Painsmith Landlord and Tenant Blog

A practitioners landlord and tenant law blog from PainSmith Solicitors

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, , , , ,

Houseboats

In Mew and Just v Tristmire Limited the leaseholder obtained possession orders upon the expiry of 2 notices to quit.

Mew and Just lived in houseboats which were located in a rectangular shaped plot around the edge of a harbour. The houseboats are converted landing craft which were constructed locally during the Second World War. They were subsequently modified and made water tight and habitable. They were once capable of floating but now rest on wooden platforms which are supported by wooden piles driven and cemented into the bed of the harbour. Services such as water, gas and electricity were connected but they could also be easily disconnected.

An expert giving evidence at court confirmed that generally houseboats can be removed by crane and then floated to a new location however in this case given the age and condition, if the houseboats were moved they would be probably be damaged or destroyed.

When Mew and Just purchased the houseboats they did not purchase the plot that the houseboats were situated in, they were owned by Tristmire who served a number of notices to quit and section 13 notices to raise the rent. However Mew and Just claimed that they were not licensees of the plots but assured tenants under the Housing Act 1988 and as such the notices were invalid.

The argument put to the court by Mew and Just was that the houseboats have a degree of permanence so as to make them part of the plot and cannot now be removed without their disintegration. That even if they were in good repair they were just like houses on stilts which are not intended to be removed.

But the court found for Tristmire and held that that the houseboats remained essentially boats, albeit adapted for residential use. They were constructed elsewhere and placed in the plot and did not as such form part of the realty and therefore remain as chattels. The court compared the houseboats to caravans, which as designed, are moveable.

Therefore because the houseboats did not become affixed to the land Mew and Just could not become assured tenants and were indeed licensees and the notices were therefore valid.

We often get asked whether ASTs can be granted for houseboats and it is a grey area as confirmed above. It is the degree of permanency that is relevant and this detail needs to be obtained before any decision is made.

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

Landlords Register………

On the 14th June a Bill was introduced under the 10 Minute Rule. The Bill makes provision for a register of private landlords; to require private landlords to take certain actions in the event of anti-social behaviour by their tenants; to give additional powers to private landlords and local authorities in cases of anti-social behaviour by tenants; to establish a community fund to which private landlords must contribute; and for connected purposes

The 10 Minute Rule allows an MP to make his or her case for a new bill in a speech lasting up to ten minutes. An opposing speech may also be made before the House decides whether or not the bill should be introduced. If the MP is successful the bill is taken to have had its First reading.

The second reading is scheduled on the 18 November 2011. You will as always be kept up to date.

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

Trespasser

In Eaton Mansions v Stinger, Stinger appealed against a High Court decision that he had trespassed on the roof of a building when he installed some air conditioning units.

Eaton Mansions is the long leaseholder and Stinger was the sub lessee (it has now sold its interest). In 1980 Stinger had been granted permission to install air conditioning units. In 2007 and 2008 Stinger then installed further air conditioning units without obtaining the consent of Eaton or the head landlord Grosvenor Estates.

Numerous meetings were held by all three parties and their representatives about the consent for the new units, correspondence also went back and forth but Stinger still proceeded to install the units and claimed that Eaton had unreasonably withheld consent. Eaton argued that it had not unreasonably withheld consent because it was likely that Grosvenor would have refused consent and that would have then put Eaton in breach of their lease with Grosvenor.

When looking at the facts and the terms of the lease itself the Court of Appeal held that Stinger had in fact no right to install anything on the roof with or without the consent of Eaton because there was no provision in the lease for such an installation. The court also held that it would have been unreasonable for Eaton to refuse consent if Eaton was aware that Grosvenor would have consented to the units. But here Stinger knew that consent from the freeholder had not been obtained and yet Stinger still demanded consent from Eaton and then went ahead and installed the units in any event.

