Only 3 for an HMO beware the sting in the tail?

It was a HMO by virtue of the Housing Act 2004 legislation, (section 254), not by any change by a local authority.

A HMO property with 5 or more occupants requires a mandatory licence to be issued by the local authority.

There may be other criteria where a licence is required, e.g. selective licencing or additional licencing and the areas affected by this are set by the local authority.

When the first of the three occupants moved out, then the property was no longer a HMO. Did they all move out on the same date?

You should seek professional help with this, perhaps from Phil or Des at Landlord Licencing & Defence, (or another specialist organisation).

Three unrelated people would be an HMO but most local authorities would not require it to have a licence. On what basis is the former tenant claiming it was illegal ?

I have always had these intriguing thoughts:

- what if three unrelated friends rent under an AST? Does that make the property a HMO?

- what if a house owner, decides to have two unrelated lodgers? Does that make the property a HMO?

- what if a tenant, decides to sublet rooms to two lodgers? Does that make the property a HMO?

I don't operate in the HMO territory and I have no intend to. But I am curious to find out what happens in the above scenarios!

Reply to the comment left by Mervin SX at 10/12/2022 - 15:01
AST with 3 unrelated persons = HMO which may or may not be licensable depending on the whims of the local council

Person with 2 lodgers, I don't think so but am not an expert.

- what if a tenant, decides to sublet rooms to two lodgers? Does that make the property a HMO?

The similar question I would ask:

Suppose a landlord let a 2 bed property to two unrelated tenants in an area with additional licensing (3 or more unrelated tenants). Those tenants then decided to reduce their bills by letting out the living room to a 3rd person without the landlord knowing. OR one person on the tenancy moved in their boyfriend/girlfriend to their bedroom without their landlord knowing.

Would this then incur the wrath of the council on the landlord and would not knowing be a defence?

Reply to the comment left by Dylan Morris at 09/12/2022 - 15:27
The tenants were on a rolling AST and when Lambeth decided to apply the regulation that only 3 not 5 now was the qualification as an HMO. It stated on the Lambeth website that it was for new tenancies BUT we understand that he is claiming that for the last few months of their occupancy it was an unlicensed HMO and as such should get all the rent for those months refunded!
Our concern is that tribunals don't like Landlords and will grant their application!

Reply to the comment left by Robert M at 09/12/2022 - 12:17
Robert thank you. We are aware that under the new legislation that was passed in August 2021 and adopted by Lambeth BC in December 2021 meant that any 3 unrelated persons sharing the property it would constitute an HMO.
Our understanding at the time was that this was for new tenancies not existing. We knew that a lot of money would have needed to be spent to meet HMO criteria and with the 3 Gents verbally saying they would be leaving in the early part of 2022 (notice given Feb 2022) we decided to get related people for future occupancy.
This claim, if upheld, meant that we should evict one of the three or all three and accept two back in on a new AST!!!
As we were aware they were about to give notice to leave we allowed their tenancy to run out and since we have let it to a family so that HMO problem does not apply.

3 unrelated people have been an HMO since 2004 as stated above. The change is that it is licensable. Suggest you contact the council for clarification and pre-empt the claim.

Reply to the comment left by Puzzler at 10/12/2022 - 21:04
It was 5 people before the 2021 changed it to 3.

In my view, it may have been better if you had contacted the Lambeth licensing team at some point during those first few months of the licensing to explain your position and you could then have followed their instructions to ensure you were covered. We submitted our application in January 2022 (and paid), and heard nothing from them. I emailed the Lambeth licensing team in late November who confirmed
"This email is sent to confirm that a valid pending HMO licence application protects persons in control from any Council/tenant enforcement/sanction action around operating an unlicensed HMO.
Further, Landlords/Agents are allowed to start/adjust assured shorthold tenancies during this period as long as the occupancy does not exceed Lambeth’s HMO standards".
However, in your situation, you could try contacting the HMO licensing team to explain that during those early months you were investigating renting to a family in future and that as the multi-occupancy tenancy was ending fairly soon after the start of the licensing scheme, it seemed pointless to apply, only to withdraw it a few months later. You no doubt still have correspondence from that time, with the tenants; did their notice to leave confirm their vacating date? Did they all leave the same time as if 1 left, then you would no longer have been operating a 3-person HMO?

Can we be absolutely clear of the law.

It is national law and nothing to do with any council.

Since the Housing Act 2004 three persons from two or more households in a rented property has constituted an HMO and is now subject to the Management of Houses in Multiple Occupation Regulations (England) 2006 with massive punitive fines for failure to comply.

Licensing is a completely different matter

Confused? Contact the specialists for the correct advice

Landlord Licensing & Defence