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View Full Version : Property is an unlicensed HMO- what effect on tenancy?



jeffrey
06-03-2008, 21:48 PM
Want another s.21 problem with which to grapple?
See s.75(1) of Housing Act 2004. "No section 21 Notice may be given in relation to [an AST] of a part of an unlicensed HMO so long as it remains such an HMO."
At least the provision is clear. Just as where a deposit should be protected but remains unprotected, when no s.21 Notice can be served, the same is true where a property should be licensed as an HMO but remains unlicensed.

vantagex
03-07-2008, 11:07 AM
i have just come upon this while filling out the court papers.But tell me what is part1 and part3? I think i have a hmo but not which requires a licence.(council could,nt tell me a year ago)It has 3 story.all self contained,4 flats but converted some time ago, so would not meet current regs...so a hmo yes?...but requires a licence? just 4 tenants. one of the flats does not even share a door into the house.

red40
04-07-2008, 22:01 PM
i have just come upon this while filling out the court papers.But tell me what is part1 and part3?

Part 1 and part 3 of what?

Part 1 of the Housing Act is Housing Conditions, i.e Housing Health and Safety Rating System and Part 3 is Selective licensing of other residential accommodation, if that helps any?


I think i have a hmo but not which requires a licence.(council could,nt tell me a year ago)It has 3 story.all self contained,4 flats but converted some time ago, so would not meet current regs...so a hmo yes?

Looks like a definate HMO to me


...but requires a licence? just 4 tenants.

Not unless your council are operating additional licensing or selective, but you would need to speak to your council.


one of the flats does not even share a door into the house.

No relevance really as it appears to be a converted building to which section 257 applies of the above Act.

The only real issue with this is it will cost a little more in fire protection. By that I mean the flat with its own front door wont be connected to the communal stairway and therefore cannot have an interlinked smoke detection system installed in that particular flat as per the Institute of Electrical Engineers.

What usually happens is you may be asked to provide suitable 60 minute fire protection between any areas of that flat (seperate entrance) that are connected with any other flats, be it the ceiling, wall or floor, etc.

SAWNOAK
05-07-2008, 21:59 PM
the flat with its own front door wont be connected to the communal stairway and therefore cannot have an interlinked smoke detection system installed in that particular flat as per the Institute of Electrical Engineers.



I’ve been trying to find out about the above. This is a regulation that I haven’t heard of before, an important one, would you have an Internet link by any chance?

red40
06-07-2008, 05:45 AM
No sorry, you should ring the IEE or any of the electrician registration schemes, NAPIT, BRE, NICEIC, etc, etc, for advice, or have a good bedtime read of BS5839, BS7176, etc, etc, guaranteed to send you to sleep.

Having said that, you could also use the, say, Aico RF smoke detection system, these can be interlinked as they use radio frequency and are only connected to each (as required) light fitting pendant in the dwelling. If these are used the fire resistant integrity of the structure could go back to 30minute. Also with these types of systems each unit of accommodation can be house coded, to minimise the common problem of false alarms.

red40
09-07-2008, 17:49 PM
Even though the HA 2004 definition of HMO includes flats in converted building (where not complying with 199x building regulations (think it is 1993) and more than 1/3rd being privately rented), our local council pointedly does not follow this.

I had a look wickerman but cant see were they say that, any chance of pointing us in the right direction or a link.

vantagex
16-07-2008, 10:03 AM
looks like the fire system may need upgrading...i,ve found these which i am going to run past the fire risk assessor http://www.safelincs.co.uk/section.php?xSec=15?referrer=googleradiointer&engine=adwords!5122&keyword=%28interlinked+smoke+detectors%29&match_type=&gclid=COic8baSxJQCFQyI1QodQ2FOFw

NAK
16-01-2009, 22:02 PM
Hi
I am looking at buying an unlicensed HMO that is a death trap in waiting and requires major renovation to bring it up to standard. The tenants are on AST's and would need to be evicted to allow the refurbishment to happen. The catch 22 problem is that the legislation, as I understand it, does not allow a section 21 notice to be issued to tenants where the HMO is unlicensed so the works cannot be done to get the property licensed - any suggestions? Thanks in advance

mind the gap
16-01-2009, 22:25 PM
Hi
I am looking at buying an unlicensed HMO that is a death trap in waiting and requires major renovation to bring it up to standard. The tenants are on AST's and would need to be evicted to allow the refurbishment to happen. The catch 22 problem is that the legislation, as I understand it, does not allow a section 21 notice to be issued to tenants where the HMO is unlicensed so the works cannot be done to get the property licensed - any suggestions? Thanks in advance

Are you sure about this?

