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‘Cost-cutting with a view to profit’: Letting firm fined for string of faults at HMOs

A letting company has been fined over a string of defects at its shared accommodation for vulnerable adults.

Salop Lets, based in Madeley, Telford, has been ordered to pay more than £43,000 after pleading guilty to 24 offences under the Housing Act 2004.

The company had previously tried to blame the problems on its tenants – vulnerable adults who lived in three houses of multiple occupation in Hurleybrook Way, Leegomery.

The defects included broken and damaged fire doors and incomplete and missing safety certification for the the fire alarm systems, Telford Magistrates Court head.

General faults such as broken showers, damaged kitchen units and broken or missing lighting units were also found, as well as emergency fire alarms and lighting being connected to a pre-paid metered electricity supply, meaning when the meter ran out, the emergency systems did not work.

The issues were brought to light following an inspection from environmental health and a fire safety officer from Shropshire Fire and Rescue Service.

An initial complaint was made back in February.

The court heard improvement notices had been served to ensure the properties were brought up to the required standard, but the work was either done to a poor standard or not at all.

In one instance the company installed a second-hand fire door claiming it to be new.

Prosecuting, Sarah Morgan, said: “Very little work was done during the operation of the improvement notices.

“I would draw your attention to the past history of the company and consider that they were cost-cutting with a view to profit.

“They were a professional management company. They chose to house vulnerable tenants but failed to manage the risks associated with this”.

The court heard that since 2015 housing benefit totalling nearly £1.5 million had been paid in respect of properties managed by Salop Lets.

The company was fined £31,500 and ordered to pay £11,462.07 costs and £170 surcharge.

Sentencing the company, district judge Rebecca Crane said it had fallen far short of the housing standards expected and had ignored concerns raised by Telford & Wrekin Council, adding that there was a risk of death or life-changing injury from the company’s failure to maintain fire alarms and fire doors.

Councillor Richard Overton, Telford & Wrekin Council’s cabinet member for housing and enforcement, said: “The safety of our residents is of paramount importance.

“That is why we are working hard to make sure that private rented housing is safe for tenants to live in.

“Earlier this year we set up the rogue landlord taskforce as part of our Better Homes For All package to improve housing in the private rented sector.

“This case highlights the vital work of this taskforce in keeping people safe.”

Source: Shropshire Star

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Huge Fine For HMO Licence Breach Landlord

A criminal landlord has been hit with a huge fine of £35,000 after being found guilty of breaching House in Multiple Occupation (HMO) management regulations.

Landlord David Greene, 64, was prosecuted at Birmingham Magistrates Court on August 30. The rental property that he was letting was described by council officers as the ‘worst they had seen in the last 10 years.’

The landlord had owned a three-storey property, which included ten self-contained flats, since 1986. He pleaded guilty to breaching HMO regulations through his rental property.

Birmingham Council officers visited the building and found smoke detectors hanging form the ceiling, as well as poorly fitted fire doors. There were also blocked fire exits which would have seriously hindered tenants’ opportunity to escape in a fire, rendering the property a serious danger for human habitation. There were also broken and boarded up windows. The tenants who lived in the building had no access to hot water or heating. The front and rear doors of the building were insecure, leaving the property open to the elements which would have caused real issues in winter.

The council had attempted to contact Greene on several occasions to resolve the poor conditions. However, he neglected his responsibilities as a landlord and as a result and put the lives of his vulnerable tenants in danger.

As a counter argument, Greene claimed that he had issues gaining access to the flats. However, he was still charged with the huge fine of £35,000 as well as costs of £1,941 and a victim surcharge of £170.

Cabinet member for homes and neighbourhoods at Birmingham City Council, Councillor Sharon Thompson, spoke out about the huge fine, saying: ‘Mr Greene has shown a callous disregard for his responsibilities as a landlord. This fine sends out a message to all landlords who ignore the law that Birmingham City Council will pursue anyone who lets out substandard accommodation.’

