HMO dilemma?

1. At the baseline remember....whoever becomes the licence holder YOU will always be liable.
2. Never trust a Council. Unless you get something IN WRITING then treat everything they say as a lie.
3. Rent to Rent providers - check them out fully. They are the middle men who take the money but no responsibility. Check with the Council first to see if they are on their 'preferred supplier' list or if they have any dealings with them.
4. Ask yourself why they approached you first!

I share the concerns noted above. Personally I would not under any circumstances entertain a Rent to Rent contract - ceding control but retaining liability for compliance with all the HMO regs doesn't work for me.
Do you have a timeline for your project to split the property into 2 smaller units?
If you elect to proceed with the R to R contract, likely you will have to enter into a 5 year minimum period and the lessee will probably have to do some works to get though licensing - so your project is going to be postponed for some time. Once the R to R contact finishes, getting vacant possession to do your own project could be a challenge in itself, especially once the S21 eviction provision disappears.

Reply to the comment left by DSR at 30/03/2023 - 11:42
I believe they are on the preferred list in a neighbouring borough.They have been introduced via an agent who has worked with them previously.
Will definitely seek some sort of clarification from the council in writing.

Reply to the comment left by Freda Blogs at 30/03/2023 - 12:55
The timeline for the conversion will be approx 12 to 18 months , however long planning takes I guess.
I believe the council will give a temporary licence for a year which allows you to let pending full approval. The lessee is fully aware and willing to take the property on a 12 month contract.

Watch this guy he will explain all.

The big suggestion I think is absolutely using a Commercial Contract and not an AST

https://youtu.be/CKIQCkkb3ZQ

This is rent to rent.

Be careful and get proper legal and accountancy advice before committing yourself.

Reply to the comment left by Ahmed at 30/03/2023 - 13:14
remember even if on a preferred list with another council this may be of comfort in one way but as most councils are desperate you might want to ask the council how they check on these 'preferred suppliers'. How are they monitored etc.

Like I said your neck will be on the line regardless of who you use as a agent. Council wont care. Buck stops with you.

Reply to the comment left by Ahmed at 30/03/2023 - 13:14
forget any good reports from the agent who has worked with them previously. The agent was being paid by them no doubt.

All councils have an HMO register. If the PF is the one that is holding the licences, you can check exactly what other properties (and addresses) they are listed as looking after. If local to you, drive round and have a look - property being looked after? What type of tenants are they housing? exempt accommodation? Asylum seekers?

If you use a R2R you may find they get tempted to take in asylum seekers. How will you know?...are you insured????

7+ people means it's sui generis and needs planning consent for change of use to c4 class. You should firstly check there isnt an article 4 resttiction in the area. Also be aware that once its been changed, the Council can decline to change it back to c3 if there is a high demand for HMOs and you might then find it difficult to sell and impossible to convert.

I would avoid any rent to rent arrangement like the plague.

Is there a recent Supreme Court decision as to who is responsible/liable?
Is my memory playing tricks on me again?
Nowadays, I try to remember on a needs to know basis only.
Am not interested in R to R hence limited memory.