It is true that you cannot issue a s21 when the tenants' deposit is unprotected - but what legislation are you referring to?

If the property is a death trap as you say, the EHO can order LL to effect repairs, quite apart from the requirements of the HMO licence, and if those repairs/upgrading renders the house uninhabitable in the process, the tenants obviously cannot remain in it.

If it is the case that you cannot issue a section 21 (although I'd be very surprised), you could offer the tenants a financial incentive to move out; possibly offer them first refusal on the property when it is refurbished; help them find alternative acccomodation.

How long will the refurb take?

NAK
16-01-2009, 23:05 PM
Are you sure about this?

It is true that you cannot issue a s21 when the tenants' deposit is unprotected - but what legislation are you referring to?

If the property is a death trap as you say, the EHO can order LL to effect repairs, quite apart from the requirements of the HMO licence, and if those repairs/upgrading renders the house uninhabitable in the process, the tenants obviously cannot remain in it.

If it is the case that you cannot issue a section 21 (although I'd be very surprised), you could offer the tenants a financial incentive to move out; possibly offer them first refusal on the property when it is refurbished; help them find alternative acccomodation.

How long will the refurb take?

It seems to be pretty definate that s21 is out if unlicensed - the specific wording is "No section 21 notice may be given in relation to a shorthold tenancy of a part of an unlicensed HMO so long as it remains such an HMO. "

The property is large and the refurb would take about 1 year. I believe EHO are about to pounce on the current owner and they have apparently told the tenants that their tenancies are safe/uninterrupted. As I don't own the property yet I would like to know if there is another defined legal way (ie is the EHO simply incorrect!) to get the tenants out so the work can be done without having to rely on negotiating with tenants and EHO.

bunny
16-01-2009, 23:08 PM
I can relate to this. I took over an HMO from another agent for a friend and the HMO license had lapsed, there were no certs of any description on the property and everything had failed from emergency lights to fire alarms, I had no electrical certs, gas certs etc.

It was a nightmare!

I had drug addicts and alcoholics etc in the property and it was a **** hole beyond belief and I wanted to evict the tenants. Some had been served notice by the old agent on the instruction of the landlord with S21s but didn't leave. I went to apply for accelerated possesion to find I needed the HMO licence to find it had lapsed despite being told it was current. I couldn't then get the new licence because I had no certificate hence the nightmare began.

Now I am not sure if the HMO licence issue only applies to accelerated possession but you are correct that you can't go down that route without it. It stopped me in my tracks. It took a while to get the licence back. I still went on to serve S21 notices though and some tenants did leave under notice. (They were non the wiser - a landlord can serve an invalid notice if they want to)

For those who did not move out on the expiry of the S21 notice, and I knew they weren't going to, they were paid off to leave and they did leave. There was nothing illegal going on here or harassment. It was an offer/incentive which they took. They only got the cash if they agreed to my rules. One it only took £190. If I compare that to months of going through the proper chanels and court fees, I know which I would choose.

bunny
16-01-2009, 23:16 PM
There is a ground under S8 notice, ground 6 but I do not know how applicable it is in your case so sorry if it leads you up the garden path. Maybe others can qualify if this would be possible? I offer it as a lifeline only and something to explore as I have no experience of the practicalities of using it.

