licensing Armley Park Road
Marketing No Comments

Licensing lottery: Some councils unprepared for changes to mandatory HMO licensing

Too many local authorities are unprepared for the changes to mandatory licensing that are due to come into force in less than two weeks’ time, the RLA can reveal.

The changes will require landlords who let a property to five or more tenants forming two or more households to apply to their local authority for a licence, irrespective of building size. A licence is valid for up to five years, and each HMO property requires a separate licence.

Despite the legislation change set to affect over 177,000 properties, the RLA is concerned that there are still many councils unprepared for this change, and has now written to MHCLG about this.

A lottery

While some councils, for example Birmingham City Council, Newcastle City Council and Havering Council ARE prepared for the change to mandatory licensing, the RLA has discovered that many councils are completely unprepared.

Examples include Manchester City Council, which does not yet have an online system up and running for landlords to apply for a licence, and Hackney Council, which does not yet have the necessary forms available on its website for landlords.

Out of date information

Some councils also have out of date information around mandatory licensing on their websites. For example, in the definition of a HMO, they state the current ‘three storey rule’ – this is that HMOs compromise of 3 or more storeys, occupied by 5 or more persons from two or more households. However, the websites fail to state that as of 1st October 2018, this will change, with the three storey rule set to be phased out.

Yet others are issuing licences for a much shorter period than the standard 5-year licence.  All new HMO licences issued by Norwich will be for just one year, meaning a vastly increased amount of paperwork both the council and landlords have to deal with.

The RLA is therefore reminding landlords that if they have a HMO property that will fall into the extended scope of mandatory licensing which does not already have a licence, they MUST apply for one BEFORE the 1st October. There is no grace period, so it is imperative for landlords to apply for a licence, or else they could face a fine or prosecution and a rent repayment order.

What the RLA has been doing

In ongoing preparation for the changes, the RLA has written to over two hundred local authorities reminding them of the changes to mandatory HMO licensing. You can read the letter we have been sending to councils here

In addition to this, the RLA has also written to some local authorities in relation to licence fees. For example, Cheshire East Council has been increasing the cost of licences-which they say will ensure that they can respond to increased demand of properties which will soon fall into the scope of mandatory licensing.  You can read more about this here. 

What you need to do

If your property requires a mandatory licence, and you have not yet applied, you must get in touch with your local authority about this. Each local authority will have different communication strategies. As there is no grace period for the new law, you need to act now so that you are not in breach and at risk of being fined.

Source: RLA

Marketing No Comments

Cheshire East Encouraging HMO Licensing

Cheshire East Council is reminding buy to let investors that new legislation is set to come into effect in October requiring that all houses in multiple occupation (HMOs) with over five occupants must be licensed.

From 1 October 2018, HMOs must be licensed if there are five or more occupants who are living in two or more separate households. This is regardless of how many storeys the home is. This means that around 500 of the approximately 600-650 HMOs in Cheshire East will require a compulsory licence. This is in stark contrast to the 51 who currently need it.

Landlords are being advised to ensure that they have completed their licence application ahead of the deadline. Operating without a licence is a criminal offence and any landlords who do so will face an unlimited fine.

Cheshire East Council cabinet member for housing, planning and regeneration, Councillor Ainsley Arnold said: ‘The changes in government legislation will allow us to bring HMOs under closer scrutiny and help ensure better management standards and living conditions for tenants. Our housing standards team is currently processing more than 40 licence applications from landlords and carrying out the necessary inspection visits. However, we know that there are many more properties that will require a licence and we urge landlords, who have not already done so, to submit their applications as soon as possible.’

The council is also aiming to encourage people to report any properties in their local area that they believe to be HMOs.

Councillor Arnold added: ‘Thank you to everyone so far who has reported the location of a HMO to us via our website. Our online reporting form takes just a couple of minutes to fill in and the information received allows our officers to investigate whether the properties are licensed and check that they are safe for people to live in.’

Source: Residential Landlord

HMO
Marketing No Comments

​Deadline to new HMO licensing approaches

Agents and landlords are reminded that new rules about the licensing of Houses in Multiple Occupation (HMO) are set to come into force next month.

All properties housing five or more people from two or more separate households will be required to have an HMO licence, from Monday October 1.