Grosvenor had indeed entertained Stingers proposals for the units but at best they were only prepared to offer an irrevocable licence for the units. They did not in their conduct indicate that a licence would be forthcoming and as such Eaton were entitled to be cautious when dealing with the matter.

It was therefore held that Stinger had not shown that Eaton had unreasonably refused consent for the new units and as such the appeal was dismissed.

Many agents are now managing blocks of flats such as this and are not familiarising themselves with the lease when making a decision on the running of the building. The lease is the contract between any freeholder and leaseholder and it must be referred to prior to any decisions being made to avoid expensive litigation such as this. It was due to the fact that Stinger obtained consent in 1980 that it automatically assumed that it was entitled to consent in 2007 when the lease made no provisions for such units.

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

Solicitors and Costs

In Neil Hare-Brown and QCC v Tent and Alison Trent and Co, QCC had 3 commercial leases for a property in Fleet Street, London. However, QCC had “swapped” company names and this had potential adverse consequences for Trent the landlord. The possible consequences were:

1. as income had been directed by QCC to the new company, there was a risk that QCC would be unable to pay the rent.
2. the presence of the “new” company was likely to cause problems as it was a requirement of Alison Trent’s lender that the demised premises be contracted out of the Landlord and Tenant Act Part II (1954).
3. another company, QCC Interscan, had been permitted by QCC to use the premises in breach of covenant.
4. there was a security issue about electronic security fobs that had been issued to named personnel of QCC which had then been distributed to other individuals who had no right to enter the demised premises.

Upon discovering the issues Trent claimed that she was put to some considerable amount of work to put the situation right both in her capacity as landlord and solicitor. The work included the variation of leases and where necessary licenses to assign. Trent looked to QCC to pay the bills for this work and although QCC paid they did so under protest and now seek an assessment of the costs.

The question for the court was therefore could the landlords costs be assessed?

QCC argued that Trent had been appointed their solicitor upon her suggestion and that Trent had refused to acknowledge QCC’s request to use their own solicitor to draw up documents which left them with no other option than to permit her to do the work.

Trent argued that the costs that QCC was seeking to challenge related to costs due pursuant to leases and other commitments arising from applications under the leases, and breaches of the leases, by them. She further argued that the costs were due to her in her capacity as landlord and argued that she has never acted as solicitor for QCC or anyone connected with QCC.

The court held Trent could not, as she had done, require QCC to pay the costs to which she has been put as landlord arising from breaches of covenant and at the same time, deny that QCC had any entitlement to a detailed assessment of those costs under the Solicitors Act 1974.

The court acknowledged that whilst it is right to say that the invoices were not printed on the Solicitor’s headed notepaper, nonetheless, Trent had accepted in her witness statement that her firm acted for the Landlord. In these circumstances, the court was satisfied that there was a solicitor/client relationship between Alison Trent as landlord and Alison Trent & Co as solicitor and that the firm rendered invoices to Alison Trent which, in her capacity as landlord and party chargeable, she has passed on to QCC for payment as tenant and third party. It follows, in the judgment that QCC is in principle entitled to an assessment under s.71 of the 1974 Act.

We often get told on the helpline that the landlord is a solicitor and that attempts are being made to impose certain restrictions which in a landlord and tenant situation are simply inappropriate. We therefore thought some of you would enjoy the article.

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, , , , , , ,

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, , ,

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, ,

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, , ,

Selective and Additional Licensing Consent

We have previously posted on proposed changes to the consent process for local authorities wishing to introduce selective or additional licensing of HMOs or other properties in their areas of responsibility.

The government has now published a summary of the responses to the consultation it carried out on this topic. The response break down much as expected. Local Authorities supported a move to give a general unfettered consent and opposed anything which would limit this. Landlords were opposed to the whole idea.

The plan going forward is not clear. The summary report states that the responses will now be considered. With the election in the offing it now seems unlikely that anything will happen before any new government takes power and therefore what happens will depend entirely on the outcome of the election as the Conservatives are unlikely to give a blanket consent.

Filed under: England only, ,

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