Ground 6
The landlord who is seeking possession or, if that landlord is a registered social landlord or charitable housing trust, a superior landlord intends to demolish or reconstruct the whole or a substantial part of the dwelling house or to carry out substantial works on the dwelling house or any part thereof or any building of which it forms part and the following conditions are fulfilled-

(a) the intended work cannot reasonably be carried out without the tenant giving up possession of the dwelling house because-

(i) the tenant is not willing to agree to such a variation of the terms of the tenancy as would give such access and other facilities as would permit the intended work to be carried out, or

(ii) the nature of the intended work is such that no such variation is practicable, or

(iii) the tenant is not willing to accept an assured tenancy of such part only of the dwelling house (in this sub paragraph referred to as "the reduced part") as would leave in the possession of his landlord so much of the dwelling house as would be reasonable to enable the intended work to be carried out and, where appropriate, as would give such access and other facilities over the reduced part as would permit the intended work to be carried out, or

(iv) the nature of the intended work is such that such a tenancy is not practicable; and

(b) either the landlord seeking possession acquired his interest in the dwelling house before the grant of the tenancy or that interest was in existence at the time of that grant and neither that landlord (or, in the case of joint landlords, any of them) nor any other person who, alone or jointly with others, has acquired that interest since that time acquired it for money or money's worth; and

(c) the assured tenancy on which the dwelling house is let did not come into being by virtue of any provision of Schedule 1 to the Rent Act 1977, as amended by Part I of Schedule 4 to this Act or, as the case may be, section 4 of the Rent (Agriculture) Act 1976, as amended by Part II of that Schedule.

For the purposes of this ground, if, immediately before the grant of the tenancy, the tenant to whom it was granted or, if it was granted to joint tenants, any of them was the tenant or one of the joint tenants of the dwelling-house concerned under an earlier assured tenancy or, as the case may be, under a tenancy to which Schedule 10 to the Local government and Housing Act 1989 applied, any reference in paragraph (b) above to the grant of the tenancy is a reference to the grant of that earlier assured tenancy or, as the case may be, to the grant of the tenancy to which the said Schedule 10 applied.

For the purposes of this ground "registered housing association" has the same meaning as in the Housing Associations Act 1985 (see section 5(4) and (5) of that Act) and "charitable housing trust" means a housing trust, within the meaning of the Housing Associations Act 1985, which is a charity, within the meaning of the Charities Act 1993.

mind the gap
16-01-2009, 23:34 PM
That's interesting. I'm staggered that you cannot use a s21 for an unlicensed HMO property - as you say, it's a real catch 22.

Are you sure you really want to buy this property?!

If so, I think you are going to have to factor in cost of buying them out - and you would have to make that a condition of the purchase (assuming that's legal!). If you didn't, you could be stuck with them for years by the sound of it.

What a nightmare.

Incidentally...it's difficult to know whether this ground would be applicable or not, when they construct sentences like this:

"For the purposes of this ground, if, immediately before the grant of the tenancy, the tenant to whom it was granted or, if it was granted to joint tenants, any of them was the tenant or one of the joint tenants of the dwelling-house concerned under an earlier assured tenancy or, as the case may be, under a tenancy to which Schedule 10 to the Local government and Housing Act 1989 applied, any reference in paragraph (b) above to the grant of the tenancy is a reference to the grant of that earlier assured tenancy or, as the case may be, to the grant of the tenancy to which the said Schedule 10 applied".

Clear as mud!

mind the gap
17-01-2009, 00:16 AM
Well, I guess it's no different to a landlord being unable to evict without protecting the deposit. If you are supposed legally to have a HMO licence then if you haven't it's a penalty for not doing as you should.

No, I don't think it's quite the same, because, if you cannot get a tenant out of a property which is unsafe (by HMO standards) - in other words, a property in which they could be trapped in a fire, electrocute themselves, die of carbon monoxide poisoning, etc., then you are relying on the tenant's own sense of self-preservation if they are to leave so that repairs may be done. (And they may not have much of this sense - they may not have much sense at all. The LL is supposed to exercise it on their behalf). The whole idea of HMO licensing is to protect tenants more effectively from risk to life and limb. So, effectively, the council is leaving the tenant at risk of something potentially much worse than being asked to leave at the end of an AST.

bunny
17-01-2009, 00:42 AM
Yes I see your point, I was looking at it more from the penalty to the landlord aspect than the tenant as the S21 route is for the landlord's benefit not the tenants.

