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Property manager landlord wins appeal against nine HMO convictions

A landlord and property manager has won his appeal against convictions relating to a House in Multiple Occupation.

Cyril Thomas, director of Platinum Crown Investments in Colchester, was fined £20,000 by magistrates last December.

The case was sparked by a tenant’s complaint to Colchester Council about heating and mould. This led to an investigation at the end of 2015.

Thomas faced nine charges, but immediately after the convictions he said he would appeal.

He has now had them overturned by Chelmsford Crown Court.

Afterwards, he said he was delighted.

He said: “It has been a costly, emotionally draining and time consuming process for all involved. The judge stated that all charges were to be dismissed due to insufficient evidence from the council.

“One of the main reasons why I was able to successfully defend myself was that over the last several years I had invested significantly in bespoke software systems that enabled me to provide the necessary evidence when required.

“It is important for property managers and landlords to invest in systems that help them to stay on top of all the legal requirements that are now in place.

“My defence barrister Archie Maddan pointed out several issues with the council’s case. Some of the issues included the fact that one of the alleged charges failed to state what Mr Thomas was actually being convicted for.

“Several of the alleged charges did not occur on the date that Environmental Health Officer Torben Wood initially claimed that they occurred on and were not confirmed by the judges to be offences that warranted a charge.

“The main reason for the dismissal was the fact that the council never had sufficient evidence to prosecute me in my personal name from the beginning but for whatever reason still decided to push the case forward.”

He said at least three of the alleged offences were due to tenant negligence – for example, taking lightbulbs from communal areas to put in their bedrooms, and leaving bikes in fire escapes despite written warnings from Platinum Crown.

Thomas will now be refunded the fine and can apply to have some of his legal fees refunded.

A spokesperson for Colchester Council said: “The earlier decision by Colchester Magistrates’ Court to judge Mr Thomas, rather than his company Platinum Crown Investments, had a key bearing on the case and means no party has been convicted for the breaches identified.

“However, the appeal was upheld on the basis that Mr Thomas, in his capacity as landlord, was not the person responsible – not that violations did not exist – and we therefore maintain that it was right to take the action we did against serious breaches of the regulations.

“While we will continue to work closely with local landlords and letting agents to improve standards of accommodation in the private rented sector, we remain committed in our duty to pursue legal action whenever accommodation is not being responsibly managed.”

Source: Property Industry Eye

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Only a week left before Mandatory HMO licensing is in force

With an extension of the rules bringing a wider range of houses in multiple occupation (HMO) into the mandatory licensing regime coming into effect on 1 October, landlords have just one week to apply for a licence.

This licensing requirement applies to all properties that meet the following criteria:

  • is occupied by five or more persons
  • is occupied by persons living in two or more separate households
  • and meets:
    • the standard test under section 254(2) of the Act
    • the self-contained flat test under section 254(3) of the Act but is not a purpose-built flat situated in a block comprising three or more self-contained flats, or
    • the converted building test under section 254(4) of the Act.

Properties that fall into scope of the new definition but are already licensed under a selective or additional scheme, will be passported over to the new scheme at no cost to the landlord.

Richard Lambert, CEO of the National Landlords Association (NLA), says:

“The Government made the announcement about mandatory HMO licensing in January, but we’re concerned that many landlords may not have applied for their licenses. We encourage all landlords to make sure they do so before 1 October to be compliant.

“It may be that landlords thought there was a six-month grace period, as was originally proposed. This is not the case and we don’t want to see anyone committing an offence through ignorance.”

The NLA is also concerned that local authorities are not prepared for, or are still unaware of, the mandatory licensing for HMOs.

Mr Lambert says:

“We have been contacted by a number of our members who have tried to apply for licenses, but the local authority has purported not to know anything about it or simply didn’t have the systems in place to process the applications.

“This is an unacceptable failing on the part of the Ministry of Housing, Communities and Local Government, which should have ensured all local authorities were up to speed with the changes. It’s disappointing that more consideration hasn’t been made for the significance of this change and the challenges local authorities face in implementing it.

“Our advice to landlords who have encountered this is to apply for an HMO license using the existing process, even if the council hasn’t updated their forms.”