At the moment, a property with five or more tenants from separate households only requires an HMO licence if it has three or more floors.

The new legislation – which was first announced in December – will also see minimum space requirements updated.

From October, the minimum bedroom space will be 6.51 square metres for a single bedroom and 10.22 square metres for rooms occupied by two adults. Rooms housing children aged ten or below will need to be a minimum size of 4.64 square metres.

Landlords will also be required to provide an adequate number of bins for their properties.

The cost of HMO licences varies depending on the local authority, with some charging a few hundred pounds and others charging more than £1,000.

An HMO licence is valid for five years and landlords need a separate licence for each HMO they let.

The Ministry of Housing, Communities and Local Government has said that the new rules are being introduced to minimise rogue landlords taking advantage of increased demand for HMOs.

It says that the previous system meant that it was ‘pot luck’ whether a vulnerable tenant ends up renting from a rogue or good landlord.

The aim of the new rules is to reduce consistent rental property problems, including overcrowding, failure to meet health and safety standards and housing illegal migrants.

Fines for non-compliance with HMO licensing rules are unlimited, while failure to comply with minimum bedroom sizes could see a landlord fined up to £30,000.

Source: Simple Landlords Insurance

HMO
Marketing No Comments

Agents and landlords ‘left in dark’ over new HMO requirements despite huge penalties

Letting agents are reminded that the clock is ticking towards the October 1 deadline, when the rules on mandatory HMO licensing change across England.

There has been no government campaign to raise awareness among agents and landlords, and nothing to explain what appears to be a little-known exemption. This is despite the possibility of swingeing penalties.

Currently, properties of three or more storeys, shared by five or more people in two or more households, where facilities such as kitchen or bathroom are shared, must have a mandatory HMO licence.

On October 1, the “storeys” criteria is removed and any property, of any height, that meets the other criteria must be mandatorily licensed.

What agents may not know is that there is an important exemption: purpose-built flats within a block containing three or more self-contained flats are excluded from the requirement.

Nothing from the housing ministry has explained this or other new HMO rules – and yet the penalties are potentially severe enough to close a business down.

An HMO that is not licensed when the law requires it could land the agent or landlord, or both, with a criminal prosecution and record, an unlimited fine, and an order to pay court costs and a victim surcharge.

Alternatively, the council could issue a civil penalty of up to £30,000 and a rent repayment order of up to 12 months’ rental income.

While a property is unlicensed, a Section 21 notice cannot be served.

Licensing expert Richard Tacagni said agents should be absolutely certain that HMO properties falling under the new rules are licensed promptly.

He said: “Many agents don’t yet fully appreciate the implications, and their criminal liability if an application is not submitted on time.”

An excellent guide by Tacagni for all agents in England is here:

https://www.londonpropertylicensing.co.uk/mandatory-hmo-licensing

A second article is especially aimed at London agents but does explain the exemption for flats in purpose-built blocks of three or more apartments.

It also reveals that many London authorities – and this may well apply to councils outside the capital – are not making the process for HMO licence applications particularly easy.

https://www.londonpropertylicensing.co.uk/three-week-countdown-mandatory-hmo-licensing-rules-change-1-october-2018-are-you-ready

Source: Property Industry Eye

HMOs HMO
Marketing No Comments

Understanding HMOs…

If you have at least three tenants living in a property and they share a toilet, bathroom or kitchen facility, then the property is a House in Multiple Occupation (HMO). This means that special rules will apply to the property and it may need to be licensed by the council if it has three storeys or more with five or more occupants. Though it should be noted that local authorities do have the power to impose additional HMO Licensing on other, smaller types of HMOs.

THERE ARE SOME EXCEPTIONS, THOUGH…

Certain types of properties are exempt from licensing. Examples include:

• Two-person flat shares, which is a property that is lived in by no more than two ‘households’ each of which consists of one person.
• A property where the landlord and their household lives with up to two tenants
• Buildings occupied entirely by freeholders or long leaseholders

WHAT IF I HAVE A FLAT?

Flats have special provisions and a block of converted self-contained flats will not require an HMO licence, and a block of purpose-built flats can’t be an HMO as a block, but as individual flats can fall into the HMO category.

DOES IT MATTER HOW MANY OCCUPANTS LIVE IN THE PROPERTY?

