

11:16 AM, 19th October 2020
About 2 months ago

The Council must have been fully aware that these properties needed and didn't have HMO licences. It seems they are working in liaison with each other.

XPP

11:45 AM, 19th October 2020
About 2 months ago

To my understanding, Warwick Uni and Coventry Council have very good relationship. Because the Uni has enough funds in comparison to other Universities, the council will not medle with them.
The probability is that this matter will be treated as an exception to the norm and sorted out in a friendly manner under the current situ.
The challenge will be to the existing private landlords where there will be about 100 additional properties dumped in the market and with COVID situation the rents will be pushed down. The estate agents & private HMO managers will benefit by getting more business. Even the landlords may consider disposing these assets off to avoid the hassle.... Do anyone has any comments on my thoughts?

TrevL

12:40 PM, 19th October 2020
About 2 months ago

Reply to the comment left by XPP at 19/10/2020 - 11:45
100s of properties dumped..... isn't this just supply and demand....if the demand has evaporated then disposal is a sensible option.

I imagine the uni never garenteed permanent on ongoing income for the landlords they did business with.

TrevL

12:41 PM, 19th October 2020
About 2 months ago

Reply to the comment left by David Price at 19/10/2020 - 10:55
Just claim after graduation....I'm sure the period of limitations will wait a few months or couple of years.

Chris @ Possession Friend

18:16 PM, 19th October 2020
About 2 months ago

Reply to the comment left by Peter Webb at 19/10/2020 - 11:16
Basically, Coventry aren't taking enforcement action for Additional Licensing against anyone ( due to Covid ) until 4/11/20

Dear Chris,
Thank you for your email.

The Council is not aware of this, however, if the management of the property will change as a result of Warwick Accommodation withdrawing their Head Lease Scheme, it is a Licence Holder’s responsibility to inform the Council in writing about change of management within 21 days. This should be done by submitting a licence variation application.

If the Council comes across any unlicensed property in Coventry, regardless of it being managed by Warwick Accommodation or not, it would follow its normal procedure for carrying out enforcement.

The Council is not aware of any unlicensed HMOs currently managed by Warwick Accommodation, however it will investigate any claims further. If you have any information about any property being operated as unlicensed HMO, please report it immediately via our online reporting form.

It should be noted that due to the COVID-19 pandemic, no enforcement action is being taken against HMOs falling under Additional Licensing Scheme until 4th November 2020, which is 3 months from when the Government significantly eased lockdown restrictions.

Kind Regards,

Dagmara Kwiatkowska

Licensing Team Leader
Property Licensing Team
PO Box 15
Coventry City Council
Earl Street
Coventry
CV1 5RR
http://www.coventry.gov.uk
Tel: 02476 972 490

Luke P

18:27 PM, 19th October 2020
About 2 months ago

Reply to the comment left by Chris @ Possession Friend at 19/10/2020 - 18:16
Right about the time they’ll be back in the owner LL’s hands then (assuming a 30 day or so notice period by Warwick University)?

An absolute joke.

Private action against WU and Coventry City Council should be brought if at all possible.

Phil Turtle, Landlord Licensing & Defence

19:06 PM, 19th October 2020
About 2 months ago

Reply to the comment left by Chris @ Possession Friend at 19/10/2020 - 18:16
"If you have any information about any property being operated as unlicensed HMO, please report it immediately via our online reporting form." says the council

i.e. LL please grass up your LL colleagues!

They don't miss a trick in their relentless campaign for revenue

Shame they have little regard for housing standards any more. It's all about the money.

And of course there is no redress against the local authority unless you have a couple of £100k to take them to the only thing they fear: Judicial Review

Puzzler

21:32 PM, 19th October 2020
About 2 months ago

Presumably why they offloaded them....

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