The guidance for local authorities on HMO and residential property reforms is available at gov.co.uk

Source: Property118

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Licensing lottery: Some councils unprepared for changes to mandatory HMO licensing

Too many local authorities are unprepared for the changes to mandatory licensing that are due to come into force in less than two weeks’ time, the RLA can reveal.

The changes will require landlords who let a property to five or more tenants forming two or more households to apply to their local authority for a licence, irrespective of building size. A licence is valid for up to five years, and each HMO property requires a separate licence.

Despite the legislation change set to affect over 177,000 properties, the RLA is concerned that there are still many councils unprepared for this change, and has now written to MHCLG about this.

A lottery

While some councils, for example Birmingham City Council, Newcastle City Council and Havering Council ARE prepared for the change to mandatory licensing, the RLA has discovered that many councils are completely unprepared.

Examples include Manchester City Council, which does not yet have an online system up and running for landlords to apply for a licence, and Hackney Council, which does not yet have the necessary forms available on its website for landlords.

Out of date information

Some councils also have out of date information around mandatory licensing on their websites. For example, in the definition of a HMO, they state the current ‘three storey rule’ – this is that HMOs compromise of 3 or more storeys, occupied by 5 or more persons from two or more households. However, the websites fail to state that as of 1st October 2018, this will change, with the three storey rule set to be phased out.

Yet others are issuing licences for a much shorter period than the standard 5-year licence.  All new HMO licences issued by Norwich will be for just one year, meaning a vastly increased amount of paperwork both the council and landlords have to deal with.

The RLA is therefore reminding landlords that if they have a HMO property that will fall into the extended scope of mandatory licensing which does not already have a licence, they MUST apply for one BEFORE the 1st October. There is no grace period, so it is imperative for landlords to apply for a licence, or else they could face a fine or prosecution and a rent repayment order.

What the RLA has been doing

In ongoing preparation for the changes, the RLA has written to over two hundred local authorities reminding them of the changes to mandatory HMO licensing. You can read the letter we have been sending to councils here

In addition to this, the RLA has also written to some local authorities in relation to licence fees. For example, Cheshire East Council has been increasing the cost of licences-which they say will ensure that they can respond to increased demand of properties which will soon fall into the scope of mandatory licensing.  You can read more about this here. 

What you need to do

If your property requires a mandatory licence, and you have not yet applied, you must get in touch with your local authority about this. Each local authority will have different communication strategies. As there is no grace period for the new law, you need to act now so that you are not in breach and at risk of being fined.

Source: RLA

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City landlord licensing charges set to increase

The price of a landlords’ licence in Nottingham is set to go up after plans were approved today.

For houses with more than four tenants, landlords in most areas must obtain a Houses in Multiple Occupation (HMO) licence.

For ‘less compliant’ landlords, the price of a licence will go up by £810, from £910 for a new licence to £1,720.

‘Standard’ landlords will pay an extra £420 for their HMO licence – up from £910 to £1,330.

Landlords with accreditation will pay an additional £80, up to £990.

Previously, there was a flat fee for HMO licences, but from January next year, those who will pay the most will be those deemed ‘less compliant’, meaning those who are ‘consistently non-compliant or provide a poor application.’

It is the first change in the price of a licence since 2014. As with selective licensing, the council cannot make a profit from the scheme.

A leading Nottingham property expert said the cost will have to be passed on to tenants and would hit those at the bottom of the ladder hardest.

Giles Inman is from East Midland Property Owners, which represents around 600 landlords and 150 agents in the city.

He said: “The cost of it all is just getting silly. We weren’t kept in the loop or given any advance warning. There was just a consultation and we didn’t hear anything back, and then all of a sudden we’re informed that they’re going up. We never expected it to go up by this much.

“From a landlord’s perspective it’s just crazy and it’s come out of the blue.

“It’s just them raking in the cash. They already have the powers to deal with the less-compliant landlords without charging them more for an HMO.

“The costs will be passed on. We’re a business at the end of the day. I know the council thinks we should take the cost ourselves, but no business does that.