Yes, any part of a building that is occupied by two people cannot be an HMO. For the property to meet HMO requirements, there must be at least three people involved.

IS THERE A SIMPLE WAY OF IDENTIFYING AN HMO?

In short, if your property includes the sharing of a toilet, washing and cooking facilities by three or more unrelated people in two or more separate ‘households’, which can be formed by just one person, then it’s likely that the property is an HMO.

If your property is in a block of converted self-contained flats, or mixed accommodation, and there are three unrelated people living there, it can still be an HMO despite there not always being a sharing of the washing and cooking facilities.

NEW RULES FOR HMO PROPERTIES

From October 2018, professional landlords investing in HMOs will need their properties to meet a new level of standards:

The new HMO rules are covered by The Licensing of Houses in Multiple Occupation (England) and can be read here. This was agreed by parliament on February 23rd and will come into effect across England this year on the 1 October 2018.

Under the new rules, bedrooms must be a certain size, with double bedrooms being at least 10.22m2 and bedrooms for under 10s at least 4.64m2. If the bedrooms are smaller than this, they cannot be used as sleeping accommodation.

The new rules will also see the definition of an HMO changing, with more landlords needing HMO licences and smaller properties also needing a licence.

Don’t let this put you off if you are thinking of investing into this market – HMOs can still attract higher yields than other types of buy-to-let investment properties and, if you are considering entering the market, using a mortgage broker that has access to a wide panel of specialist lenders is imperative.

Source: Property Forum

landlords
Marketing No Comments

HMO landlords: prepare for new rules

The government is cracking down on overcrowded house shares. If you’re an HMO landlord, make sure you’re up to date.

Landlords have just weeks to ensure they’re ready for new “houses in multiple occupation” (HMO) rules, which come into effect in England on 1 October.

The new regulations will bring more properties into the category of “multiple occupation housing” – this is where five or more people from two or more separate households live in one property (house shares, in other words). While at present a property is only classed as an HMO if it has three or more storeys, according to the new rules an HMO is a building or a converted flat where tenants share toilet, bathroom or kitchen facilities. This will mean roughly 160,000 additional properties will require an HMO licence, reckons the Residential Landlords Association. The new rules form part of the government’s attempt to crack down on landlords letting out overcrowded, sub-standard properties.

As well as widening the scope of what constitutes an HMO, the updated legislation adds some new conditions. The first sets out minimum space requirements. Landlords will be prohibited from letting rooms to a single adult where the usable floor space is less than 6.51 square metres (sq m). Rooms occupied by two adults will need to be at least 10.22 sq m, while rooms slept in by children aged ten and below will need to be at least 4.64 sq m. Local councils will have the discretion to require larger room sizes, but they won’t have the power to allow smaller rooms to be occupied.

Where a landlord is found to be letting a room that doesn’t meet the minimum size, local authorities will be able to grant a period of up to 18 months to rectify the situation. If no action is taken in this time, the landlord will be in breach of their licence and could either be prosecuted by the local authority or receive a financial penalty of up to £30,000. Another update is that landlords are now required to provide an “adequate” number of bins. Failure to do so is a breach of the licence and a criminal offence.

In terms of current HMO requirements, landlords must ensure that the manager of the house – either the landlord or an agent – is “fit and proper”, which means no criminal record or history of breaching landlord laws. Landlords must also send the council a copy of their gas-safety certificate each year, install and maintain smoke alarms, and provide safety certificates for all electrical appliances.

To apply for an HMO licence, contact your local council. Licences are valid for five years and you need a separate licence for each HMO you run. Landlords who already hold an HMO licence can continue to let their property until it expires; they will then have to apply for a new licence and make changes to their property so that it meets the new rules.

Licence costs vary from council to council. For example, Cambridge City Council currently charges £580 for a licence for an HMO of up to nine rooms, and £470 for renewing a licence. Croydon Council charges £250 per habitable room, so a licence for a five-bed HMO would cost £1,250.

Landlords face unlimited fines for renting out unlicensed HMOs. Even if the council takes no action, the tenants could apply for a rent-repayment order to reclaim up to 12 months’ rent, and while the property is unlicensed, the landlord cannot use a Section-21 notice to seek possession of the property. Note too that local councils can add other conditions to licences, such as improving facilities.

