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Licensing specialist warns that council’s advice could land agents and landlords in trouble

A specialist on licensing schemes is warning that agents and landlords in a London borough could find themselves in breach of the law if they follow advice given by the council’s own staff.

Richard Tacagni, of consultancy London Property Licensing, says that Barking and Dagenham is giving out wrong information.

The council’s two existing licensing schemes both expire on August 31.

While it is implementing a new borough-wide selective licensing scheme on September 1, it has no replacement additional licensing scheme – although it suggests it is planning to.

Tacagni said: “Without an additional licensing scheme in place, all HMOs that fall outside the mandatory HMO licensing scheme criteria will instead need to be licensed under the council’s selective licensing scheme when individual licences expire.”

However, on the two occasions he has phoned the council’s licensing hotline to request advice on what happens when an additional licence expires, he says he has been given wrong advice.

He has been told that smaller HMOs will not need licensing from September 1, and also to wait and see if an additional licensing scheme is introduced before applying.

But Tacagni said: “Following this advice could leave landlords and letting agents in breach of the law with the risk of a criminal prosecution. They could also find themselves unable to issue a Section 21 notice of seeking possession.

“In addition, it could enable the tenants to apply for a Rent Repayment Order for the period between the old licence expiring and a new licence application being submitted.

“To remain compliant, HMO landlords with an additional licence will need to apply for either a mandatory HMO or selective licence depending on the occupancy arrangements.

“Each application needs to be submitted on or before the date that the current licence expires.”

Tacagni says that to coincide with its changes to licensing, Barking and Dagenham has raised fees substantially.

Mandatory HMO licences are up by over a third, to £1,300 for a property with five sharers.

Selective licensing fees have been hiked 78%, from £506 to £900 per property.

Tacagni says this is the highest selective licensing fee in the country, and expected to generate over £16m in fee income over the next five years.

Tacagni said: “It is important that councils provide clear, consistent and accurate information to help landlords and agents correctly interpret local licensing rules.”

The full advice is here: http://bit.ly/2YRBVmv

By ROSALIND RENSHAW

Source: Property Industry Eye

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Council’s licencing scheme ‘unlawful’, landlords claim

Coventry City Council could be breaking the law through its new landlord licensing and accreditation scheme, a trade body has warned.

The authority introduced a free, voluntary Coventry Landlord Accreditation Scheme under its new mandatory licensing system this year, effective from April 1.

But the Residential Landlords Association, which represents private sector landlords, says it could be in breach of European law, although Coventry council has disputed the claim.

Under the scheme, private landlords accredited by the council are able to obtain a longer licence for houses of multiple occupation (HMO) than those who are not, while also gaining financial benefit from paying a cheaper licence fee.

But the only way for landlords to become accredited currently is to attend training courses in Coventry in person, which the RLA says discriminates against landlords who do not live locally.

Landlords must also pay the entire licence fee upfront even if an application is pending, which the RLA believes is unlawful as a 2018 court case ruled licence fees should be split in two parts – the first being an application fee, and the second being once the licence is granted.

David Smith, policy director for the RLA, said: “The RLA is deeply concerned at the serious legal questions that hang over the council’s licensing and accreditation scheme.

“We would strongly urge the council to review this unjust scheme.”

The association has written to the authority calling on it to review both the accreditation and licensing scheme as a matter of urgency.

Coventry council says it has not acted unlawfully, adding it is in the process of developing an online training programme to its accreditation scheme.

Tracy Miller, head of planning and regulation, said “There are three different types of licensing – mandatory, additional and selective.

“Mandatory Licensing is what we already do and we have introduced an Accredited Landlord Scheme for this current licensing system.

“The proposal is for that same scheme to be used for selective and additional should we as a council adopt such schemes.

“The Accreditation Scheme is free to all, however at the moment it requires attendance at a training event.

“It is recognised that not all landlords, agents etc are local and therefore we are developing an on-line training programme in order that we are fair and inclusive to all.

“Our Accreditation Scheme focuses on the issues relevant to Coventry, so it is a local scheme for local people. It is meant to be a proactive tool to reduce the amount of reactive enforcement and to professionalise the sector.

“We would never do anything unlawfully.”

By Tom Davis

Source: Coventry Telegraph

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Plans to turn offices in Deeside into HMO turned down

Plans to turn offices in Deeside into a house in multiple occupation (HM0) have been thrown out.

Proposals were previously put forward to convert a former accountants office on Station Road in Queensferry to provide eight bedrooms.

The developers claimed there would be no major changes to the building if the scheme was to go ahead.

In a statement written on their behalf, planning agents said although there was no allocated parking included, it would not cause an issue.

However, officers from Flintshire Council have refused permission because of the flood risk at the site.