“So it will be passed on one way or another, and it’s the tenants on housing benefit and at the bottom of the ladder who will be most impacted by that.”

The revised licence fee will now be made up of two payments – one at application and one when the licence is issued.

Each licence can last up to five years, as long as the conditions of the licence are met and no other offences occur.

Councillor Jane Urquhart is the city council’s portfolio holder for planning and housing, and represents the Wollaton East and Lenton Abbey ward for Labour.

She said: “This scheme, along with others, is a major part of our plans to improve all types of private rented housing in the city.

“We believe something as important as providing decent and safe housing should be monitored and kept in check via a licensing scheme in the same way as taxis, pet shops and some beauty treatments.

“Not only does the scheme help to improve poorer standards of accommodation, it means tenants know what is expected of their landlord in terms of the management of their home.

“It also helps us to tackle rogue and bad landlords by providing a clear set of guidelines which all landlords need to meet, and helps prevent bad landlords cutting corners or ‘undercutting’ good ones, creating a level playing field for all.”

Source: West Bridgford Wire

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Agent who let out ‘fire hazard’ room in HMO is told to pay over £32,000

An agent who let a tiny room behind a kitchen to a tenant has been ordered to pay more than £32,000.

Viviane Almieda, of My London Services, in Willesden, pleaded guilty to breaching HMO licensing conditions, including failing to comply with the council’s amenity and space standards as well as obstructing the council’s investigation, in Willesden Magistrates Court on Tuesday.

She ignored warnings from Brent Council enforcement officers that a room behind the kitchen was not safe to rent out because it was a fire hazard.

The room in a converted three-bedroom property also measured less than 6.5 square metres – the minimum legal requirement for a single bedroom.

Cllr Eleanor Southwood, cabinet member for housing and welfare reform, said: “Housing tenants in rooms that are too small and hazardous to fire risks is illegal. There’s no excuse for it.

“Landlords, agencies or sub-letters who exploit tenants will pay heavily in court. Every resident in Brent has the right to a decent standard of living.”

Almieda was handed a £30,000 fine plus ordered to pay £2,090 in court costs and a £170 victim surcharge.

Source: Property Industry Eye

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Cheshire East Encouraging HMO Licensing

Cheshire East Council is reminding buy to let investors that new legislation is set to come into effect in October requiring that all houses in multiple occupation (HMOs) with over five occupants must be licensed.

From 1 October 2018, HMOs must be licensed if there are five or more occupants who are living in two or more separate households. This is regardless of how many storeys the home is. This means that around 500 of the approximately 600-650 HMOs in Cheshire East will require a compulsory licence. This is in stark contrast to the 51 who currently need it.

Landlords are being advised to ensure that they have completed their licence application ahead of the deadline. Operating without a licence is a criminal offence and any landlords who do so will face an unlimited fine.

Cheshire East Council cabinet member for housing, planning and regeneration, Councillor Ainsley Arnold said: ‘The changes in government legislation will allow us to bring HMOs under closer scrutiny and help ensure better management standards and living conditions for tenants. Our housing standards team is currently processing more than 40 licence applications from landlords and carrying out the necessary inspection visits. However, we know that there are many more properties that will require a licence and we urge landlords, who have not already done so, to submit their applications as soon as possible.’

The council is also aiming to encourage people to report any properties in their local area that they believe to be HMOs.

Councillor Arnold added: ‘Thank you to everyone so far who has reported the location of a HMO to us via our website. Our online reporting form takes just a couple of minutes to fill in and the information received allows our officers to investigate whether the properties are licensed and check that they are safe for people to live in.’

Source: Residential Landlord

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​Deadline to new HMO licensing approaches

Agents and landlords are reminded that new rules about the licensing of Houses in Multiple Occupation (HMO) are set to come into force next month.

All properties housing five or more people from two or more separate households will be required to have an HMO licence, from Monday October 1.

At the moment, a property with five or more tenants from separate households only requires an HMO licence if it has three or more floors.

The new legislation – which was first announced in December – will also see minimum space requirements updated.

