Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

More consultation over the Private Rental Sector

Due to the ever increasing demand for rental properties the Government have decided that a consultation on this area is needed. The discussion titled ‘Review of property conditions in the private rented sector’ is in its initial stages so no changes are imminent; but certain topics have been raised with a view to helping the system perform better and raise the standard of the housing industry to make sure tenants are protected and are able to live in a safe environment.

The intention of the consultation is to protect tenants from rogue landlords and agents but to try to balance this by not adversely affecting the good landlords/agents. The aim is to avoid imposing unnecessary legislation which could create more hassle, decrease much needed investment in private rented housing and result in further costs which will eventually be passed on to the tenant in the form of increased rent etc.

There are a number of topics that have been proposed as talking points for which they are inviting comments and suggestions. These include:

• Rights and responsibilities of landlords and tenants – How can it be made clearer to both sides what is required of them and what can be done if the other side has breached their obligations?
• Retaliatory evictions – How to prevent landlords from simply serving notice to evict a tenant that has notified them of necessary repairs to the property?
• Illegal evictions – Should the penalties against landlords convicted of illegal evictions be stricter?
• Safety conditions – Should smoke and carbon monoxide alarms be mandatory in all properties?
• Licensing of rented housing – Should there be mandatory licensing for all properties? Should there be voluntary accreditation schemes for Landlords so that the good landlords can be found more easily?
• Housing Health and Safety Rating System – Is more information required to make the system clearer for all parties?

This is a non-exhaustive list and so if you have any ideas of how to improve the housing market the details of where to send your proposals are detailed below and any suggestions made should be considered and discussed.

The closing date for responses is 28 March 2014 and they can be sent to PRSReview@communities.gsi.gov.uk

We will be looking to keep an eye on this and will update the blog when there are any further developments.

Filed under: England & Wales, , , , , , , ,

HMO mandatory licensing- calculating storeys

London Borough of Islington v The Unite Group Plc [2013] EWHC 508 (Admin)

Thanks again to David Smith and our friends at Nearly Legal for drawing this recent case to our attention. NL has summarised the case comprehensively here so the below is a quick overview.

The High Court in this case has clarified the rules on calculating the number of storeys of a property in a block of flats. This is important in order to determine whether a particular property falls into the mandatory licensing category.
The building in the case in question contained a number of flats over more than 3 storeys. Each flat comprised of one storey with up to six student occupiers in each flat – what you might describe as a standard HMO. The ground floor of the building was used as business premises.

The Court was asked to determine whether these flats were HMOs that required licensing. The statutory requirements are that if an HMO or any part of it comprises three storeys or more and it is occupied by five or more persons and those persons form two or more single households, then the HMO must be licensed.

The high court found that “it is the HMO that must comprise the three storeys and not the building in which an HMO happens to be found”.

So, where living accommodation is in a part of a building above or below business premises you must take into account each storey comprising the business premises. Where a series of self-contained flats sit above commercial premises, you count the commercial premises in your calculation and the number of storeys in the flat itself, not the building.

The case should make it simpler to calculate whether an HMO falls into the mandatory licensing category and should release many landlords from the requirement to license self-contained single storey flats that sit in a block. However, since failure to have a licence when required has such severe consequences including prosecution, fine and rent repayment orders, if in doubt do seek guidance from the local authority (armed with a print out of the high court ruling to wave at them if necessary).

This ruling contrasts with the case of R v Roderick John Williams 2008 but as a High Court decision will take precedence. In Mr Williams’ case, he was successfully prosecuted for having an unlicensed HMO. This HMO actually covered two storeys but it sat on top of a basement flat and the court decided that under the Licensing of Houses in Multiple Occupation (Prescribed Description) (England) Order 2006 [link] the two storey flat had to be calculated as having three storeys as it sat over a one storey flat.

Filed under: England & Wales, , , ,

Private Rented Sector Consultation

Just a reminder to everyone in the Rental Industry that the Communities and Local Government Select Committee is currently conducting an enquiry into the private rented sector. Submissions have been invited from any interested party dealing with the private rented sector. Submissions should be emailed to clgev@parliament.uk by 17th January 2012.

In particular submissions are being sought in connection with possible rent control and also regulation of the sector. Full details can be found here.

Filed under: England & Wales, , , , , , , , ,

Trips and slips with Section 21 Notices

The agent, landlord or lawyer must comply with the requirements of the deposit protection rules. To serve a valid section 21 notice the deposit must be protected and prescribed information served pursuant to section 213 of the Housing Act 2004 as amended by the Localism Act 2011 within thirty days of the tenancy starting or the deposit being taken whichever is earlier. If the deposit is not protected then a valid section 21 notice cannot be served until either the deposit is handed back to the tenant in full or with agreed deductions. If the Prescribed Information (“the Information”) has not been served then a valid section 21 notice cannot be served until the Information is served . (N.B. doing the above will not avoid any potential claim for failure to protect the deposit).