In the documents put forward to the local authority, representatives from Wrexham-based company Develemental said: “This application is for the change of use of a pair of end terrace commercial combined units.

“Currently the property is a vacant former accountancy office created from the joining of what was originally a pair of end-terraced residential properties.

“There will be no material change to the appearance of the property, except that it will be tidied up and will look better cared for and presented than it currently does.

“The only impact of the changes to the street scene is the removal of the shop front which will be largely blocked up, rendered to match with two privacy and secure window units to the two ground floor front bedrooms.

“Although no dedicated parking is provided as part of this proposal, the nature of the residents of a professionally run HMO has been proven to make this a non-issue.

“For any residents who do maintain a vehicle, immediately adjacent is a public car park which has very low daily and overnight charges.”

The scheme was refused by the council’s planning department using delegated powers.

By Liam Randall – Local Democracy Reporter

Source: Deeside

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Landlords body tells city council that its plans for licensing could break the law

A major local authority has been warned that its licensing scheme could be in breach of the law.

Coventry Council updated its mandatory licensing scheme for landlords to include an accreditation regime.

Private landlords who are accredited can obtain longer HMO licences than those who are not.

The Residential Landlords Association has told the council it thinks this is unlawful because the only way for landlords to become accredited is to attend training courses in person.

The RLA argues that this discriminates against landlords who do not live close to their property in Coventry.

In a letter to the council, the RLA argues that this is unfair and unlawful because longer HMO licences offer a financial and practical benefit for landlords, yet only landlords who are members of the council’s accreditation scheme will benefit from being able to obtain a five-year HMO licence.

The RLA earlier wrote to the council raising concerns over the proposed fee structure in its additional and selective licensing consultation.

The RLA now has similar concerns about the mandatory HMO licensing fee structure.

As part of the scheme, landlords must pay the entire licence fee upfront, even if a licensing application is still pending.

The RLA considers this to be unlawful, given that a court case in 2018 ruled that licence fees should be split into two parts, the first part being an application fee and the second part being payable once the licence has been granted.

The RLA is now calling for the authority to review both the accreditation and licensing scheme as a matter of urgency.

David Smith, policy director for the RLA, said: “The RLA is deeply concerned at the serious legal questions that hang over the council’s licensing and accreditation scheme.

“We would strongly urge the council to review this unjust scheme.”

In May, the RLA wrote to Oxford City Council raising concerns that the council’s accreditation scheme breached EU law because landlords could only become accredited if they attended training courses in person.

Since then, the RLA and Oxford City Council have worked together to amend the accreditation scheme.

By ROSALIND RENSHAW

Source: Property Industry Eye

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HMO Property Investments Popular As House Sharers Get Older

Buy to let property investors are increasingly looking to HMO property investments as house sharers get older.

The latest data from property sharing platform, ideal flatmate, has looked at the changing face of the house share landscape and how more and more people above the age of 50 are prepared to be house sharers as a viable way of living.

Sharing houses has become a popular choice for many, particularly in major UK cities, where the cost of renting is too high to tackle alone.

House sharers are traditionally young people, with the 18-25 age group accounting for 43 per cent, while another 36 per cent are in the 25-35 age group.

As people become older, they are normally less likely to be house sharers, with 35-45 year-olds making up 13 per cent, 45-55 year-olds 6 per cent, and just 2 per cent of house sharers aged over 55.

However, this trend is starting to change.

just in this year so far Ideal Flatmate has seen an increase of 74 per cent in the number of over 50s using the platform compared to 2018, indicating that the older generation is coming around to the idea of being house sharers.

Co-founder of ideal flatmate, Tom Gatzen, thinks perceptions are starting to change and being house sharers has lost the ‘stigma’ it used to have, as rents continue to climb, and the issue of affordability grows ever larger. He thinks that ‘people of all ages are starting to band together and tackle the rental market in whatever way they can’.

He said: ‘Age is just a number and it’s one that doesn’t seem to hold any bearing what so ever when looking for that ideal flatmate and we expect that the fabric of the UK rental sector will continue to evolve as a result of this diversity and acceptance.’

Buy to let property investors can benefit from this new-found enthusiasm for house sharers with HMO investments that tend to bring higher rental yields.

Source: Residential Landlord

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Landlords and lenders need to be up to date with new HMO regulations

IN APRIL the Houses in Multiple Occupation Act (Northern Ireland) 2016 came into force. It brings the regulations for Houses in Multiple Occupation (HMOs) in line with the rest of the UK and imposes tough new requirements on landlords to avoid overcrowding in residential properties. It is a legislation that landlords, managing agents and lenders need to be aware of.

An HMO is a property in which three or more people from two or more different families live. It includes properties that have been converted into self-contained flats. Previously, it was the property that was the subject of the HMO Licence – and licences were granted by the NI Housing Executive, subject to certain works undertaken by the landlord to bring the property to HMO standards.