From October, the minimum bedroom space will be 6.51 square metres for a single bedroom and 10.22 square metres for rooms occupied by two adults. Rooms housing children aged ten or below will need to be a minimum size of 4.64 square metres.

Landlords will also be required to provide an adequate number of bins for their properties.

The cost of HMO licences varies depending on the local authority, with some charging a few hundred pounds and others charging more than £1,000.

An HMO licence is valid for five years and landlords need a separate licence for each HMO they let.

The Ministry of Housing, Communities and Local Government has said that the new rules are being introduced to minimise rogue landlords taking advantage of increased demand for HMOs.

It says that the previous system meant that it was ‘pot luck’ whether a vulnerable tenant ends up renting from a rogue or good landlord.

The aim of the new rules is to reduce consistent rental property problems, including overcrowding, failure to meet health and safety standards and housing illegal migrants.

Fines for non-compliance with HMO licensing rules are unlimited, while failure to comply with minimum bedroom sizes could see a landlord fined up to £30,000.

Source: Simple Landlords Insurance

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Agents and landlords ‘left in dark’ over new HMO requirements despite huge penalties

Letting agents are reminded that the clock is ticking towards the October 1 deadline, when the rules on mandatory HMO licensing change across England.

There has been no government campaign to raise awareness among agents and landlords, and nothing to explain what appears to be a little-known exemption. This is despite the possibility of swingeing penalties.

Currently, properties of three or more storeys, shared by five or more people in two or more households, where facilities such as kitchen or bathroom are shared, must have a mandatory HMO licence.

On October 1, the “storeys” criteria is removed and any property, of any height, that meets the other criteria must be mandatorily licensed.

What agents may not know is that there is an important exemption: purpose-built flats within a block containing three or more self-contained flats are excluded from the requirement.

Nothing from the housing ministry has explained this or other new HMO rules – and yet the penalties are potentially severe enough to close a business down.

An HMO that is not licensed when the law requires it could land the agent or landlord, or both, with a criminal prosecution and record, an unlimited fine, and an order to pay court costs and a victim surcharge.

Alternatively, the council could issue a civil penalty of up to £30,000 and a rent repayment order of up to 12 months’ rental income.

While a property is unlicensed, a Section 21 notice cannot be served.

Licensing expert Richard Tacagni said agents should be absolutely certain that HMO properties falling under the new rules are licensed promptly.

He said: “Many agents don’t yet fully appreciate the implications, and their criminal liability if an application is not submitted on time.”

An excellent guide by Tacagni for all agents in England is here:

https://www.londonpropertylicensing.co.uk/mandatory-hmo-licensing

A second article is especially aimed at London agents but does explain the exemption for flats in purpose-built blocks of three or more apartments.

It also reveals that many London authorities – and this may well apply to councils outside the capital – are not making the process for HMO licence applications particularly easy.

https://www.londonpropertylicensing.co.uk/three-week-countdown-mandatory-hmo-licensing-rules-change-1-october-2018-are-you-ready

Source: Property Industry Eye

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Understanding HMOs…

If you have at least three tenants living in a property and they share a toilet, bathroom or kitchen facility, then the property is a House in Multiple Occupation (HMO). This means that special rules will apply to the property and it may need to be licensed by the council if it has three storeys or more with five or more occupants. Though it should be noted that local authorities do have the power to impose additional HMO Licensing on other, smaller types of HMOs.

THERE ARE SOME EXCEPTIONS, THOUGH…

Certain types of properties are exempt from licensing. Examples include:

• Two-person flat shares, which is a property that is lived in by no more than two ‘households’ each of which consists of one person.
• A property where the landlord and their household lives with up to two tenants
• Buildings occupied entirely by freeholders or long leaseholders

WHAT IF I HAVE A FLAT?

Flats have special provisions and a block of converted self-contained flats will not require an HMO licence, and a block of purpose-built flats can’t be an HMO as a block, but as individual flats can fall into the HMO category.

DOES IT MATTER HOW MANY OCCUPANTS LIVE IN THE PROPERTY?

Yes, any part of a building that is occupied by two people cannot be an HMO. For the property to meet HMO requirements, there must be at least three people involved.