Source: Money Week

Marketing No Comments

Southampton could see 10,000 HMO homes by 2023

SOUTHAMPTON is expected to see more than 10,000 HMO licensed homes in the city by 2023, after civic chiefs gave the go-ahead to extend the scheme by another five years.

Since its inception in 2013, the legislation, which covers homes in Bevois, Bargate, Portswood, and Swaythling wards, has resulted in 4,800 licences being issued.

Now, the authority estimates up to 5,500 more homes will require licensing over the next five years.

Council leaders have branded the HMO (House in Multiple Occupation) legislation, which allows three or more occupants from different families to live together, “much needed” and a “huge success”.

Student houses are one of the main users of the licence.

The council also says the scheme has dealt with issues of poor property conditions, bad management and anti-social behaviour.

Steven Hayes-Arter, HMO licensing manager at the council, said: “This ensures safe, good quality private rented accommodation is available to meet housing needs in the city.

“The scheme has enabled that concerns and complaints about conditions and the impact of the property on the local community can be addressed effectively and promptly, such as noise nuisance and anti-social behaviour.

“The numbers of complaints about HMOs have fallen since the additional scheme was introduced in 2013.”

When it was first proposed in 2013, the plans were hit with heavy resistance from opposition councillors.

But civic chiefs pushed them through regardless, which they say was the “right thing to do”.

Former housing chief at the council, Councillor Warwick Payne, said: “At the time, it seemed quite a radical idea. Now it is seen as the norm.

“We had resistance to it in 2013, but this time around we have seen much less, which shows that it has been successful.”

Council leader Chris Hammond added: “Despite changes to the way HMOs are regarded, this is still needed in these areas.

“The impact it has had on these neighbourhoods has helped our communities for the better.”

It is estimated that there are between 6000-7000 HMOs in the city but not all HMOs require licensing.

Source: Daily Mail

court case Highland landlord agent
Marketing No Comments

Court Case Legal Precedent For Landlord Challenges To HMO Licensing Cost

A recent court case may have set a legal precedent enabling landlords to challenge the cost of HMO licences set by their local authorities.

The court case of Mr Peter Gaskin v LB Richmond Upon Thames [2018] EWHC 1996 (Admin) has called into question the validity of certain licensing costs. Currently, by law local authorities are able to set the cost of HMO licences at their own discretion. The topic has gained traction recently as new rules for HMO licensing will come into effect from October 1st. It is estimated that a further 177,000 more landlords will need to obtain a licence.

However, in the recent court case it was ruled that licence fees can only cover the cost of the licensing scheme and not other costs such as enforcement. This was due to the fact that the Administrative Court decided that Mr Gaskin, a HMO landlord, was providing a service within the meaning of EU law, by the private letting of accommodation. As Mr Gaskin had met the requirements for providing a service, the court determined that the fee charged by the local authority had to be structured in such a way which complied with EU law.

The property in question is situated in Richmond Upon Thames in London. Under the Housing Act 2004 Mr Gaskin was required to obtain a HMO licence from the London Borough of Richmond before he was permitted to let out rooms in the property. HMO licences need to be renewed every five years and when the time came for Mr Gaskin to renew his he was told by the council that he would need to pay a fee which covered the costs of processing his application but also contributing towards the authority’s costs of running the HMO licensing scheme. Mr Gaskin refused to pay the amount requested, instead offering a lower sum.

The landlord was prosecuted in the Magistrates’ Court for operating an HMO without a licence. However, under EU Directive 2006/123/EC (“the Services Directive), there is a provision in its article 13(2), that where a charge is imposed for someone to apply to have access to a service activity, the charge is not permitted to exceed the cost of the authorisation procedures. The Administrative Court handed down judgment on July 31st, 2018, and stated that Mr Gaskin was providing a service within the meaning of EU law. Which therefore deemed that the London Borough of Richmond Upon Thames’s fee for an HMO licence was unlawful as the charge covered costs beyond the cost of processing the licence application. The council was therefore not entitled to demand the fee which it had demanded.

Chief executive at Commercial Trust Limited, Andrew Turner, said: ‘This is an interesting case which may set a precedent for some landlords and could have the potential to save HMO landlords hundreds of pounds, if some local authorities have been charging more than they were legally entitled to, for HMO licences. This is a matter of law and I would urge any HMO landlords that believe they may have been overcharged, to seek professional legal advice.’