But this has now changed, and the responsibility for licensing is now passed to local councils. A landlord now must apply to register themselves as an HMO provider and must prove they are a fit and proper person to hold a licence and that granting the licence will not breach planning.

This regulation will impact landlords and managing agents across Northern Ireland, particularly those owning properties let to Queen’s University and Ulster University students at their various campuses and those intending to sell residential property portfolios.

Generally, the licence will be granted for a five-year period, but this can be shortened by the council. Licences are also subject to renewal and can also be revoked. An owner of an HMO must apply and have a licence before it can be used as an HMO and the council can refuse to grant a licence if it is not satisfied that the property has the relevant planning permissions. Though, if applications are revoked or refused, there is an option to appeal.

When ownership of a property is transferred, any existing HMO licence also ceases to have effect. This may cause difficulties for vendors and purchasers with properties being sold with existing tenants in sit. The onus will be on the purchaser to apply for and be granted a new licence as the landlord for each property it acquires.

If a property does not have the relevant planning, then a Certificate of Lawful Existing Use or Development (CLEUD) must be obtained to evidence planning, before any HMO application is made by a prospective landlord.

In order to make a CLEUD application, five years continuous use of the property must be demonstrated and proven. It will be important to have five years’ tenancy agreements and rental statements showing payments in this regard. In the alternative, a purchaser may lodge a planning application for change of use but given the over saturation of HMOs in certain areas in Northern Ireland, though there is no guarantee that planning will be granted and could be refused. This could leave a purchaser and a lender in a difficult situation.

Landlords can be prosecuted and fined if they are found to be operating an HMO without the appropriate licence and managing agents can also be prosecuted if they are complicit in the landlord’s activities.

It is therefore imperative proper advice is obtained from both a legal and planning perspective whenever a client is considering acquiring an HMO (and a lender is funding that purchase) – to ensure the property and the landlord do not fall foul of the new legislation.

Managing agents should also ensure their clients meet the HMO requirements when letting such a property on their behalf. This is a complex piece of new legislation and those dealing with residential real estate and HMOs, must familiarise themselves with it to avoid issues in the future.

By Alison Reid

Source: Irish News

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Councils must crack down on rogue letting agents

Local authorities must take much firmer action against rogue letting agents that tarnish the image of the private rented sector, the National Landlords Association (NLA) has said.

New research by the NLA found that more than half of local authorities did not prosecute a single letting agent in the four-year period from 2014/15 to 2017/18.

In a Freedom of Information (FOI) request to 20 local authorities, the NLA discovered that 53 per cent of local authorities did not prosecute any letting agents.

A further 32 per cent prosecuted three or fewer.

Liverpool City Council was the outlier, prosecuting 13 letting agents. By contrast, Hammersmith and Fulham Council did not even bother to respond to the FOI. Of the 20 councils questioned, 13 had already introduced landlord licensing schemes.

The NLA expressed concern at the fact that some letting agents make unauthorised alterations to a landlord’s property, leading to a breakdown of trust between the tenant and the landlord.

In addition, they sometimes let out a landlord’s property to multiple tenants, effectively creating an illegal “house in multiple occupation” (HMO).

Given that the licensing laws on an HMO are stricter than those for a single occupancy property, this can leave the landlord liable to fines of up to £30,000 or even criminal charges.

Richard Lambert, CEO of the NLA, said: “It is clear that too many local authorities to failing in their duty to prosecute rogue letting agents.

“These bad ones can really poison the relationship between landlords and tenants. We want to see local authorities take much firmer action.

“We were shocked to find that so few letting agents are being prosecuted by local authorities. While many local authorities have introduced licensing schemes to crack down on rogue landlords, they seem to be allowing letting agents to get off scot-free. This must stop.

“In the meantime, landlords should make sure their chosen agent is reputable and is a member of a client money protection scheme that will safeguard their assets — rental money, deposit or other funds — if they misappropriate them or go bust.”

Source: Simple Landlords Insurance

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Council proposes crackdown on student Houses of Multiple Occupation

Houses with several students living in them could face tougher restrictions under new plans approved last night by Broxtowe Borough Council.

Families are thinking of leaving the area, because the number of student Houses in Multiple Occupation (HMOs) have increased so much around Beeston, according to one councillor.

Several councillors said the number of HMOs has ‘eroded the character of parts of Beeston’.

Currently, no additional planning permission is needed to convert a ‘family house’ to an HMO in Broxtowe if there are six or fewer students living there.

With two successful and growing universities, and pressure for student housing still high in the city, there has been a growth in recent years of student living across the border in Broxtowe, and Beeston in particular.

Now, concerns are being raised about the quantity of HMOs, and Broxtowe Borough Council is looking to impose new restrictions.