Notices need to be served in accordance with the terms of the notice provisions in the tenancy agreement; such as notices being served by first class post deemed served two working days later. Notices served pursuant to a “break clause” must comply with section 21 (1)(b) of the Housing Act 1988 AND the provisions of the clause itself. The courts will interpret the terms of a break clause strictly.
Another major hurdle relates to notices served pursuant to section 21(4)(a) Housing Act 1988. It is easy to get the date wrong, where the fixed term runs from different dates to the rent payment date. The courts have approved a “saving provision” whereby the notice can ask for possession “ after the end of the period of your tenancy which will next end after the expiration of 2 months from the service”. The believed end date is included within an accompanying letter.
If the property requires licensing under part 3 Housing Act 2004 for a House in Multiple Occupation (“HMO”) being selective licensing of residential properties. A licence will be required or an application in the pipeline before service of a section 21 notice.

Top Tips to serving a valid section 21 notice:
1. Check that the deposit is registered and Prescribed Information served BEFORE serving a section 21 notice.
2. If the deposit is not protected then hand the deposit back to the tenant either in full or with agreed deductions.
3. If the deposit is in a scheme but the Prescribed Information not served, serve the prescribed information BEFORE serving the section 21 notice.
4. Check the tenancy agreement for the service of notice clause. Does notice have to be served in a certain way? If so, do it.
5. Is notice being served pursuant to a “break clause”? Follow the requirements of the clause.
6. If the tenancy is periodic the 21(4)(a) notice use the “saving provision”.
7. Don’t cut dates too fine. A longer notice period might be quicker than re-serving a notice.
8. Check the HMO licensing requirements with the local authority.
9. Rent: Continue collecting the rent and passing it on to the landlord.
10. Make the landlord aware a section 21 is a notice seeking re-possession not forcing the tenant to move out without possession proceedings. The notice allows the judge to grant mandatory repossession in Court

Filed under: England & Wales, , , , , , , ,

The Property I let / manage is an HMO.

What do I need to do?

1. Comply with the Regulations (see below)
2. Check whether your HMO needs planning permission (see next blog)
3. Check the council tax requirements (see next blog)
4. Check whether needs licensing (see blog on licensing)

1. Comply with the Regulations
ALL HMOs need to comply with the HMO management regulations [SI 2006/372 in England and SI 2006/1713 Wales] , which apply regardless of licensing status.

The person managing* [ i.e normally the agent] and the person having control [normally the landlord] for the property must:

• Ensure that the name, address and contact number of the person managing are made available to each household, and the same must be displayed clearly in a prominent position in the HMO (Reg 3)

• Take the following general safety measures:
o Keep fire escapes free from obstruction and in good order and repair
o Ensure that any fire fighting equipment are maintained in good working order (Note: no stated requirement as yet to have alarms installed, but these are usually demanded on the basis that it is a reasonable measure to keep an occupier safe from injury).
o Take all reasonable measures to keep the occupiers safe from injury, having regard to the design, structural conditions and number of occupiers (Note that this means that even where under normal L&T principals the Landlord is not required to remedy a design defect, the Landlord/agent may have to attend to the same in HMO).
o Make safe, or prevent access to unsafe roofs or balconies
o Make sure low level windows are barred, or made safe from “accidents which may be caused in connection with such windows”, which we interpret to include falling out of them.

• Keep water supply and drainage in good, clean and working condition, including preventing frost damage and must not unreasonably cause or permit interruption to the supply (Reg 5)

• Provide a gas safety certificate to the local authority within 7 days of them requesting it (Reg6)

• Obtain an electrical fixed wiring certificate every 5 years ( at least), and supply to the local authority within 7 days of them requesting it (also reg 6)

• Not unreasonable cause or permit interruption to the supply of gas or electricity ( also reg6)

• Ensure the common parts are in good decorative repair, clean and free from obstruction, and in safe working condition including:
o All handrails and banisters in good repair
o Provision of handrails and banisters as are necessary for the safety of the occupiers
o Stair coverings ( i.e. carpets) safely fixed and in good repair
o Windows in common parts in good repair
o Light fittings in common parts to be available for use at all times to occupiers
o Shared Fixtures, fittings and appliances ( i.e. used by two or more households) to be in good and safe repair and working order, except where the occupier is entitled to remove it and/or beyond the control of the manager
o Shared outbuildings ( i.e. used by two or more households) in repair, clean condition and good order
o Garden to be kept in safe and tidy condition

• With regards to the entire HMO, to keep the internal structure in good repair, fixtures and fittings and appliances in good repair and clean working order, and all windows in good repair –unless repair is required as a result of the occupier failing to treat the property as she should do under the terms of the lease/licence ( i.e. fails to act in a tenant-like manner)

• Provide bins or arrange for the local authority to provide bins.

