University putting landlords in danger of prosecution for unlicensed HMOs

by Phil Turtle, Landlord Licensing & Defence

9:14 AM, 19th October 2020
About 3 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

Landlord2.0

21:42 PM, 19th October 2020
About 3 months ago

Firstly, you need to read the Housing Act 2004 because it makes clear that public bodies that provide or manage housing, like universities, are exempt from mandatory licensing.

Imean this isn't exacly a new thing.

https://www.legislation.gov.uk/ukpga/2004/34/schedule/14

Given this, could you please take this article down or amend it as it's spreading misinformation.

Thank you

Landlord2.0

21:43 PM, 19th October 2020
About 3 months ago

Reply to the comment left by Chris @ Possession Friend at 19/10/2020 - 18:16
They don't need to be licenced, they're exempt according to the Housing Act 2004.

https://www.legislation.gov.uk/ukpga/2004/34/schedule/14

Jay James

22:47 PM, 19th October 2020
About 3 months ago

Reply to the comment left by Landlord2.0 at 19/10/2020 - 21:42
You said "exampt from mandatory licensing". To my knowledge, it is not mandatory licensing in discussion here.

Leics Landlord

22:57 PM, 19th October 2020
About 3 months ago

They are not classed as HMOs for the purposes of the Act at all and are exempt from all forms of HMO licensing. This has been well known to those of us who have let to Universities for some time.

I too would suggest this article is amended or deleted, if I were the University I think I would be consulting my lawyers.

Jay James

23:40 PM, 19th October 2020
About 3 months ago

Reply to the comment left by Leics Landlord at 19/10/2020 - 22:57
If only every rental property was subject to a single set of standards and enforcement.

Peter

7:49 AM, 20th October 2020
About 3 months ago

I let my entire portfolio to Surrey University in Guildford for several years. The relationship ended about three years ago. But at that time, they assured us that they were not legally required to have a license .

However, in Warwick’s case where they returned the properties, I am certain that the owners will need a license PDQ. I would recommend they get on with it immediately.

WATennant

11:11 AM, 21st October 2020
About 3 months ago

According to the Coventry City Council website, Warwick Accommodation is not exempt from needing HMO licenses for properties.

There are a few exemptions to the above requirement:
[...]
Buildings occupied solely or principally by students on full time courses, where the education establishment manages the property and has signed up to an Approved Code of Practice (in Coventry this currently only applies to campus and large purpose-built buildings - it does not apply to off-campus houses where Warwick Accommodation or Future Lets act as managing agents.)

https://www.coventry.gov.uk/info/280/housing_enforcement/3348/hmo_licensing/3

Chris @ Possession Friend

21:20 PM, 21st October 2020
About 3 months ago

Reply to the comment left by WATennant at 21/10/2020 - 11:11Indeed WATennant,
It is a little more complex that just saying all Student let accommodation by Universities are exempt from Licensing, as you point out.
I have confirmed from a check of the University establishments listed as having been exempt by the Secretary of State, that Warwick University is so authorised but even then, one has to look deeper ( https://www.legislation.gov.uk/uksi/2019/904/schedule/made )
The comments of Coventry Council are in accordance with the intention of the exemption for Universities, in that purpose built accommodation on campus and managed by the University achieve the exemption.
I would be interested to hear from any landlord of a property that has been let on a lease to Warwick Accommodation, who have now ceased that agreement, handing the property back to the Private landlord.

Leics Landlord

21:46 PM, 21st October 2020
About 3 months ago

Reply to the comment left by Chris @ Possession Friend at 21/10/2020 - 21:20
The law is perfectly clear. The following is not an HMO:

"Buildings occupied by students
4(1)Any building—
(a)which is occupied solely or principally by persons who occupy it for the purpose of undertaking a full-time course of further or higher education at a specified educational establishment or at an educational establishment of a specified description, and

(b)where the person managing or having control of it is the educational establishment in question or a specified person or a person of a specified description."

You will observe that there is no reference to this applying only to purpose-built accommodation on campus (obviously, because of those Universities who don't have proper campuses). Any building occupied wholly by students and managed by a specified institution is not an HMO and is therefore wholly exempt from all licensing whether mandatory or otherwise. It really is that simple.

Thank you for confirming that the University of Warwick is a specified institution and is able to take advantage of this exemption.

Coventry council's website is a poor guide to the law, and I'm afraid that I am confused as to why you think it would be - surely every landlord knows of examples of councils getting it wrong?

I really do think this article ought to be withdrawn or at least corrected.

XPP

10:34 AM, 22nd October 2020
About 3 months ago

Thanks for sharing this invaluable information.....
I am a new HMO Landlord operating in Coventry for the uni students. This discussion was really useful by showing legal situation on this subject. Although all Landlords are responsible to know the Law, most of them are ordinery guys like me. Therefore I value this forum for discussions on topics like this. This article has exposed my ignorance on this subjects by tableing good arguments on this subject by some experts. The decision to act on these argument is upto the affected party. Therefore, in future this platform should be bold enough to bring up topics like this..... This is only my humble opinion please.....

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