In Nottingham, to convert a ‘family house’ to an HMO, you need to get special planning permission if there are going to be three or more unrelated people living in a house – lower than the threshold in Broxtowe.

Now, Broxtowe is considering bringing its rules in line with the city’s, and is now looking into whether a policy would work.

It is hoped the move could help the council control the amount of new applications it receives, and give it power to reject applications it feels are inappropriate.

However to impose a scheme like this, the council has to have evidence showing there is a need for the new measures.

Now, Broxtowe Borough Council plans to collect this information, before a scheme could potentially be introduced by the end of the year, or early next year.

Councillor Lynda Lally represents Beeston Central for Labour, and said: “I’ve never known anything in the 20 years of being a councillor for Beeston Central which has been as controversial as this, apart from the tram.

“I genuinely feel this is a huge probelm, and we can’t just say ‘we’ll see how this goes’, we can’t do that any more.

“I’ve had people in an emotional state saying I’m going to move out of here because I can’t stand what’s happening to my street any more.

“Family homes with three bedrooms are turning into homes with eight, nine and 10 bedrooms, so I’m really glad we are tackling this.”

“We cannot see our communities destroyed any more.

“This is not against students, this is about getting a better mix.”

Councillor Stephen Carr is the leader of the Liberal Democrats, and represents Beeston North.

He said: “Nottingham seems to now be saturated with HMOs.

“Just over the last few months (in Broxtowe) there are more, and more and more (HMOs) coming in.

“What we are trying to prevent at this stage, is not shutting the door after the horse has bolted, but preventing us becoming Dunkirk, or Lenton which, when you go there now when the students aren’t there, it’s deserted. It has no character, it has hardly any families left.

“We really need this policy quickly.”

The plan was approved unanimously at a meeting of Broxtowe Borough Council’s Jobs and Economy Committee yesterday (Thursday, July 4)

By Local Democracy Reporters

Source: West Bridgford Wire

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Help for landlords who struggle to keep up with pace of change

Many landlords in the UK are struggling to keep up with changes to the law that have been introduced over the past year, according to an independent survey.

Some 30 per cent do not understand the changes to House in Multiple Occupation (HMO) licensing, which came into effect in October 2018 and 28 per cent are not aware of the abolition of Section 21, which came into force at the start of June 2019 to prevent unfair tenant evictions.

The survey commissioned by bridging lender Market Financial Solutions, also found that 27 per cent are uncertain about the tenant fees ban, with a further 19 per cent saying they understand the reform but are unsure how it will affect them.

When it some to tax, there was also significant confusion, with the poll showing that 28 per cent do not understand the reforms to inheritance tax that have changed the tax free allowance on properties being passed down and 25 per cent do not know about the reforms affecting tax relief on mortgage repayments, which were implemented in April this year.

The research also found that far more landlords opposed these reforms than supported them.

Some 44 per cent are against the banning of letting fees, compared to 23 per cent in favour, 37 per cent against the abolition of Section 21 with 16 per cent in favour, while 48 per cent are against changes to buy-to-let mortgage relief and 16 per cent for.

Source: Simple Landlords Insurance

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Brent Landlord Ran Illegal HMO Earning Almost £70k Per Year

A Brent landlord running an illegal HMO (House in Multiple Occupation) was estimated to be raking in £68,400 a year.

Officers from London’s Brent council found 16 people crammed inside the unlicensed HMO, a converted three-bedroom semi – including three in the shed.

The Council raid followed tip-offs from neighbours. Fly-tipping and the constant coming-and-going from the property had led neighbours to complain to Brent council’s enforcement team.

The three tenants in the shed were found to be paying the Brent landlord up to £800 per month for the privilege.

One family of four told officers they were paying the landlord £800 a month to live in a single, windowless room on the ground-floor.

Tenants had no written tenancy agreement from their landlord or any cash receipts for their rent payments – with the Brent landlord estimated to be raking in £68,400 a year.

The illegal house in multiple occupation operated by the Brent landlord also lacked a working fire alarm system, had poor maintenance, and also had poor ventilation.

Cllr Eleanor Southwood, cabinet member for Housing and Welfare Reform, confirmed that the Brent landlord ‘faces a hefty fine for breaking the licensing laws around houses in multiple occupation’.

She said: ‘We will do everything in our power to protect vulnerable tenants from this kind of gross exploitation. Every renter in Brent deserves to live in a home that is safe and maintained to a decent standard.’

Earlier this week, Brent council’s cabinet backed changes to the way limited social housing is allocated in the borough – with homelessness increasing and a third of the borough’s residents in PRS.

The cabinet is driving forward an ambitious programme to build 1,000 council homes, increasing affordable housing through the council-owned company i4B and London-wide Capital Letters initiative, and driving up standards in the private rented sector.

Source: Residential Landlord