Source: Residential Landlord

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Why landlords need your help

Our recent research amongst landlords showed that only 21% said they were a full-time landlord. The rest had another job. So it is fully understandable why it is difficult for landlords to keep abreast of the constant flow of regulatory changes. Even those full-time landlords that I know struggle, so just imagine what it is like for the rest.

This is why having a financial adviser is so important for landlords, which is great news. Over the years we have read about perceived threats to the adviser community, from when the internet first begun through to robo advice and a new era of AI. But nothing can be further from the truth and landlords are now wanting a relationship that goes beyond pure advice on their mortgage.

This was reinforced in our research. Of those landlords using a financial adviser, 23% wanted help in understanding how new regulation affects them. There are changes to the licencing rules for houses in multiple occupation (HMOs) in October, for example. This has been discussed a few times within the media, but I suspect many of your landlord clients will be in the dark about this. For some, they may need to raise capital if they need to make any refurbishments and changes to comply with the new HMO licencing rules.

A further 35% of landlords, who use a financial adviser, said they need help understanding the implications of taxation, given the raft of rule changes that have been implemented. It is a complex area and I know some advisers are building reciprocal arrangements with tax advisers to determine if owning a buy-to-let property via a limited company is the right thing to do for the client. Nonetheless, the market is seeing a rise in limited company buy-to-lets. At Foundation Home Loans, over 40% of our buy-to-let applications are under this structure.

The buy-to-let market continues to change and because of this change, your landlord clients need your help more than ever – and there are lots of landlords out there who don’t have a financial adviser and are probably on the lookout for one. So take advantage before someone else does.

Source: Mortgage Introducer

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Thurrock Landlord Fined For Failure To License Investment Property

A Thurrock landlord has been fined £2,252 after failing to license her property and failing to provide acceptable living conditions for her tenants.

Rogue landlord Adeola Makinde was found guilty of failing to licence her rental property in Norfolk Place, Chafford Hundred. The property required a house in multiple occupation (HMO) licence. A trial at Basildon Magistrates Court last week lead to Makinde being prosecuted for her failure to sort this out.

The court was told that Thurrock Council had been requesting a HMO licence application from Makinde since 2014. However, no application was made.

An inspection in July 2017 revealed that the property contained 12 people living in four rooms as well as sharing a single kitchen. It also found that there were inadequate fire safety measures and a number of issues with the condition of the property which rendered it unfit for human habitation. The overcrowded nature of the property could have endangered the health of the tenants who lived inside as well as causing severe problems if a fire were to start and the residents needed to escape.

Makinde pleaded not guilty to the charge of failing to licence the HMO, three breaches of HMO management regulations, failing to return information about the house and failing to return documents. However, magistrates deemed her actions were unreasonable and therefore found her guilty of all six charges.

Councillor responsible for Thurrock housing, Barry Johnson, said: ‘We believe everyone should have a good quality place to live and will continue to take action against those landlords who fail to ensure their properties are safe, well managed and properly licensed. We are currently consulting on a proposed new additional licensing scheme which would mean more landlords who own shared houses and flats have to comply with national health and safety standards and local criteria.’

Source: Residential Landlord

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Havering Council Clamps Down On Rogue Buy To Let Behaviour

Havering Council has distributed £55,000 in penalty charges to rogue buy to let investors in the borough over the last two months.

Havering Council has initiated a clamp down on rogue landlords operating inadequate houses in multiple occupation (HMOs). Council officers and enforcement teams have been fulfilling this.

Since March, £55,000 has been issued in fines from eight financial penalty notices served to landlords. These came through the borough’s Landlord Licencing Scheme, which started in 12 wards across the borough earlier this year. The scheme requires private landlords of HMOs to apply for a licence. The programme was introduced to improve the poor management of private rented homes and hopes to curb anti-social behavior problems in the area.