NB where the property is an HMO because it is a conversion ( an HMO under s257) , the manager is not expected to go into individual flats, but the above will apply to the common areas.

What if I don’t comply?

Failure to comply with the HMO management regulations is an offence. The maximum fine is £5,000.00 for each offence, although the average fine is considerably less, unless the landlord has refused to cooperate with the local authority. An example of the latter can be seen here.

To be continued…….

Filed under: England & Wales, FLW Article, , ,

Common Questions- “Olympic Lets”

1. Are the tenancies ASTs?
Most of you will be aware that for an AST the conditions are that the property is let to an individual who will use it as their principle home. Many Olympic visitors will be here in the UK on holiday therefore it is safe to assume that they will not be residing here and so will not have ASTs but “holiday lets”. These are simply common law tenancies. However some visitors maybe visiting contractors or employees and they will be working either at or during the Games. In those cases the property that you let could actually be let under an AST and the tenant could potentially remain there for 6 months provided they pay the rent as you will not be able to remove them using a section 21 notice. You are therefore strongly advised to find out the purpose behind the visit in order to safeguard the landlord’s position.

2. Do I have to protect the deposit?
Where a tenancy is not an AST then the deposit protection provisions of the Housing Act 2004 do not apply. However the risks described above should be borne in mind and there is no harm in registering a deposit if you are unsure.

3. Do I have to grant a tenancy at all?
It will be seen as a tenancy unless a landlord is living in the property and sharing basic amenities with an Olympic visitor. If you are concerned that the visitor could be eligible for an AST then you could adopt a serviced apartment arrangement whereby you provide services which are so extensive that they are incompatible with the tenants presumed right to exclusive possession. This will prevent the occupancy being a tenancy at all and so the protection granted by the Housing Act 1988 will not apply. However, this can be very hard to do in practice.

4. What about HMOs and licensing?
Whether the property is considered an HMO will depend on how many occupiers there are and whether they are occupying as their only and main residence. It is assumed that migrant workers occupy the property as their only or main residence. However, anyone here for a holiday will not be doing so. As always, the advice is to consult your local authority in cases of doubt.

5. I have heard there is some issue with short lets.
Lettings under 90 days inside London can be controlled by local authorities. A number of them will do so during the Olympic period. However, the control is by way of planning and requires a planning permission to be obtained for a short letting. However, a breach of planning is not a criminal offence. The local authority will have to identify the breach and then serve an enforcement notice. It is only once this notice has expired that an offence is committed. Normally these notices give a period of time to put the planning breach right and by the time this is up the Olympics will be over and the short let will have ended. However if you want to be cautious you should be able to obtain the permission for a modest fee.

6. What if the tenants do not leave at the end of the term?
The usual common law principles apply to a holiday let. That is that the tenant must vacate at the end of the tenancy. If they do not then landlords may apply for possession to the Courts the day after the term ends.

Filed under: England & Wales, FLW Article, , , , , , , ,

Is my property an HMO?

For a full definition go to s254 & 257 Housing Act 2004. For those who want a translations, read on.

This area is not straight forward so we have tried to make sense of the legislation and hope that you find this helpful! Basically, there are two definitions of HMO.

1. Whether your property is a house, or a flat, if you rent it out, and the property has 3*** or more occupiers ( note you need to count the occupiers not just the tenant, including children) and these occupiers make up more than one household*, sharing basic amenities ( e.g. kitchen, bathroom), then the property is likely to be an HMO for the purposes of the Housing Act 2004. There are other criteria, for example, the property must be the principal home of at least one of the occupiers. A Student house is considered the occupiers’ principal home thanks to s259 (2)(b). There are exceptions, including owner occupiers, prisons, care homes, student halls of residence, convents.

*For the purposes of the legislation a household includes members of the same family. Family members include partners** and relatives , partner’s relatives, partner’s relatives’ partners.

**Partner = husband, wife, civil partner (i.e. the other half of the couple)

*** Strictly speaking section 254 of the legislation states that 2 occupiers making up more than one household i.e. 2 non-related sharers, is an HMO but schedule 14 contains a series of exceptions which cannnot be HMOs’ and one of these is 2 person properties. Therefore these properties are not HMOs’.

2. A house that has been converted into flats may also be an HMO for the purposes of the Housing Act 2004. If it was converted not in accordance with the Building Regulations 1991, and one-third or more of the flats are let on leases of less than 21 years then the building may qualify as an HMO.

