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View Full Version : Can a single letting avoid need for HMO Licence?



vishy01234
20-03-2007, 17:21 PM
I have a beautiful 4 storey house - it has 4 double bedrooms, 2 receptions, and a self-contained apartment in the basmement.

When I bought the property, my original intention was to rent out the 4 main bedrooms, the rear reception as a bedroom, and the self-contained apartment in the basement (i.e. take in 6 tenants). I was not aware that this would have fallen under the criteria of a licensable HMO.

I have now had a think about other ways I could market the property as a luxury house share - if I took on just 4 tenants in the double bedrooms, and provided them with 2 receptions on the ground floor, a massive breakfast kitchen, and the full use of the downstairs apartment (which has its own bedroom, bathroom, kitchen and reception) am I right in thinking that I would NOT need to get a mandatory HMO license, and instead just implement standard HMO guidelines?

(P.S. Isn't it such a shame that I am being penalised because of those slum landlords out there!!)

jeffrey
20-03-2007, 17:41 PM
I have a beautiful 4 storey house - it has 4 double bedrooms, 2 receptions, and a self-contained apartment in the basmement.

When I bought the property, my original intention was to rent out the 4 main bedrooms, the rear reception as a bedroom, and the self-contained apartment in the basement (i.e. take in 6 tenants). I was not aware that this would have fallen under the criteria of a licensable HMO.

I have now had a think about other ways I could market the property as a luxury house share - if I took on just 4 tenants in the double bedrooms, and provided them with 2 receptions on the ground floor, a massive breakfast kitchen, and the full use of the downstairs apartment (which has its own bedroom, bathroom, kitchen and reception) am I right in thinking that I would NOT need to get a mandatory HMO license, and instead just implement standard HMO guidelines?

(P.S. Isn't it such a shame that I am being penalised because of those slum landlords out there!!)

Try to let whole house as one unit to one family. That way it would never be a HIMO, no matter how large the family: see s.254(2)(b) and s.258 of Housing Act 2004.
Alternatively, let whole house to two people only. Even if they form two households, that would not be a licensable HIMO: see para. 7 of Schedule 14 to Housing Act 2004.

Bel
20-03-2007, 17:41 PM
In my understanding

If the apartment is properly self contained; the tenants in the basement do not count towards the tenants in the rest of the building regarding licence, so you could have 2 in basement flat and 4 in "maisonette". still without need of licence.

Sounds like converted buiding into self-contained flats scenario

vishy01234
20-03-2007, 17:51 PM
In my understanding

If the apartment is properly self contained; the tenants in the basement do not count towards the tenants in the rest of the building regarding licence, so you could have 2 in basement flat and 4 in "maisonette". still without need of licence.

Sounds like converted buiding into self-contained flats scenario

I would not want to take in a family as the rent would not be enough ... if I offer the house as a luxury house share I would get far more rent.

The apartment is self-contained in that it has it's own exterior entrance, own boiler, own toilet, bathroom, etc, but it does share eletricity and gas meters with rest of house, and is accesible from a door in the house ...

In any case, I would want to opne the door within the house, to provide the basement as a living and relaxation area ... the major point is that I would reduce the number of the tenants in the house to 4 ... would that then mean that I would not need an HMO license?

jeffrey
21-03-2007, 12:27 PM
Why be afraid of licensing?

I know a landlord who got the council round to check on a HMO - lovely family home,3 stories, six students. They had the original bare wood victorian doors - with door closers!!! They anticipated that they would need closers and were hedging their bets. These doors were lovely doors but certainly not 30min fireproof!!!

The council said..... "they are OK, but you will need to fit intumescent strips".

You may well find the council more helpful in assisting you in meeting your legal obligations than you expect.

"Intumescent strips"? Is that some sort of rude nightclub act?

Bel
21-03-2007, 14:36 PM
Why be afraid of licensing?

I know a landlord who got the council round to check on a HMO - lovely family home,3 stories, six students. They had the original bare wood victorian doors - with door closers!!! They anticipated that they would need closers and were hedging their bets. These doors were lovely doors but certainly not 30min fireproof!!!

The council said..... "they are OK, but you will need to fit intumescent strips".

You may well find the council more helpful in assisting you in meeting your legal obligations than you expect.

In my understanding, Even if the HMO is not licensible; the fire regs still apply just the same; its just you dont need to do the extra licence application hassle. If a family rented than the fire regs would not apply.

So to answer your question; 4 tenants is an HMO that does not require a licence. You should still check with council; they may have a special licensing scheme ( not likely though).

vishy01234
21-03-2007, 16:29 PM
Why be afraid of licensing?