One landlord was served two fixed penalty notices by Havering Council which totaled £20,000. The notices were issued as the landlord had been operating an unlicensed HMO in serious disrepair in Rainham. The property had no heating, exposed electrical wiring, and a dangerous outdoor staircase, which lead to the roof. This acted as an entrance to the HMO and put tenants at serious danger through the landlord’s irresponsible management of the property.

Cabinet member for environment, Councillor Osman Dervish, spoke out about the scheme’s success in clearing up the buy to let sector: ‘In Havering, we are targeting irresponsible landlords as we are seeing the rise of inadequate HMOs and we will not tolerate it. These rogue landlords are taking advantage of local families in the community with overcrowded and poorly maintained properties.’

The Councillor continued: ‘We’re being proactive in our efforts to crack down on this issue now, before it increases. We are one of the few boroughs who have this scheme in place and I’m pleased with what we have achieved so far, but there is more to do! Landlords of HMOs should take note and licence now to avoid such financial penalties.’

Source: Residential Landlord

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Immingham Landlord Fined For Licence Breach On Investment Property

An Immingham private landlord is facing a bill of £1380 after he was found to be renting his investment property out as a house in multiple occupation (HMO) without the correct licence.

Yordan Kaloyanov, 37, of Immingham, was taken to court by North East Lincolnshire Council. Housing enforcement officers and Humberside Police raided his rental property and discovered that he had been renting it to multiple people without a licence. The property also contained several other issues.

Upon entering the property it became apparent to officers that several people were residing there. Many of the rooms had multiple beds in them and there were far more shoes at the entrance of the property than there should have been. Although here was no one in the property when officers arrived, it appeared as though some residents had recently left the property as a freshly cooked lasagne and garlic bread was found in one of the bedrooms.

In addition to the licensing breach, the property failed to meet the standards required for a HMO. It had no interlinked fire alarms and there was no evidence that fire alarms worked or had been tested recently. There were also no fire doors, intumescent strips or self-closing arms on the kitchen or bedroom doors. Finally, the property also lacked emergency lighting and exit doors did not have the required thumb turn locks.

Kaloyanov also did not have the required locks to the rear final exit door and the front door of the property. This meant that so that they could be opened from the inside without the use of a key. This did not meet regulations stating that escape routes must be free from obstruction.

Portfolio holder for housing, Councillor Peter Wheatley, said: ‘A large number of local people rely on rented accommodation and landlords are expected to uphold high standards. Unlicensed and poorly maintained houses are not acceptable. Not only are they exploitative in nature, they could also put people’s lives at risk. The Council wants to work with landlords to ensure that they are on the right side of the law. If landlords are unsure of what they should be providing for their tenants, they can contact our housing team via our website for more information.’

Following the inspection, the house was issued with an Emergency Prohibition under the Housing Act. Yordan Kaloyanov was prosecuted and was found guilty of six offences under the housing act and handed fines of £100 per offence. He was also made to pay additional costs of £750 and a victim surcharge of £30.

Source: Residential Landlord

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HMO plans for former cafe recommended for approval despite local opposition

Plans to convert  into a 12 bedroom HMO could be given the go ahead next week, despite opposition from local community councils.

Members of Wrexham Council’s Planning Committee will debate the plans to convert the restaurant /café on 79 Holt Road into a ‘one person one room’ house multiple occupancy (HMO).

Plans for a change of use of the property were submitted to Wrexham Council in April 2018.

At present the existing property consists of a restaurant / cafe on the ground floor and five flats on the first and second floors.

A layout plan submitted by the applicant at the time shows that the 12 bedrooms would be be based across three storeys – with five bedrooms and a kitchen on the ground floor, four bedrooms on the first floor and three bedrooms and a smaller kitchen on the second floor.

Despite the plans being recommended for approval by the council’s head of environment and planning, the application has received opposition by both the local community council and by the adjoining Caia Park Community Council

Three objections were put forward by the community council, who say that the proposed use will result in a “very dense and over concentrated use of the site” and that the change of use will “increase pressure on the limited nearby off street parking and may result in vehicles reversing onto Borras Road.”

