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Huge number of HMOs have no licence and are illegal, says new research

There is a non-compliance rate of 75% in unlicensed HMOs in London.

Research conducted by the private consultancy London Property Licensing for trade body safeagent – formerly NALS – has found over 130,000 unlicensed properties which should be licensed under mandatory, selective or licensing schemes.

The research, carried out through Freedom of Information requests, found there are over 310,000 private rented properties in London that require licensing.

However, non-compliance in the capital is rife.

Licence applications have been submitted for only 25% of the 138,500 private rented properties that require licensing.

Without a licence application submitted, these properties are being operated illegally and landlords and/or agents can face prosecution or a civil penalty of up to £30,000.

The landlord can also be ordered to repay up to 12 months rent.

Since October 2018, the mandatory HMO licensing scheme has applied to most HMOs shared by five or more people whereas it was previously restricted to properties three or more storeys in height.

In some boroughs, additional licensing schemes have extended licensing to properties rented to just three or four unrelated people.

The picture for selective licensing is markedly different, according to the research.

These schemes extend licensing to all private rented properties including single family lets within a certain geographical area.

Licence applications have been submitted for 85% of the 173,000 private rented properties that require licensing under selective licensing schemes in London– a non-compliance rate of 15%.

Added to the confusion over licensable properties, many London boroughs are struggling to process over 24,000 licence applications.

Currently, about 40% of boroughs still rely on paper applications.

Safeagent is calling for a simpler, more streamlined licensing process.

Safeagent CEO Isobel Thomson said: “The results of the survey are concerning.

“Consumers are not being well served and indeed many are being placed at risk through this mish-mash of licensing schemes.

“Right now, the system isn’t fit for purpose and councils are drowning in paperwork.

“Landlords needing property licences are either deliberately evading the schemes or are in the dark concerning their legal responsibilities, and tenants are being placed at risk.

“If the compliance rate for HMO licensing schemes is only 25%, how can these schemes be effective?

“Isn’t it time we went back to the drawing board to come up with a simple, streamlined system that works for all?”


Source: Property Industry Eye

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Agent is fined £80,000 over HMO failures discovered after blaze in attic

A letting agent has been fined £80,000 for HMO failures after a fire at one of the properties.

Orange Living, trading as Loc8me, had failed to license four HMOs, an investigation by council officials in Leicestershire revealed.

The investigation by Charnwood Borough Council was triggered by a fire in the attic of one of the homes managed by Loc8me in Loughborough.

All four properties were shared and had three storeys.

At Leicester Magistrates Court, the firm admitted four offences and was fined £20,000 for each. It was also ordered to pay costs of £3,690.

The attic blaze was attended by firefighters who found that the smoke detector had batteries missing, and that there were insufficient fire doors.

One of the occupants said they had emailed Loc8me’s maintenance team twice before the fire with concerns, but no one came.

There were no phone numbers for Loc8me displayed in the property, with tenants having to rely on email or a WhatsApp group.

Applications for HMO licences had been received by the local council, but had information missing, and so the properties went unlicensed.

Raffaele Russo, one of the directors of Orange Living Ltd, was interviewed by council officers and he confirmed that none of the four properties had a licence.

He stated that the lack of HMO licensing was a clerical error.

Russo said the fire alarms had been tested on a number of occasions.

With regard to failure to provide name, address and telephone number in a prominent position in the HMO, Russo did not know whether emergency contact details were displayed in the property. He said that tenants used a WhatsApp group.

During the court hearing, Russo accepted that there should have been mains-connected smoke alarms on an interconnected circuit and fire doors where needed.

After the hearing, Cllr Margaret Smidowicz, the council’s lead member for licensing, said it was a significant sentence and that she was pleased the courts had taken the matter seriously.

She said: “Licensing is there to ensure living and safety standards are met, and we will not hesitate to take action and use the full force of the law to make sure those standards are being met.”


Source: Property Industry Eye

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Landlord of dangerous HMO where foreign tenants spoke little English hit with huge fine

A landlord has been found guilty and fined £40,000 for letting out a dangerous and unlicensed House in Multiple Occupation.

It is the second largest fine levied against a landlord obtained by City of Lincoln Council.

Julie Churchill’s property was deemed dangerous by the magistrates for failing to comply with a number of safety breaches under the Housing Act 2004.

It had no fire doors to the bedrooms, ground floor lounge or kitchen, no working fire alarms on the ground floor, and one of the bedroom doors had a large gap to the top which would allow smoke to pass in the event of a fire.

Three of the bedroom doors could be locked by a padlock which if in use would not allow for a quick exit.