Source: Residential Landlord

Marketing No Comments

Sneinton Landlord Prosecuted For Aggressive Behaviour

A Sneinton rogue landlord has been prosecuted by Nottingham Magistrates Court for acting aggressively towards his tenant.

Landlord Sahfaqat Ali Sadiq threatened to throw his tenant’s belongings onto the street. Nottingham City Council became aware of his behavior following a complaint from a tenant who claimed to have been ‘forcibly removed’ from a house despite paying rent and not causing any damage to the property.

The council discovered that the tenant had not received any paperwork from Sadiq, of Vicarage Avenue, Derby, after paying his deposit and rent in cash. It was also reported that the landlord had let himself into the Sneinton house on a number of occasions in pursuit of money that did not belong to him.

The tenant also claimed that Sadiq had acted aggressively towards him by shouting and threatening to throw his belongings into the street. The landlord then placed kitchen items into bin bags.

Upon inspection, it was discovered that the Sneinton house did not have the correct licensing for a house in multiple occupation (HMO).

Sadiq was found guilty of aggressive practices, failing to protect a tenancy deposit and operating a House of Multiple Occupation (HMO) without a licence at Nottingham Magistrates’ Court on Friday. He was fined £1,750.

Nottingham City Council stated that the three offences fell beneath the Housing Act 2004 and Consumer Protection from Unfair Trading Regulations.

Sadiq denied assaulting one of his tenants. He also stated that he had submitted an application for a HMO licence which he assumed was being processed as he had not heard of its progress.

Portfolio holder for housing and planning, Councillor Jane Urquhart, said: ‘Landlords are required to manage their property in accordance with the law. Failing to secure tenants’ deposits and acting aggressively towards them is not acceptable. This case shows that Nottingham City Council will take robust action through the courts to prosecute rogue landlords.’

Portfolio holder for community protection, Councillor Toby Neal, added: ‘This is a great result for the council, showing the importance of different teams working together and using consumer protection legislation to protect vulnerable tenants.’

Source: Residential Landlord

landlords
Marketing No Comments

Landlords warned over housing rules as £16,000 fine dished out in

Warnings have been issued to rogue landlords in Wolverhampton after council officers issued a £16,000 penalty to a homeowner flouting the rules.

Wolverhampton council handed a Whitmore Reans landlord the huge financial penalty for running a house in multiple occupation (HMO) without a licence.

It is the first time the council’s housing team issued a civil penalty to a landlord for failing to abide by its rules.

Deputy council leader Councillor Peter Bilson said the case should serve as a warning to landlords across Wolverhampton.

The cabinet member for city assets and housing added: “This is a stark warning to private sector landlords that they must comply with the HMO rules in the Wolverhampton.”

The council said the fine, which will be reduced to £10,600 if paid in full within 28 days, signals the start of a tougher approach to managing private sector landlords.

Powers are now in place to enforce civil penalty notices of up to £30,000 per offence, and new licensing rules for HMO will come into force on October 1.

Government officials will bring in the changes to HMO licensing in a bid to improve standards of housing across the country.

Key changes will include needing to obtain licences for some properties occupied by five or more residents, living in two or more separate households and sharing amenities.

It will apply to single and two-storey properties, as well as purpose-built, self-contained flats in a block of no more than two self-contained flats.

Councillor Bilson added: “Through our Rent with Confidence framework we continue to work closely with private landlords across the city.

“It is important they are fully aware of the new government regulations that come into effect from October 1 and that we will be doing everything in our power to enforce them.

“Rent with Confidence supports responsible private housing businesses in the city and aims to improve the quality and choice of housing for private sector occupiers.

“We are here to advise landlords on the new changes and we will continue to work with landlords, agents, owners and service users by providing a range of information and guidance through the Rent with Confidence scheme.

“Providing further protection of health, safety and welfare rights for tenants in the city is vital.”

Last year, the council announced it would be extending enforcement powers handed to its officers so they could dish out fines of up to £30,000 to landlords breaking housing laws.

But the council may reduce the charge if rogue landlords agree to work to address issues.

They will need to agree to be registered with the Rent with Confidence scheme – a five-star rating system – and achieve at least a three star rating.

Source: Express and Star