Scenario 1:
• Do you rent out your property?
• Is the property a house or a self contained flat?
• Is it occupied by more than 2 households* who share at least one basic amenity ( e.g. kitchen, bathroom)?
• Do you ( as landlord) live elsewhere ( i.e. you are NOT one of the households)?

If you answered YES to ALL the above questions then your property is most likely an HMO.

Scenario 2:
• Do you rent out your property?
• Is the property a house or self contained flat?
• Is it occupied by more than 2 households who share at least one basic amenity ( e.g. kitchen, bathroom)?
• Do you as landlord live in the property ( i.e. you make up one of the households?)
• Do you have 3 or more unrelated people living in the property with you?

If you answered yes to ALL the above questions then your property is most likely an HMO.

Scenario 3:
• Do you rent out your property?
• Is the property a converted block?
• Does it comprise only self-contained flats?
• Are one third or less of the flats owner occupied [ an owner occupier is someone with a lease of at least 21 years]?
• Was the conversion done before 1991, and therefore not compliant with 1991 Building Regulations?

If you answered yes to all the above questions then your property is most likely an HMO.
NB a purpose built block of flats, built after 1991 will not be an HMO, but its individual self-contained flats may well be.

If you are not sure as to the status of your property, then do look in the legislation here.
Next: The property that I let/manage is an HMO. What does that mean for me?

Filed under: England & Wales, FLW Article, , , , , ,

Reminder of HMOs’

Local authorities are gaining confidence in using their powers to introduce compulsory additional licensing of HMO landlords.

For example Oxford County Council is celebrating its “groundbreaking new powers” for licensing HMOs. From Monday 30th January every HMO in Oxford City Council’s area must be licensed and “every landlord who owns a property where three or more unrelated tenants live and share facilities such as the kitchen and bathroom will be required to get a HMO licence”.

Cardiff has announced a consultation period to consider extending its HMO licensing to two further wards.

Brighton and Hove City Council is consultation additional HMO licensing.

Nottingham City Council took the step in March 2011 to make an article 4 direction. providing that “from 11th March 2012, it will become necessary to obtain planning permission to convert a family dwelling (Use Class C3) to a HMO with between 3 and 6 unrelated people sharing (Use Class C4) throughout the whole of the Nottingham City Council area. Planning permission is already required for properties shared by more than 6 unrelated people”

The above is but a sample. Many other local authorities are looking to make Article 4 directions. Agents and Landlords are advised that if the property is an HMO, check with the local authority as to their current (and future) licensing requirements.

Given how complex this area is we will blog on HMOs’ further with:
1. Is my property an HMO?
2. My property is an HMO what do I need to do about that (ie the regulations for ALL)?
3. Local Authority says my property needs a licence – what do I need to do and penalties?
4. Council tax and other issues.

Filed under: England & Wales, FLW Article, , , , ,

HMO

Painsmith draws your attention to this news item published by Bristol City Council which has prosecuted some of its landlords for serious breaches of the Housing Act 2004. The landlords of one Bristol property have been fined more than £30,000 and ordered to pay over £5,000 in costs after being found guilty of serious breaches of the Housing Act 2004.

Interestingly the prosecutions were brought as a last resort only after attempts to work with the landlords to “turn the management of the property around” failed. Bristol City Council maintains that it is committed to working with private landlords to maintain and improve the quality of housing in the city.

If you are an HMO landlord the advice is – work with your local authority: respond to their letters within the specified time limits. If you believe that they are demanding measures not required by law, then raise this with them. If you are not sure of your rights then as always make sure you seek independent legal advice as soon as you can.

You can read the full article here.

Filed under: England & Wales, FLW Article, , , ,

Hey Oxford!

As many of our readers will be aware Oxford City Council has now launched it’s scheme to license every HMO within it’s jurisdiction. The primary rationale behind this was the need to deal with poor management of properties within Oxford.

In February, shortly after the new scheme was introduced, Oxford prosecuted Oxford Letting and Property Management Ltd for failing to manage a HMO property.

Oxford was alerted by a tenant of a property to a series of breaches of the HMO Management regulations, including:

  • Failing to repair common parts;
  • Failing to repair damaged windows;
  • Failing to ensure that the means of escape from fire was kept in repair; and
  • Failing to repair damaged kitchen units and worktops.

The agent pleaded guilty to offences under the HMO Management regulations and was fined £2000 with an additional award for costs of some £910.

Whilst the agent recognised the various breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006 and pleaded guilty accordingly the matter will not end there. Oxford will now be considering whether the agent is suitable to mange licensable HMOs. While we do not condone the agent’s failure to manage the property appropriately this is a very severe response which could destroy the agent’s business and is a hard lesson to learn.