I know a landlord who got the council round to check on a HMO - lovely family home,3 stories, six students. They had the original bare wood victorian doors - with door closers!!! They anticipated that they would need closers and were hedging their bets. These doors were lovely doors but certainly not 30min fireproof!!!

The council said..... "they are OK, but you will need to fit intumescent strips".

You may well find the council more helpful in assisting you in meeting your legal obligations than you expect.

I am afraid of licensing because, from what I have read, once you start the process there is no going back. Bloody inspectors traipsing in and out of my beautiful house like they own it ... and I suspect it makes resale more difficult. All the red tape and the risk of being asked to make modifications running into the thousands - no thanks!!

red40
22-03-2007, 21:29 PM
I am afraid of licensing because, from what I have read, once you start the process there is no going back.

Yes well we have all read some rather unsubstantiated things and some of those have come from bodies who represent landlords and should have known better.

Surely its better to licence with the council as wickerman says and spent, what, at the most 10k to do improvements.

Don't licence and it will cost you say, 10k fine (could be up to the maximum £20k), council gets a rent repayment order which mean you have to pay back the rent paid, say 5 tenants @ £50 for 52 weeks (maximum) = £13,000, and thats before they start looking at management orders where they take the property off you, also enforcement action notices and charge you for that as well.

Think I would be minded to licence personally!

vishy01234
24-03-2007, 02:11 AM
Yes well we have all read some rather unsubstantiated things and some of those have come from bodies who represent landlords and should have known better.

Surely its better to licence with the council as wickerman says and spent, what, at the most 10k to do improvements.

Don't licence and it will cost you say, 10k fine (could be up to the maximum £20k), council gets a rent repayment order which mean you have to pay back the rent paid, say 5 tenants @ £50 for 52 weeks (maximum) = £13,000, and thats before they start looking at management orders where they take the property off you, also enforcement action notices and charge you for that as well.

Think I would be minded to licence personally!

That is such an OTT post and you are missing the point completely ... you are writing with the presumption that some of us are supporting the breaking of the law!

Most of us appreciate that renting your property out to 5+ people and not seeking a mandatory license is very foolish ... I am clearly not advocating that.

The point I am making is you have these bureaucrats that dream up new systems because of the scumbag landlords out there that cram x number of people into a room, and decent people always get stung. I am simply saying that once you start the HMO mandatory licensing process, it is clear you have a ridiculous set of costs to foot and you open yourself to the council having you on their regulations hit list. I know I am a very decent landlord and am offering an amazing house for tenants - I do not wish to go down this mandatory licensing route and would rather keep my tenants down to 4, even though my house could take far more people as it has 4 double bedrooms and a self-contained flat.

As far as I am concerned, these mandatory HMO licensing laws are too much and far too inflexible - you will find many decent landlords deciding that it is not worth the hassle, and either sell up or reduce the number of tenants they take in. Indeed, if certain councils decide to tighten up the manadatory licensing and introduce additional licensing (e.g. license required if you take in 3+ tenants in a 3+ storey house), I will fully support landlords that wish to tell their council to f off!

red40
24-03-2007, 09:50 AM
Regardless if it a licensable HMO or just a HMO by definition, then as Bel and wickerman have already pointed out your property would still be a HMO and still subject to the requirements of Part 1 (HHSRS) of the Housing Act and also the existing management regulations, soon to be amended. So your council still have the right to put you on their 'hit list' as does every other landlord.

What it comes down to it, its the economics of running such a property and is it worth loosing 12 months rent per tenant for the sake of a licensing and from the way you have described your property and the amenities available, I would say no it isn't. Your rooms seem to be bigger enough, the property is well maintained and presented. All you maybe looking at is a licence fee, fire precautions and the possibility of the wash hand basin rule.

Your fire precautions will still be required regardless, so you are literally down to a licence fee and the dubious wash hand basins. Do these two things out way what you would get in rent over a five year period for a licence?

vishy01234
24-03-2007, 12:59 PM
Regardless if it a licensable HMO or just a HMO by definition, then as Bel and wickerman have already pointed out your property would still be a HMO and still subject to the requirements of Part 1 (HHSRS) of the Housing Act and also the existing management regulations, soon to be amended. So your council still have the right to put you on their 'hit list' as does every other landlord.

What it comes down to it, its the economics of running such a property and is it worth loosing 12 months rent per tenant for the sake of a licensing and from the way you have described your property and the amenities available, I would say no it isn't. Your rooms seem to be bigger enough, the property is well maintained and presented. All you maybe looking at is a licence fee, fire precautions and the possibility of the wash hand basin rule.

Your fire precautions will still be required regardless, so you are literally down to a licence fee and the dubious wash hand basins. Do these two things out way what you would get in rent over a five year period for a licence?


