HMO – Camden Council sending letters to the mortgage provider?

Hi Robert,

You could ask for a copy of the Council's GDPR privacy policy and ask where you gave them permission to write to your lender.

From recollection, Councils consider themselves bound by the legislation to inform "interested persons" of their intention to grant an HMO licence and so it is certainly normal in Cambridge where I have 2 HMOs, for the council to write to the lenders. However, I have the old-style big HMOs, so are already on specialist HMO mortgages.

I agree that with licensing now being extended to a much wider group of HMOs, this must cause problems. This really is something that the Council for Mortgage Lenders should be advising its members about and if you are with the RLA or NLA, you should advise them to talk to the lenders to help resolve this confusion. The basic definition of an HMO is any property with shared facilities with more than 2 households, so a three bedroom flat with 3 sharers is (and always was) an HMO but whereas before it did not usually need licensing, it is now increasingly common for licensing to be needed and so gets on the lender's radar screen.

If your mortgage T's and C's don't exclude sharers, then you should be ok - though often they will require all tenants to be on one tenancy contract.

I can imagine all sorts of hassle here explaining that your property hasn't changed at all - just the law on licensing. Sadly this is a sign of the times... who would be a landlord in 2018?

That was exactly my point too, the Council had no right to contact your mortgage company what so ever, they have clearly breached the data protection rule, string them!

Hackney have just had to delay their scheme which was due to come into force on the 2nd of December until February. Poor communication and confusion (quelle surprise) as to what constitutes a HMO. Also mandatory licensing of certain areas of the borough and not all. I really hope I get a visit as I will be dragging them off to my neighbours house. They have been living with cardboard taped over broken windows for the previous 2 winters. Their landlord is ........Hackney Council.

When I apply for my HMO license I have to ensure I have informed all 'interested parties' and I imagine a mortgage provider would be one of them. So if you did not inform them, then I am sure the council have the right to do so.

Have a look at The Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006 which is available at:

http://www.legislation.gov.uk/uksi/2006/373/pdfs/uksi_20060373_en.pdf

Without pasting the whole of it in, the relevant parts are below:

Paragraph 5. The HMO licence applicant must give the following information about the application to every relevant person...

Paragraph 6 - Nothing in paragraph (5) precludes an applicant from supplying a copy of the application, or other information about the application, to a relevant person.

Paragraph 9 - For the purposes of this regulation a “relevant person” is any person is
(a) who, to the knowledge of the applicant, is—
(i) a person having an estate or interest in the HMO or house that is the subject the application

All Local Authorities have to contact mortgage providers as "relevant persons" in terms of HMO licence applications. Not only that, as the applicant you are obliged to notify your mortgage provider when making an application.

I am in the fortunate position of having all my s/c flats mortgage free, so even though they are classified as HMOs, I shall not be faced with the problems others are experiencing. The LA in which all my properties are located has not so far proposed to licence accommodation of this type, though for how long if JC&co. get into power will that last? We LLs are already registered with Rentsmart Wales, along with all our properties.

Robert,
The issue is the heavy handed approach by the mortgagee. Did you complain? What actual response did you get? An apology?
I have frequently come across cases (when remortgaging a property) that the lender does not have an understanding of their own policy. In one case I declared all (including that it was an HMO) on the application but the valuer, appointed by the lender, said: excellent property but you have a problem - it's an HMO and they don't lend on HMOs. I laughed and said read the website. But the valuer put in his report and sure enough a few days later the lender pulled the plug. However I then complained and quoted their own website and stated that if they did not re-instate the offer I would complain to the Ombudsman. They backed down.

Having applied for my HMO licence I was informed that the 'primary fire exit' from one of the rooms was non compliant so on 30.10.2018 I emailed the LHA asking what measures I needed to take in order to be compliant.
After getting no reply from them I instead received out of the blue a prohibition order for that room - bad enough and I was mortified by this as I had been awaiting guidance from them, but I have now received a letter from my lender asking what I am going to do to rectify the matter, asking for 3 months bank statements and the ASTs.
I am a good landlord, totally conscientious and pro-active in all matters and I am absolutely gutted at all this - my first reaction is that I'm not even sure I want to be a landlord any more.

I know nothing of HMO's and not had time to come on here for a bit.

But your statement is shocking and is similar to what we are experiencing with Nottingham Selective Licensing.

The Council as same in your case are creating PROBLEMS WHERE THERE WASN'T A PROBLEM BEFORE! And the end loser is the tenants.

What they are doing to the good Landlords and good tenants is disgraceful.