Agent’s must not forget that they are directly liable for HMO property under the HMO Management regulations. If a landlord refuses to make necessary repairs to a property the agent will not be able to hide behind their status as the landlord’s proxy in order to avoid prosecution.

Filed under: England & Wales, FLW Article, ,

Oxford, again….

We have been provided with a copy of a letter that Oxford City Council is distributing to relevant parties in the lettings industry.

As regular readers will know, the Labour government amended the planning use classes in April 2010 to limit the C3 use class and created a C4 use class for HMOs’. We reported on this here.

After the election the new coalition government amended the General Permitted Development Order to allow movement between the C3 and C4 classes. This was reported here.

Local Authorities can opt out of the GPDO by making an Article 4 Direction and requiring planning permission to switch from C3 to C4 use. Oxford is stating that they have a shortage of housing and a high demand for HMO accommodation. This might appear to be inconsistent with a policy of increased planning control but Oxford justify the policy by stating that there is a shortage in all types of accommodation and that wholesale conversion to HMOs in all areas means that other areas are not satisfied. However, Planning Policy Statement 3 requires local authorities to adopt planning policies that provide sufficient living accommodation for all types of use. It will be for Oxford to show that their new restrictions on HMO accommodation do not violate this policy statement.

Finally, there is some doubt as to whether Oxford’s article 4 Direction will actually matter. As we explained in this post the fact that a property use moves from one use class to another does not automatically mean it is a material change of use, which requires planning permission.

It should also be noted that Oxford is not permitted to charge a planning application fee for applications made as a result of an Article 4 Direction and one possible way of frustrating the proposals is simply for a large number of landlords to make applications thereby tying up resources.

Thank you to Mark at College and County

Filed under: England & Wales, FLW Article, , , , , , ,

Manchester Makes Article 4 Direction

We have been informed that Manchester City Council has made an Article 4 direction in relation to HMO properties. This direction will come into force on 8 October 2011. More details can be found here.

This means that from the date the direction comes into force (8 October 2011) the amendments introduced in October (which we wrote about here) will no longer apply and landlords may need to seek planning permission to let their properties as an HMO.

Full details of the new planning categories and their effects can be found in this post.

However, there is some doubt as to whether the making of the direction actually matters. Even if an article 4 direction is made that does not mean that use as an HMO requires planning permission. This is because, contrary to popular belief, movement between planning classes does not require planning permission. What does require planing permission is a material change in use and it is by no means clear that a change of use to an HMO represents such a change. We have written more about this issue in this post.

At this stage any Manchester landlord who either is now or is considering renting a property in such a way that it will fall into the C4 planning category should consider applying for a certificate of lawful use as it will be hard for the Council to refuse it.

After October next year any Manchester landlord who is starting to use a property as an HMO or who proposes to do so will need to consider whether they should seek planning consent. If consent is sought and refused for the three months after the making of the direction (ie before 8 January 2012) the landlord may be able to seek compensation from the Council.

Naturally, if such consent is refused the landlord may also wish to appeal the decision of the Council.

Filed under: England & Wales, England only, FLW Article, ,

HMOs and Planning- Judicial Review

We have just been informed (thanks, Chris) that Milton Keynes Council has launched a judicial review of the decision by the new Coalition Government to make a further amendment to the General Permitted Development Order (GPDO).

As most of our readers will know the previous government introduced a new C3 planning use class which was designed to deal with HMOs. Movement from the C3 use class (for ordinary residential dwellings) potentially required planning consent while movement the other way did not require consent as it was permitted under the GPDO. This was an unpopular move and therefore the new coalition government has made a further change to the GPDO to permit movement from the C4 to the C3 use class. Accordingly, the announcement of the publication of the amendments to the GPDO came was made on 8 September and came into force on 1 October. All our posts on this topic can be found by following this link.

Milton Keynes Council is unhappy about the change which prevents them from regulating HMOs in their area through the planning process. At a meeting on 8 September they resolved to challenge the change on the basis that there was insufficient consultation and that the consultation was based on a decision that had, in effect, already been made. This has been done and, according to the Council’s press release consent has been given and the Government has until 8 October to file a defence.

One of the things the Council is seeking is an injunction suspending the operation of the order and they are also ultimately seeking that the change be quashed. This would of course mean that planning permission would potentially then be needed for changes from the C3 to C4 use class. The Council is also seeking a change in the legislation to allow them to opt-out of the permitted development order (called an article 4 direction) without the risk of having to pay compensation. Therefore it seems likely that, even if they were to lose the judicial review application, the Council will seek to make an article 4 direction in their area so requiring Milton Keynes landlords to seek planning permission for C4 use.

At this stage it might be wise for landlords who are letting under the C4 use class to seek a certificate of lawful use from the relevant planning authority which will legalise their actions.