They also add that: “The proposed HMO and its associated use by tenants will result in an increase in noise and
potential to impact and cause nuisance to other nearby residents due to noise, crime and antisocial behaviour impacting on Community Safety.”

Caia Park Community Council also argue that “given the numbers proposed and the potential for resident’s vehicles it is felt that the scale of development is inappropriate.”

However comments submitted by the council’s highways department say that “the site is served by an existing access with adequate visibility in both directions” and that “it is therefore considered that the proposed development would in theory have a reduced demand compared to the existing dwelling/café.”

The application will be discussed by planning committee members on Monday 4th June at 4pm. For those unable to attend the meeting it will be webcast on the Wrexham Council website.

Source: Wrexham

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Bury Landlord Fined For Unlicensed Property In Poor Condition

A rogue Bury landlord has been ordered to pay nearly £3,000 after being found guilty of several breaches relating to an unlicensed HMO in the area.

Abdul Raza Saddiqui, aged 50, of Parkhill Road, Bury, was fined a sizeable £1,200. He was also ordered to pay £2,452 costs as well as a £30 victim of crime surcharge after being found guilty of 12 housing offences.

The rental property, located on Seymour Road in Crumpsall, M8, failed various minimum safety standards. These included fire safety and gas safety, seriously compromising the safety of the tenants in the property and potentially endangering their lives should there have been a fire.

Council officers also discovered other breaches of management regulations in the property. These included a lack of working fire alarm, damaged fire doors, cluttered escape routes and broken heating facilities. There were also damaged kitchen units, as well as filthy and verminous common areas that rendered the property unfit for human habitiation due to the lack of hygiene.

Saddiqui pleaded guilty to eleven offences of breach of HMO regulations, and one offence of a breach of a condition of his HMO licence at a hearing at Manchester Magistrates’ Court,

Deputy leader of Manchester City Council, Councillor Bernard Priest, took a hard line on rogue landlords in Bury: ‘There’s no place for rogue landlords in Manchester. Landlords have a responsibility to provide their tenants good quality, safe housing and we take the issue of tenant safety extremely seriously. We will continue to pursue enforcement action to defend the rights of tenants and will not hesitate to take legal action against anyone whose property fails to meet the required standards.’

He continued: ‘Our message to landlords is simple – bring your property up to standard, make sure your tenants are safe and get a licence where the law requires one.’

Source: Residential Landlord

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What brokers need to know about looming HMO changes

The new HMO rules for landlords that will come into force in October will extend the licensing requirements and may also affect room sizes. Brokers working within the buy-to-let market have spent the past few years getting their heads around a raft of recent regulatory and tax changes introduced to the market.

And it’s not over yet; new changes that will affect HMO landlords – as well as some landlords that might not consider themselves to own HMOs – are expected to come into force this October.

What do brokers need to know?

Last year, the government launched a consultation looking at HMOs and residential property licensing. The consultation aimed to give councils best practice guidance on standardising living conditions in HMO properties across the country.

The response to the consultation was published last December and this new legislation on licensing of HMOs is expected to pass through Parliament in the coming months, becoming enforceable in October.

Currently, properties with three or more storeys that are occupied by five or more people from two or more households require an HMO licence. However, the new rules coming into force in October will extend the scope of licensing for HMOs. An HMO licence will now be required for all properties with five or more people from two or more households, regardless of the number of storeys in the property, meaning a substantially higher number of properties will require a licence from October.

In addition to extending the licensing requirements, the government is also proposing the introduction of a minimum room size for bedrooms in licensed HMOs. The new guidance will recommend floor space be no less than 6.51 sq m and 10.22 sq m for single use and two adults sharing respectively. These new rules are expected to impact approximately 170,000 properties in addition to the 60,000 that already have an HMO licence.