I was and still am quite shocked at the council's lax attitude to the houses I now manage which were far far far from being legal HMOS and it was in their system that the HMO on one was lapsed for quite some time. They actually issued the new license though without the certificates required for licensing believe it or not. So, they do not know to this day that I have the certificates. So, are HMOs licenses worth the paper they are written on???

Of course, the authorities will throw the book at you if something seriously goes wrong but otherwise, well, I'm not convinced from my limited experience. The properties I am referring to were surely raising a red flag. I am sure those who enforce HMOs are under resourced so rogue landlords can and do slip through the net. Knowing you need a license makes many more landlords reach and maintain requirement levels than would have done so, so it does have its positives but it's a flawed system which I am sure has been debated many times on here.




No, I don't think it's quite the same, because, if you cannot get a tenant out of a property which is unsafe (by HMO standards) - in other words, a property in which they could be trapped in a fire, electrocute themselves, die of carbon monoxide poisoning, etc., then you are relying on the tenant's own sense of self-preservation if they are to leave so that repairs may be done. (And they may not have much of this sense - they may not have much sense at all. The LL is supposed to exercise it on their behalf). The whole idea of HMO licensing is to protect tenants more effectively from risk to life and limb. So, effectively, the council is leaving the tenant at risk of something potentially much worse than being asked to leave at the end of an AST.

red40
17-01-2009, 08:39 AM
Hi
HMO is unlicensed so the works cannot be done to get the property licensed - any suggestions? Thanks in advance

There are a number of points relating to this and although they are all hypothetical at the moment in your case NAK, there are options open to you if you did decide to buy the property.

First and foremost as the property is not licensed, and there is no chance it would be licensed. The council have a duty to take control of the property. They cant just take legal action against the landlord for operating an unlicensed HMO and leave it at that, they have a duty under the Housing Act 2004 to make a management order and take control.

So if you bought it, you can apply for a 3 month temporary exemption order, you can then issue a sec21 notice to recover possession. However it is upto the council to agree to issue this to you.

The other option is to licence the property and then recover possession and carry out the works. The works don't have to be done to have a licence. The works can be done as part of the licence condition, although any fire precaution works should really be carried out under HHSRS and not form part of the licence conditions.

Also councils can ask for certificates as part of the application process, but they cant refuse a licence if you refuse to give then to them. They can only be requested once a licence has been granted and therefore would be a licence condition. Although being a little petty, the council couldn't refuse to issue a licence if you refused to give them the certificates at the application stage. They could however request them within 7 days of writing under the management regulations.

So, are HMOs licenses worth the paper they are written on??? No not really, unless the council implementing the licensing are suitably organised and have the manpower to monitor and implement the Housing Act 2004 to the letter, which is never going to happen. The good to average landlordswill licence, but the bad landlords will try to avoid it and it is difficult to identify a possible licensable HMO from outside.

mind the gap
17-01-2009, 10:40 AM
There are a number of points relating to this and although they are all hypothetical at the moment in your case NAK, there are options open to you if you did decide to buy the property.

First and foremost as the property is not licensed, and there is no chance it would be licensed. The council have a duty to take control of the property. They cant just take legal action against the landlord for operating an unlicensed HMO and leave it at that, they have a duty under the Housing Act 2004 to make a management order and take control.

So if you bought it, you can apply for a 3 month temporary exemption order, you can then issue a sec21 notice to recover possession. However it is upto the council to agree to issue this to you.

The other option is to licence the property and then recover possession and carry out the works. The works don't have to be done to have a licence. The works can be done as part of the licence condition, although any fire precaution works should really be carried out under HHSRS and not form part of the licence conditions.

Also councils can ask for certificates as part of the application process, but they cant refuse a licence if you refuse to give then to them. They can only be requested once a licence has been granted and therefore would be a licence condition. Although being a little petty, the council couldn't refuse to issue a licence if you refused to give them the certificates at the application stage. They could however request them within 7 days of writing under the management regulations.