Filed under: England only, FLW Article, ,

Oxford HMO Licensing- Update

We have received a letter from Oxford City Council.

It appears that they are considering the licensing scheme further. New recommendations will be put to the Executive Board and from them to the full Council in meetings on 18 October. It may be that these recommendations will include the withdrawal of the current licensing designation (due to come into force on 22 October) and the making of some alternative designations to introduce HMO licensing over time.

PainSmith Solicitors welcome any reconsideration by the Council of its HMO licensing scheme.

Filed under: England & Wales, England only, FLW Article, , ,

HMO Planning Permitted Development Order Published

Yesterday, Grant Shapps announced that the promised further amendments to the General Permitted Development Order (GPDO) designed to undo the creation of the C4 planning class had been laid before Parliament.

We have previously posted on the creation of the new C4 planning class and you can find all our posts on this topic by following this link.

Essentially the new amendments mean that movement between the C3 and C4 use classes in either direction is permitted without the need to apply for permission. Larger HMOs which have more than 6 occupiers will not be able to take advantage of the new Order as these properties do not fall into the C3 or C4 category and they will probably still need to seek planning consent.

Irrespective of the changes there is still significant doubt as to whether planning consent is actually required for all HMOs as it is debatable as to whether a change to HMO use (of any size) necessarily constitutes a material change of use.

Individual local authorities will still have the ability to make a direction (known as an article 4 direction) to dis-apply this part of the GPDO for parts of their district if they can present a reasonable case for doing so. They will need to conduct a suitable consultation in advance of making such a direction. Further, for 12 months after the direction has been made there is the possibility of claiming compensation if financial loss is suffered by the local authority refusing to grant planning consent in respect of a matter which would have been exempt from the need to seek planning consent but for the direction. Given the squeeze on budgets it is doubtful that many local authorities will want to incur the costs necessary to make a direction.

Finally it should be remembered that none of this applies in Wales.

The full Town and Country Planning (General Permitted Development) (Amendment) (No.2) (England) Order 2010 can be seen here.

Filed under: England only, FLW Article, ,

Is Planning Permission Really Required for an HMO?

A recent article in Planning magazine suggested that landlords did not have to seek planning permission for HMOs.

This was on the basis that a simple change in use class was not a trigger for the making of a planning application. This is true, in a sense, but the reality (of course) is that it is a little more complex than that.

The trigger for the making of a planning application is a “material change of use” in a property. Section 55(3) of the Town and Country Planning Act 1990 makes clear that changing the use of a building from a single dwellinghouse to multiple dwelinghouses is always a material change of use. However, changing use of a property to HMO status does not automatically involve changing the number of dwellinghouses. A property will generally only consist of multiple dwellinghouses if it is being let under a number of different tenancy agreements. Therefore section 55(3) will not capture a change to HMO use which simply involves three or more people sharing in a property.

Of course, use for letting to three or more unrelated sharers does fall into a separate planning class, the new C4 planning class and movement between classes is indicative of a material change of use. It is not, however, conclusive evidence and consideration must be given to whether the actual use has changed.

In March 2010 an interesting planning appeal decision on this issue was made. Here planning consent had been refused for letting a property as an HMO under the old (pre C4) use class system. The appeal officer overturned that refusal asserting that the change to HMO use from use by a single family would not cause significant extra disturbance to surrounding residents.

Looking at all these factors it becomes clear that for some HMOs planning permission may simply not be required. Of course, for properties where the use was already established prior to 6 April 2010 then there is no change of use by continuing to let as an HMO and these properties do not require consent. However, even if there has been a movement from the C3 to C4 use classes after that date this may not count as a material change of use for planning purposes. A lot will depend on the actual use being made of the property and whether it constitutes an actual change in the use of the property. For example, it could be argued that simply letting a property to a couple and a friend is not a material change of use even if it involves a movement from a C3 to C4 use class.

Equally, a route of appeal against a local authority refusal to grant C4 consent is opened up by the appeal decision described above if it can be shown that the proposed C4 use is little different from prior use under the C3 class and will have a limited impact on the surrounding residents.

Of course, a lot of this discussion may be irrelevant if the new government alters the permitted development orders as they have previously suggested they will. However, it will remain relevant until then and may be an issue in some areas where the local authority intends to opt out of the permitted development changes.

In short therefore, an HMO is only an HMO for planning purposes if it involves a change of use from that which has gone before.

Filed under: England & Wales, FLW Article, ,

Additional HMO Licensing

As has already been reported elsewhere Oxford City Council has become the first local authority in England to take advantage of the previous government’s blanket consent for additional HMO licensing schemes. They have passed a scheme through executive council to licence all HMOs in Oxford.