IS THERE A SIMPLE WAY OF IDENTIFYING AN HMO?

In short, if your property includes the sharing of a toilet, washing and cooking facilities by three or more unrelated people in two or more separate ‘households’, which can be formed by just one person, then it’s likely that the property is an HMO.

If your property is in a block of converted self-contained flats, or mixed accommodation, and there are three unrelated people living there, it can still be an HMO despite there not always being a sharing of the washing and cooking facilities.

NEW RULES FOR HMO PROPERTIES

From October 2018, professional landlords investing in HMOs will need their properties to meet a new level of standards:

The new HMO rules are covered by The Licensing of Houses in Multiple Occupation (England) and can be read here. This was agreed by parliament on February 23rd and will come into effect across England this year on the 1 October 2018.

Under the new rules, bedrooms must be a certain size, with double bedrooms being at least 10.22m2 and bedrooms for under 10s at least 4.64m2. If the bedrooms are smaller than this, they cannot be used as sleeping accommodation.

The new rules will also see the definition of an HMO changing, with more landlords needing HMO licences and smaller properties also needing a licence.

Don’t let this put you off if you are thinking of investing into this market – HMOs can still attract higher yields than other types of buy-to-let investment properties and, if you are considering entering the market, using a mortgage broker that has access to a wide panel of specialist lenders is imperative.

Source: Property Forum

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HMO landlords: prepare for new rules

The government is cracking down on overcrowded house shares. If you’re an HMO landlord, make sure you’re up to date.

Landlords have just weeks to ensure they’re ready for new “houses in multiple occupation” (HMO) rules, which come into effect in England on 1 October.

The new regulations will bring more properties into the category of “multiple occupation housing” – this is where five or more people from two or more separate households live in one property (house shares, in other words). While at present a property is only classed as an HMO if it has three or more storeys, according to the new rules an HMO is a building or a converted flat where tenants share toilet, bathroom or kitchen facilities. This will mean roughly 160,000 additional properties will require an HMO licence, reckons the Residential Landlords Association. The new rules form part of the government’s attempt to crack down on landlords letting out overcrowded, sub-standard properties.

As well as widening the scope of what constitutes an HMO, the updated legislation adds some new conditions. The first sets out minimum space requirements. Landlords will be prohibited from letting rooms to a single adult where the usable floor space is less than 6.51 square metres (sq m). Rooms occupied by two adults will need to be at least 10.22 sq m, while rooms slept in by children aged ten and below will need to be at least 4.64 sq m. Local councils will have the discretion to require larger room sizes, but they won’t have the power to allow smaller rooms to be occupied.

Where a landlord is found to be letting a room that doesn’t meet the minimum size, local authorities will be able to grant a period of up to 18 months to rectify the situation. If no action is taken in this time, the landlord will be in breach of their licence and could either be prosecuted by the local authority or receive a financial penalty of up to £30,000. Another update is that landlords are now required to provide an “adequate” number of bins. Failure to do so is a breach of the licence and a criminal offence.

In terms of current HMO requirements, landlords must ensure that the manager of the house – either the landlord or an agent – is “fit and proper”, which means no criminal record or history of breaching landlord laws. Landlords must also send the council a copy of their gas-safety certificate each year, install and maintain smoke alarms, and provide safety certificates for all electrical appliances.

To apply for an HMO licence, contact your local council. Licences are valid for five years and you need a separate licence for each HMO you run. Landlords who already hold an HMO licence can continue to let their property until it expires; they will then have to apply for a new licence and make changes to their property so that it meets the new rules.

Licence costs vary from council to council. For example, Cambridge City Council currently charges £580 for a licence for an HMO of up to nine rooms, and £470 for renewing a licence. Croydon Council charges £250 per habitable room, so a licence for a five-bed HMO would cost £1,250.

Landlords face unlimited fines for renting out unlicensed HMOs. Even if the council takes no action, the tenants could apply for a rent-repayment order to reclaim up to 12 months’ rent, and while the property is unlicensed, the landlord cannot use a Section-21 notice to seek possession of the property. Note too that local councils can add other conditions to licences, such as improving facilities.

Source: Money Week