18:10 PM, 21st January 2012, About 13 years ago 50
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Norwich City Council are now charging £1,800 for an HMO licence, a 650% increase! Extortionate I think but so far as I knew, it didn’t affect me as none of my properties are licenceable HMO’s, until…
Before I go on with my story, just in case you don’t know what an HMO is it’s a property with three or more stories let to 5 or more tenants, and HMO stands for House in Multiple occupation.
This week my brother and I have spent hours sorting out a problem we didn’t know we had.
I have one of those super trendy 4 bed properties at Riverside, Norwich, where many of the local Premiership footballers are also owners. I’ve owned it from new and my tenants have been there for nearly seven years. It is a four bed three story town house but as I only had four tenants in it I didn’t need an HMO licence.
Unbeknown to me until this week though, two tenants moved out in April last year and an unmarried couple moved into one room and another single chap into the other. They sorted it all between themselves and didn’t see the need to tell us at the time. Therefore, there are now 5 people living in the property.
The original tenancy was pre-deposit protection rules and they had sorted the deposit between them so that’s one less worry to deal with but as you can see I now have a problem, and to make it worse Norwich City Council are aware of it too.
The only reason I found out about this is because one of the occupiers of my property (not one of the people I thought was living there) recently lost his job and has claimed benefits. The Council have asked him for a copy of his tenancy agreement and of course he doesn’t have one. In fairness to my tenants, bless em, were not aware they had done anything wrong. I can easily see how any tenant could inadvertently create this problem, foreign or not. Tenancy law and HMO rules are not something the average person has any awareness of are they?
WHAT A MESS!
If I allow them to stay I need to create a new tenancy, protect the deposit and get an HMO licence as it would become a licenceable HMO. The scary thing about that isn’t just the cost though. I wouldn’t put it past Norwich City Council to bring in Article 4 HMO planning. If that was the case I might not be able to convert the property back into a family home and its value could plummet as as result. That’s another story though!
What choice did I have other than to serve a section 8 notice to give the tenants two weeks to vacate the property on the grounds of breach of tenancy? Well between my brother and I, we’ve been in email communication with them and with Andy Fretwell from the Eastern Landlords Association all week. Andy has been brilliant by the way, if you live in East Anglia I strongly recommend you to become an ELA member.
The email communications started to get unpleasant so we decided that a face to face meeting was the way forward. They all wanted to stay. They have been model tenants in terms of paying the rent, looking after the property, reporting minor issues before they become big problems etc. and the last thing I really wanted to do was to go to war with them in Court to get them out on the grounds of section 8 and breach of tenancy.
Fortunately, there is a happy ending to the story. It’s amazing what can be achieved over a cup of tea around a kitchen table isn’t it?
Once I had met with them and got them to understand that it’s the law that’s an ass, not me, we began to have a civilised and sensible conversation. The outcome is that one of the tenants has agreed to move on so that the others can stay and we will sort a new AST and protect the deposit for the remaining four so it will not become a licenceable HMO.
Will the 5th actually go though I wonder or will he become a “permanent guest” of the remaining four and register elsewhere on the voters roll? Only time will tell I guess but as far as I’m concerned, I think, or at least hope, I’ve done my bit to protect my position.
PHEW !!!
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Property Due Diligence - Get your ducks in a row
Ben Reeve-Lewis
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Sign Up15:54 PM, 28th January 2012, About 13 years ago
I look forward to that too Mark, especially as I have never heard of a 'Premium tenancy' haha. Have I missed something there or were you hitting the Mescal beer in Mexico?
Mary Latham
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Sign Up16:16 PM, 28th January 2012, About 13 years ago
Tut I meant section 21 Ben - multi tasking doesnt always work even for a woman
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Sign Up17:48 PM, 28th January 2012, About 13 years ago
You just made me LOL; very funny, tears to eyes job!.
I have to say the last comment is so true.
Life could be made a lot easier for everybody if your strategy was followed.
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Sign Up23:19 PM, 28th January 2012, About 13 years ago
Hi Mark,
It sounds as though this is a house in multiple occupation, with tenants sharing at least some facilities. The LA in which I operate classes a house which has been converted into self contained flats as an HMO, though as yet have not demanded they be licensed.