We have been passed and reviewed the report of the Environmental Health department which the Council have relied on in making the decision. A copy of this report is available here. A number of aspects are questionable.

For example, the proposed scheme is one which involves annual licensing so landlords will have to reapply, and pay for, a new licence every year. The primary rationale is that the current 5-yearly licensing system has meant that the Council has already spent all the license fee money they derived when the scheme came into force and so have no money to staff the scheme going forward. This sounds a little like saying that the rationale for annual licensing is that the Council cannot manage a budget over the course of 5 years.

Another surprising rationale for the scheme is the belief that it will encourage landlords to deal with anti-social behaviour. Given that private landlords have no legal liability for the behaviour of their tenants and almost no powers to do anything about such behaviour it is hard to see what the council expects to achieve in this area.

We believe that this scheme has the potential to be challenged. However, the time line for such a challenge is tight as it must be started in Court within three months of the decision being made, ie. by late October.

Having spoken to counsel we are prepared to discuss the possibility of taking such a challenge forward on a no win, no fee basis if a group of interested landlords wished to come forward.

Filed under: England & Wales, England only, FLW Article, ,

Council Tax in HMOs

An interesting new case in the High Court which was highlighted by the excellent NearlyLegal blog.

Where a property is an HMO for Council Tax purposes then the lanldord has the primary liability for Council Tax. The test for an HMO is different from that set out in the Housing Act 2004 and is provided by the Council Tax (Liability for Owners) Regulations 1992. This says:

The following are the classes of chargeable dwellings prescribed for the purposes of section 8(1) of the of section 8(1) of the [LGFA]-
Houses in multiple occupation, etc
Class C a dwelling which
(a) was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household; or
(b) is inhabited by a person who, or by two or more persons each of whom either-
(1) is a tenant of, or has a licence to occupy, part only of the dwelling; or
(2) has a licence to occupy, but is not liable (whether alone or jointly with other persons) to pay rent or a licence fee in respect of the dwelling as a whole.

In this case there were a group of tenants occupying the property on a single AST. As is common in these cases they were each paying a ‘share’ of the rent direct to the landlord. The conservatory at the property was unusable because the tenants had placed all of the landlord’s furniture in it (by agreement) as they had no use for it.

The tenants left owing in excess of £11,000 in Council Tax. Harrow tried to make the landlord pay it. The landlord appealed to the Valuation Tribunal who focused on the issue of the tenants paying ‘shares’ of rent and the inaccessibility of the conservatory and therefore found against the landlord.

The landlord appealed to the High Court. The High Court held that the Tribunal should have started by looking at the tenancy agreements. On the evidence there was nothing in the paying of shares that undermined the basic position that the tenants were jointly and severally liable for the rent and had access to the whole of the property. The conservatory was clearly available to the tenants on the evidence had they wished to clear it of the landlord’s furniture and use it.

The Tribunal had erred in law by assuming that payment of shares of rent equated to an HMO. The correct test was whether “the rent charges gave rise to a licence whereby they only occupied part only of the dwelling or whether they were paid in respect of part only of the dwelling.”

This is important as a great many local authorities are aggressively pursuing landlords in respect of tenants who fail to pay their council tax. This can usually be avoided by putting all tenants on a single agreement and not reserving any part of the proeprty for the landlord’s own use or storage.

Filed under: England & Wales, FLW Article, ,

Need for HMO Planning Consent to Be Reduced

Yesterday Grant Shapps announced that he would make amendments to the system of planning for HMOs.

It is not proposed to amend or scrap the new C4 planning class. Instead what is being proposed is an amendment to the General Permitted Development Order which will allow movement from the C3 planning class to the C4 planning class without a planning application being made.

However, local authorities will be able to use Article 4 of the The Town and Country Planning (General Permitted Development) Order 1995 to override this blanket consent in areas where they consider that there are excessive numbers of HMOs and that control over them is required.

While this will cause relief for many landlords by removing the need to obtain planning permission in many areas it will also make things more complex as individual planning authorities can elect to enforce planning requirements for HMOs or not at their discretion. Therefore while it will reduce the burden for many landlords it will also provide a further trap for the unwary as there will not be a consistent policy across the country.

It should be noted that the changes are not yet in force and will not appear until at least 1 October 2010. Therefore the requirement to obtain planning consent still applies at the current time. It should also be noted that this only relates to England and that there is no requirement for HMOs in Wales to have planning consent at this time.

PainSmith Solicitors are running a seminar on HMOs and planning consent on 22 June and will provide more guidance on this issue at that stage. More information on our seminar programme along with booking forms can be found on our website at www.painsmith.co.uk/Seminars.