So, are HMOs licenses worth the paper they are written on??? No not really, unless the council implementing the licensing are suitably organised and have the manpower to monitor and implement the Housing Act 2004 to the letter, which is never going to happen. The good to average landlordswill licence, but the bad landlords will try to avoid it and it is difficult to identify a possible licensable HMO from outside.

Thanks red, - that makes complete sense. It's obviously the way forward for OP in this case i.e., assess the prop throughly (before completion of sale, if poss) and get an application in within days of completion. Then perhaps make gas, electrical and fire safety his priorities and if this involves re-housing tenants while work is done, then paying any extra cost (above normal rent) for alternative accommodation while re-wiring/piping or whatever happens? Could be a significant cost but would need to be factored into total cost of refurb - and tax deductible?

Then get the licence (with all its conditions attached), asap and issue s21.
I still think that unless tenants are willing to go, he's going have a hell of a job getting the work done with them there - they could still be in for months yet, if they chose to be awkward couldn't they? Though why anyone would want to live in a death trap is beyond me...

Might be cheaper to buy them off? How much is appropriate?

I've learnt a lot from this thread!

NAK
17-01-2009, 11:23 AM
Thank you all for your extremely useful input & comments - Red40 in particular as the options you outline seem very workable within the rules - assuming there is a collaborative approach taken by EH. Also using s8 grounds 6 may have some legs as you suggest Bunny.

In trying to get a property up to standard and safe for tenants to inhabit it seems crazy and against the "spirit" of the legislation that an attempt to protect tenants (by preventing a s21) would actually put them in danger!

Any further ideas are most welcome. Thanks again.

CONNYLOP
16-02-2009, 16:01 PM
Some weeks ago one of my flatmates realized that our landlord did not have a license for the property. He informed to the council and they posted a license package for him, and last week council's officers came to inspect the house.The officers confirm that the house must be licensed. Our enquire now is that even if the landlord doesnt have a license yet and the process would take some weeks and the landlord has been operating an unlicensed property , Do we still have to pay the rent? or Do we wait until the council makes its decision?

Thanks for your advice.

RomansProperties
16-02-2009, 16:48 PM
It sounds to me you are just looking for a reason to not pay the rent.
I would wait and see what the council say.
The issue is between them and the Landlord.
Any works which need doing to make it up to standard will be given to your landlord with a time scale to do them in

mind the gap
16-02-2009, 17:12 PM
It sounds to me you are just looking for a reason to not pay the rent.
I would wait and see what the council say.
The issue is between them and the Landlord.
Any works which need doing to make it up to standard will be given to your landlord with a time scale to do them in

I tend to agree, however, I seem to recall one group of tenants somewhere managing to 'persuade' the LL that since he should only have had four of them (not six) in his illegally unlicensed HMO, then he was wrong to charge the full whack of rent based on six people - and the Ts do actually have a bit of clout here, don't they? They could prosecute LL for not ensuring HMO regs were complied with - apart from anything else, their safety could have been severely compromised by absence of fire prevention measures.

Si if LL has any sense he will negotiate with them about a rent reduction for the time the prop was unfit as an HMO.

jeffrey
16-02-2009, 17:30 PM
Some weeks ago one of my flatmates realized that our landlord did not have a license for the property. He informed to the council and they posted a license package for him, and last week council's officers came to inspect the house.The officers confirm that the house must be licensed. Our enquire now is that even if the landlord doesnt have a license yet and the process would take some weeks and the landlord has been operating an unlicensed property , Do we still have to pay the rent? or Do we wait until the council makes its decision?

Thanks for your advice.
Yes, you have to pay the rent. The tenancy is still valid. L's only problems are:
a. facing prosecution; and
b. inability to serve any s.21 Notice unless and until the property is registered as an HMO.

CONNYLOP
16-02-2009, 19:48 PM
Thanks for the advice, is not that We are looking for a reason to do not pay the rent, just wanted to know if We must do it before to hear from the council. Now We know that We must still doing it.

Once again thanks.

casio87
12-09-2010, 10:41 AM
I've just found out that Im living in an unlicenced HMO. I have read on the internet that unlicenced HMO's are illegal and I can claim rent back. How do i do this?