The court heard that if a fire had erupted in this building, these inadequate fire warning systems and lack of fire containment measures would have put the tenants at extreme risk.

The stairs were painted gloss black and had no slip resistance in the event of a tenant falling, and the kitchen did not have adequatefacilities for the seven tenants living in the property. One of the occupied bedrooms was below the legal minimum size for an adult.

It was heard in court that the repair of these defects would have cost Churchill as little as £6,000.

When the four-bedroom property was inspected by police and housing officers under a magistrates’ court warrant in January, the occupants were found to be seven unrelated eastern European and sub-Saharan immigrants in four bedrooms.

The tenants spoke little English and were unaware of their rights, receiving no tenancy agreement, rent book or rent receipt during their tenancy. Only two of the seven tenants knew what the landlord’s name was.

It was discovered that Churchill was taking up to £1,480 per month in rent, which at that rate would give her an income of approximately £35,520 over the two years she had owned the property.

Cllr Donald Nannestad, portfolio holder for quality housing at City of Lincoln Council, said: “We’re extremely pleased to bring another case to justice as part of our ongoing battle to crack down on rogue landlords.”


Source: Property Industry Eye

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Thousands of HMO landlords still operate without licences and provide poor living conditions

Many UK renters are living in Houses in Multiple Occupation (HMO), which, under current regulations, are properties rented out to three or more people forming at least two separate households, where tenants share basic amenities such as a kitchen or a bathroom. Any HMO that houses more than five people forming two or more separate households requires the landlord to apply for a licence to the local council, at an average cost of £600.

Students and the increasing number of people sharing flats with friends will be familiar with the common problems associated with living in an HMO. Most commonly, HMO landlords can be slow to make repairs, and the overall quality of the housing is more likely to be substandard.

Under current regulations, HMO landlords have to provide adequate fire escapes, gas and electrical safety, and minimum bedroom sizes; however, when it comes to the actual quality of the housing, there are no standards that can be enforced. In the worst cases, large-scale HMO housing has been found to contain damp and mould, kitchens in a state of disrepair, and vermin. These problems especially affect HMOs that have been converted from guest houses, as a 2015 BBC exposé demonstrated.

Moreover, thousands of landlords across the country are still avoiding licensing, putting their tenants at risk. In a landmark court case earlier this year, five Leeds flatmates took their landlord to court for failing to comply with licensing regulations, winning back all of their rent.

It may be that a more transparent and uniform landlord licensing scheme in which the money is reinvested into property maintenance could improve tenants’ living conditions – and increase landlord compliance.

‘Effective enforcement of rental sector standards is one of the biggest problems facing the lettings industry,’ says Neil Cobbold, chief operating officer of automated rental payment company PayProp.

‘Landlords might be happier to pay for these licences if they know the money is going to be used to raise PRS standards and identify rogue operators. Licensing schemes are sometimes criticised for being “revenue raisers” for local councils,’ adds Cobbold.

‘However, if authorities are more open about where the money is going and more focused on reinvesting it into housing, licensing schemes could be more effective with higher rates of compliance.’

Source: Real Homes

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Local authorities still unsure how many HMOs should be licensed under new rules

New analysis claims to highlight how unprepared local councils are for the extra regulations on HMO licensing.

A freedom of information request by Simple Landlords Insurance to 90 local authorities found that 65 (72%) had no idea how many unlicensed HMOs there may be in their area, while 29 (32%) had no idea how many properties should come in under the new regulatory scheme.

Since October 1, the old HMO rules changed, and now apply to properties of any height where there are five or more sharers in two or more households.

Previously, only properties of three storeys or more were covered.

The research also found 31 (34%) councils out of the 90 had not prosecuted any landlords for infractions of existing rules in the past two years.

There were only 103 HMO licences rejected at application over the past 12 months, with a total of 18,881 licenses granted.

It echoes similar data from property investment firm Touchstone that found only a minority of local councils had an idea of how many properties would need to be licensed under the new rules.

Housing minister Heather Wheeler said at the time of the changes in October that the new rules would increase the number of mandatory HMO licensed properties in England from 60,000 to an estimated 220,000 properties.

However, Richard Truman, head of operations at Simple Landlords Insurance, said this research shows local authorities are hamstrung in their efforts to apply the new legislation, due to a combination of poor intelligence about housing stock and stretched resources.

He said: “Earlier this year, we found that 85% of landlords we spoke to weren’t aware of the looming HMO regulations. A month on from their implementation, we wanted to find out exactly what those landlords are facing on the ground.

“The changes may be well-meaning, but a failure to support local authorities to communicate about them and enforce them is bad news – for good landlords and for tenants.”

Source: Property Industry Eye