Filed under: England only, ,

Additional and Selective Licensing Consent

Following on from our previous post on the plan to give a blanket consent to all local housing authorities in England to operate Additional and Selective licensing schemes. It seemed that this had been put to one side in the consultation response from the DCLG and no further announcement has been made.

However, this firm has been told by contacts within some local authorities that the blanket consent has actually been granted and that they are free to carry through discretionary HMO and landlord licensing schemes provided that they are satisfied that the legal requirements for such a scheme have been met. We are informed that several local authorities will now be carrying such schemes forward.

This is very surprising as there has been no announcement from the DCLG. Hopefully they will now clarify the position.

UPDATE- With thanks to Mark we have now obtained a copy of the blanket consent authorisation signed by the Housing Minister an a copy can be downloaded here.

Filed under: England only, , ,

HMO Changes in Northern Ireland

Some key changes in the way HMOs are operated are forthcoming in Northern Ireland.

Currently the legislation governing HMOs is part IV of the The Housing (Northern Ireland) Order 1992. This is being amended by some new and proposed legislation.

The first change is being made by the Housing (Amendment) Act (Northern Ireland) 2010 which was passed on 13 April 2010, although it has yet to come into force. The new Act makes a small amendment to the 1992 Order in order to clarify the definition of HMO. Currently the definition of an HMO in article 75(1) states that:

house in multiple occupation” means a house occupied by more than 2 qualifying persons, being persons who are not all members of the same family.

The change amends article 75(1) to make clear that the definition of family is to include “uncle, aunt, nephew and niece”. Apparently this is to recognise that members of an extended family increasingly live under the same roof while still forming one household.

The second change is proposed as part of the consultation on the Draft Regeneration and Housing Bill. Much of the bill is of little interest to the PRS. However, the key alteration is to who deals with the setting of HMO standards and creation of schemes. Currently the Housing Executive is required to prepare and submit a scheme to the DSDNI for its approval. This power is now to be devolved to individual councils. This will allow for HMO schemes to be tailored by each council to their individual needs but has the downside, which has been evident in England & Wales of massive differences between individual local authorities. This may be reduced by the fact that the DSDNI has to approve each scheme but there is the danger that disputes over the contents of different Council schemes will lead to a raft of wasteful litigation. These issues do not appear to have been addressed at all in the consultation document.
This consultation is available for responses until 26 April 2010.

Filed under: Northern Ireland, , ,

New Planning Categories for HMOs

We have previously reported that the Government was planning to amend the Town and Country Planning (Use Classes) Order 1987 to create a separate planning class for HMOs. The changes will come into force on 6 April 2010. The changes will only apply to England as Wales has its own devolved powers to deal with these matters.

The statutory instrument to carry out this change has just been published on the OPSI website as the The Town and Country Planning (Use Classes) (Amendment) (England) Order 2010.

The new planning classes will be as follows:
Class C3 has been amended to cover single households of up to six occupiers.
A new class C4 has been created which will cover HMOs of up to six people.
Properties with more than six occupiers will continue to be outside any planning category.

These changes will bring the definition of HMO for the purposes of planning in line with those used in the Housing Act 2004. The upshot of this issue is that any property which is an HMO (irrespective of whether it requires a licence) will now need to have a separate planning approval. The government has previously stated that they do not consider that this applies to tenancies which are currently in place as at 6 April but will presumably an application will need to be made on renewal. However, it is not clear how local authorities will view this area.

This will undoubtedly cause a massive increase in the number of planning applications and therefore the number of appeals. This will therefore mean yet another increase in cost to landlords and the amount of paperwork. Inevitably, many landlords will simply decline to let to sharers to avoid the hassle.

Filed under: England & Wales, England only, , ,

Planning and HMOs

Not sure how we missed this really but the Department of Communities and Local Government has launched a consultation on possible changes in planning systems to deal with HMOs.

This consultation is in response to an increase in HMOs in parts of the country and the tendency for these to be grouped together in small areas. This is sometimes referred to as “studentification”.

The current method of control of HMOs involves the licensing of larger properties. However, there is no power to refuse a licence on the basis that there are a large number of other HMOs in the same area. The problem is made worse by the fact that student naturally wish to cluster and the type of property suitable for conversion naturally tends to be built in blocks.

There is an aspect in which this is a bit ironic in that many of the issues with concentrations of HMOs are caused by the growth of educational institutions and the need to house the resulting large numbers of students. The government encouraged this but made no effort to ensure that the growing establishments provided suitable accommodation for there students. Therefore the private sector has tended to take up the slack. For the government and local authorities to complain about this now is a little unfair and is largely illustration of a failure to properly consider all the consequences of unchecked growth in higher education establishments.

In any event, the consultation ends on 7 August 2009.

Filed under: Uncategorized, , ,

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