Mark Alexander - Founder of Property118
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Sign Up23:44 PM, 28th January 2012, About 13 years ago
There is no doubt that it is a HMO John, fortunately though it is in Norwich and not Oxford so with 4 tenants now it is not licensable and I'm not obliged to pay theextortionate HMO licence fee which Norwich City Council have recently increased to £1,800
Mary Latham
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Sign Up11:23 AM, 29th January 2012, About 13 years ago
Many local authorities offer discounts on their licence fees to recognise good practice. In my area these are typically 10% for being accredited through an eduction based scheme, 10% for being a member of a recognised landlords association or similar professional organisation. 10% for multiple applications. 10% for early applications.
These authorities also load the fee if a landlord avoids licensing and they have to chase him/her
If your local authority are not recognising good practice they need to be asked why
mike wilson
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Sign Up11:50 AM, 29th January 2012, About 13 years ago
An interesting set of comments which I would break into 2 threads: 1. On HMOs and 2. LA incompetence (and lack of knowledge)
In respect of HMOs Scottish law is somewhat ahead of England & Wales. But the principle is an HMO has to be registered. And an HMO is 3 unrelated people. An unmarried couple living together is one person.
But I'm surprised that nobody picked up on the licence cost. £1800!!!
When the HMO legislation was brought into law there was a clearly stated intention that is was not to discourage people. The costs should be minimised and income should ONLY be used for HMO expenditure.
One council in Scotland, broke that rule and was the subject of complaints to the Auditors etc. They accually deliberately used the fees for generating additional income for other purposes. It has now reduced its fees by over 50%. From £1200 to £550. Although they are refusing to give refunds for the 2 years of excessive fees.
On Council incompentence:
The public do not know the rules of the game. I always ask for something in writing. Preferrably by email as it saves my postage costs. Failure to respond immediately (within 2-3 weeks) makes me raise a complaint. It is difficult for someone to change what they said even if wrong because then they can be accused of making a mistake and of course open up the liability of that mistake.
All councils must have a complaints proceedure. COMPLAIN. In scotland there are 3 levels that one has to go through with the Council (the last with the CEO), before you go to the ombudsman. The ombudsman has the ability to issue a compensatory decision.
The above works wonders.
Ben Reeve-Lewis
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Sign Up17:16 PM, 29th January 2012, About 13 years ago
Mike I too was shocked by Mark’s £1,800 figure – that’s crazy. If ever there was a time when a councils need landlords it is post SAR age limit increase to 35 and to try and whack that sort of money beggars belief in my opinion.
Interpretations of HMO regs shouldn’t be like this. I know of no other area of landlord/tenant law where this happens, perhaps with the exception of the disintegration of deposit legislation that fell apart dramatically for everybody because it was evidently drafted in a rush by a legal team under too much pressure to keep their central government masters happy, as will definitely be the case with the Localism Act. Case laws will often throw up anomalies of opinion when the complexities of people’s lives rub up against statutes but interpretations of basic statutory criteria should be easy to determine.
I can say that working in a council you can feel the shifts, the sea changes as various senior managers tune in to various trends out there and if Oxford announces this scheme you can bet your life there will be other councils looking to jockey for position and get the brownie points. This has nothing to do with the practicalities of achieving said goal. That isn’t the issue, “Being seen to” tackle the issue is where the local authority political capital can be gained.
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Sign Up22:55 PM, 29th January 2012, About 13 years ago
Hi Everyone. Great thread. Both funny and a little sad! Ben's article summed it up a few months ago - the more you dig, the more confusing it gets. I tend to always install fire doors, mains alarms, fire blanket and a few extinguishers as a minimum whether I need to or not. I was in a 4th floor fire a number of years ago and realise how quickly fire/smoke can disorient you, even in a home you know well. Scary.
You can buy some very nice quality fire doors these days and fit sprung hinges, doing away with the need for unsightly overhead closers or perko's.
I'm busy lovingly converting a large Victorian 3 floor into a 6 bed/6 en-suite fully licensed HMO. The property will have 2 bedrooms on each floor. One of the 1st and 2nd floor bedrooms will also have their own kitchen facilities. How will this fit in with the rules. I have my first visit from the local HMO officer tomorrow and will be quoting sections of this thread at every oppertunity!
Mark Alexander - Founder of Property118
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Sign Up23:01 PM, 29th January 2012, About 13 years ago
Hi Francis
If you would like to write a short series of articles about your latest HMO development and include before, during and after pictures I would be delighted to publish them here for you. My personal email is mark@property118.com and my office phone number is 01603 489118.
Good luck with your meeting
Regards
Mark