What should brokers be doing?

Ultimately, brokers with existing or prospective clients with HMOs must ensure they understand fully the incoming changes so that they can support their clients in the best possible way. Brokers will play a vital role in raising awareness among those landlords whose properties will soon be classified as an HMO.

In addition, the changes represent an opportunity for brokers to further advise and support their clients. For example, for those clients affected by room size requirements or looking to convert their properties into HMOs or student lets, brokers can advise on how to access the funding to undertake these changes.

How can bridging finance help landlords?

One such funding route brokers can advise on is bridging finance. This is ideal for landlords needing a short injection of cash to complete conversions quickly. Indeed, some bridging finance providers will allow borrowers to acquire finance from day one before applying for planning permission, and even those that don’t will have shorter turnaround times and greater flexibility than other lenders.

Therefore, for clients needing to make changes quickly, bridging finance could be an invaluable route of accessing funding so that they can get the changes made within the necessary timeframe. This could be particularly beneficial for landlords who have already had to make changes to properties in their portfolios to comply with EPC regulations introduced this April.

The changes also represent an opportunity for brokers to further advise and support their clients

Changes to EPC regulations mean that landlords with properties with an ‘F’ or ‘G’ energy efficiency rating are required to make changes to their properties to improve their rating, or they face significant fines. These regulations affect both commercial and residential landlords and, while residential landlords won’t typically face high costs when making improvements, commercial landlords could face real problems if they aren’t able to improve their efficiency within the short timeframe – often as little as three months.

Things to remember

As mentioned, brokers have a vital role to play in advising their clients on these new regulations. First, this will mean raising awareness to ensure those landlords whose properties are going to come under the umbrella of an HMO are not only aware of the changes but also understand the steps they will need to take in order to get a licence. This will include finding the funding necessary to increase room size if needed.

Brokers will also play a role in advising those clients who want to either convert properties into HMOs or purchase them.

One final thing to remember is that landlords will be required to renew their licence through their local council every five years. Brokers must ensure that landlords are aware of this and also that they have a licence for each individual property in their portfolio.

Source: Mortgage Strategy

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Legislation change could catch out HMO landlords

New government rules mean thousands of buy-to-let investors will be forced to become licensed HMO landlords from 1 October.

The Residential Landlords Association claims that this will result in a further 177,000 landlords being subject to mandatory licensing. It will also affect all existing HMO landlords, who will have to ensure their properties meet new minimum standards.

Brokers are being urged to familiarise themselves with the new requirements, and contact clients who could be affected. Those that do not apply for the appropriate paperwork from their local council could be subject to unlimited fines and other legal action.

Many may also have to pay for property renovations to qualify for the licence.

Currently, a licence is only required for properties with three or more storeys that are occupied by five (or more) people from at least two households. From 1 October this will be extended to all properties that are occupied by five or more people from two or more households – regardless of the size of the property.

Licences are issued by the local council and are valid for five years. Landlords will have to demonstrate they are ‘fit and proper’, and that the property meets all relevant safety standards. Evidence of certain safety certificates will have to be updated on an annual basis.

At the same time, the government will introduce new minimum room sizes for licensed HMOs. At the moment some local authorities prescribe minimum room sizes, while others set out advisory standards.

Mortgages for Business chief executive David Whittaker says: “Many landlords will be unaware of these changes. They have been hit with a triple whammy of changes in recent years, so it is up to brokers to help explain how this latest regulatory change will affect them.”

He also pointed out that these minimum room standards may cause some problems for existing HMO landlords.

Mortgage Advice Bureau head of lending Brian Murphy says: “As an industry it is important that we have the right resources in place, with advisers equipped with the knowledge and experience necessary to help their customers.”

Coreco director Andrew Montlake says: “Whilst many of us understand why these changes have been instigated the quick timing between them means that landlords have had no respite in which to fully deal with them. We now need a period of calm to let this all bed in.”

Source: Mortgage Strategy