Snorkerz
12-09-2010, 10:50 AM
I am not sure where you have read about claiming your rent back?

Can you tell us:

How many people live in your house
Are any of them related
Does the landlord live with you
How many floors are there

mind the gap
12-09-2010, 14:12 PM
I've just found out that Im living in an unlicenced HMO. I have read on the internet that unlicenced HMO's are illegal and I can claim rent back. How do i do this?

I believe it is indeed the case that if the LL should have applied for a HMO licence but has not done so, no rent is payable until the licence is in place. There is also a fine of up to £20k for non-registration and not obtaining the licence.

However,this only applies to licensable HMOs. When OP says he is living in 'an unlicensed HMO', it may be that it is unlicensed because a licence is not required for that type of property and/or letting.

If he answers your Qs, we can probably work it out.

Snorkerz
12-09-2010, 14:43 PM
no rent is payable until the licence is in place. Is this like a s48 where it becomes due once the license is obtained? I ask because I undertand it is fine to NOT have a license, so long as a license has been applied for (which can take months).

mind the gap
12-09-2010, 14:45 PM
Is this like a s48 where it becomes due once the license is obtained? I ask because I undertand it is fine to NOT have a license, so long as a license has been applied for (which can take months).

My instinct tells me not (possibly because the LL my have exposed the Ts to serious danger if the property has been below HMO standards in terms of fire safety, etc) , but I will try to check that.

Snorkerz
12-09-2010, 14:59 PM
OP - sorry to have gone off track slightly, I am not a HMO landlord whereas MTG is.

As soon as you answer my Qs above, we can give you more specific info.

mind the gap
12-09-2010, 15:04 PM
Snorkerz - I found this on a council HMO website about mandatory HMO licensing (which is a countrywide thing)

QAre there any penalties?
AIt is an offence if the landlord or person in control of the property:
fails to apply for a licence for a licensable property; or
allows a property to be occupied by more people than are permitted under the licence.
A fine of up to £20,000 may be imposed. In addition, breaking any of the licence conditions can result in fines of up to £5,000.
Rent repayment orders
A tenant living in a property that should have been licensed, but was not, can apply to the Residential Property Tribunal to claim back any rent they have paid during the unlicensed period (up to a limit of twelve months).Councils can also reclaim any housing benefit that has been paid during the time the property was without a licence.
More information can be found at Residential Property Tribunal Service website.

Snorkerz
12-09-2010, 15:06 PM
MTG, so would you agree that "license applied for" allows LL to charge rent?

jeffrey
12-09-2010, 15:20 PM
Even if L is letting an unlicensed HMO (and possibly committing a criminal offence), the Letting Agreement is valid.
L cannot use the s.21 procedure, however.

mind the gap
12-09-2010, 15:20 PM
MTG, so would you agree that "license applied for" allows LL to charge rent?

Yes. It can take councils ages (two and a half years, in my case) to get round to approving the application and supplying the rather fetching laminated certificate. Well worth the £1100 we paid to Newcastle City Council.:rolleyes: The LLs they are really after are the ones who avoid applying for one at all because they can't bear the loss of profit if they modernise/get the property up to standard/reduce the nmber of Ts from 12 to 6, or whatever. The assumption is however that the LL will be moving with all speed to get the property up to standard and if it is a death trap in the mean time, the Ts do of course have recourse to the EHO as any other T would.

If T thinks the LL should have an HMO licence but doesn't, they can ring the local council who will tell them whether one has been applied for or not. If it has, but Ts are concerned about non-urgent safety/security issues, they can report these and HMO team should follow it up with the LL.

I believe that some Ts in unlicensed but licensable HMOs have been able to break their contract early without penalty, but I cannot remember where I read that. So it seems that Ts have the right to live there (if they wish), but LL has no right to the rent or to issue a s21. Logically, a s8 should not work either, if the Ts are not liable for rent in the first place!

Moderator1
12-09-2010, 15:54 PM
Several largely similar questions on separate threads have been merged into this thread (hence the repetitive nature of answers).