I just don't think it's as simple as that ... requirements for a property that requires a mabdatory licese are tighter than for a standard HMO. They can ask you to install fire doors at the start of each hallway, etc ... I don't want to wreck the character of the property, and once you introduce these leeches (i.e. HMO licensing inspectors) into your house then you are in for trouble ... I sincerely believe this, and I am a decent law abiding citizen. WE are just swapping one problem for another (i.e slum landlords that go underground and masses of red tape for decent people to contend with) ... there has to be another way.

Oh, and of course once you become a licensed HMO it knocks the value of your property big time ...

Beeber
24-03-2007, 15:23 PM
HMO legislation in Scotland was introduced in reaction to deaths of tenants in properties by landlords who equated health and safety issues with expense

http://news.bbc.co.uk/1/low/scotland/1993190.stm

Landlords in Scotland have been prosecuted for breaching HMO regulations, including their tenants suffering from carbon monoxide poisoning.

http://news.scotsman.com/glasgow.cfm?id=1883872005

red40
24-03-2007, 15:33 PM
requirements for a property that requires a mabdatory licese are tighter than for a standard HMO.

Not really no, a standard HMO are usually self contained flats and pretty much the same fire precautions apply to a property that has no building control approval. Admittedly a smoke detection system can be a little larger in bedsit accommodation as usually it has to provide full coverage. Fire doors are applicable to any HMO


They can ask you to install fire doors at the start of each hallway, etc ...

When you say this I take it you mean the entrance door to each unit of accommodation, this applies to all HMO's, with or without building control approval.


I don't want to wreck the character of the property, and once you introduce these leeches (i.e. HMO licensing inspectors) into your house then you are in for trouble ... I sincerely believe this,

Again do you know this for a fact? Personally I have always found them to be very helpful and more than willingly to assist at every opportunity. The same goes for the fire authority, I take it you would class these as leeches as well then, as they now have duty to under the new Fire Safety Order to ensure a HMO landlord has adequate fire precautions.

It works both ways you know it does protect your property as well from extensive smoke and fire damage.


Oh, and of course once you become a licensed HMO it knocks the value of your property big time ...

For licensable HMO? that does surprise me. I know landlords that would snap it up if all the fire precautions where in and all the relevant amenities in place. All they would have to do is prove to the council that they are a fit and proper person.

vishy01234
24-03-2007, 15:54 PM
Not really no, a standard HMO are usually self contained flats and pretty much the same fire precautions apply to a property that has no building control approval. Admittedly a smoke detection system can be a little larger in bedsit accommodation as usually it has to provide full coverage. Fire doors are applicable to any HMO



When you say this I take it you mean the entrance door to each unit of accommodation, this applies to all HMO's, with or without building control approval.



Again do you know this for a fact? Personally I have always found them to be very helpful and more than willingly to assist at every opportunity. The same goes for the fire authority, I take it you would class these as leeches as well then, as they now have duty to under the new Fire Safety Order to ensure a HMO landlord has adequate fire precautions.

It works both ways you know it does protect your property as well from extensive smoke and fire damage.



For licensable HMO? that does surprise me. I know landlords that would snap it up if all the fire precautions where in and all the relevant amenities in place. All they would have to do is prove to the council that they are a fit and proper person.


I am enjoying this discussion with you and obviously you know a lot about the subject ... but you do seem very bias in favour of HMO licensing. My experience has been very negative so far .. i find it is a red tape nightmare, and I resent the scare tactics that are being used, and the lack of consistency from council to council. Very typical of this joke of a labour government - obsessed with stealth taxes and experts at pulling the rug from under the feet of joe public. I will NEVER vote for Labour again - they stand for only one thing - helping chavs that want to live off benefits, and the very rich - the decent working classes and middle classes are being slaughtered, and the slapdash nature of HMO licensing makes me spew. They should be targeting slum landlords and driving them out of the market - HMO licensing is not the solution ...

islandgirl
24-03-2007, 18:20 PM
back to the poll tax and crumbling schools for you then!

Grange
25-03-2007, 16:50 PM
I am in two minds as to whether HMO legislation achieves anything. It certainly has helped to drive slum landlords out of the market.

On the other hand, I do not see the benefit in this: Here in central London there is a large number of run-down but otherwise high-quality (Georgian/Victorian terraced) housing appearing on the market, as HMO owners leave the market.

Snapped up by other property investors and done up... they then discover that a 750k house with four bedrooms won't be taken by a family (who would love to buy it, but won't rent it) at £600 per week (which is a very poor return) so instead they end up letting it to four house-sharers, two of whom have girl/boyfriends so they rapidly end up back as an HMO.