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MarianC
MarianC, Solicitor
Category: Law
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I am a landlord operating a HMO and the council have

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Hi, I am a landlord operating a HMO and the council have approached me to say I need a license, which I didnt know. They said that I had two options: I could apply for one and pay four times the cost as they found out its HMO already or I could apply for a Temporary Exemption Notice where if accepted, the council give me 3 months to take it out of HMO and return it to single occupancy use. I did the latter as I cant afford the license fees and they have now rejected it and are saying we must apply for the license and saying we could be fined up to 30k and rent repayments can be made up to 12 months for the past year in respect of my three tenants. I am a good landlord and maintain the flat well. Any issues have been dealt with quickly and my tenants are happy. Can you please advise on whether the council can force me to continue to operate as a HMO where I cant afford the license fees and changes they are saying I must make and what can I do to navigate this sitiation with the potential fine and rent repayment?
JA: What steps have you taken so far? Have you prepared or filed any paperwork?
Customer: Yes a temporary exemption notice which has been rejected
JA: Where is the flat located?
Customer: Greenwich London
JA: Anything else you want the Lawyer to know before I connect you?
Customer: Thats it thank you
Customer: replied 6 days ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call.
Customer: replied 6 days ago.
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Good afternoon

Sorry to hear what you are going through.

Unfortunately, you are committing an offence by operating an HMO without a licence so the council are within their rights to issue an enforcement/fines.

Whilst they cannot force you to continue to operate the HMO, you are likely to be liable for the fines.

MarianC and other Law Specialists are ready to help you
Customer: replied 6 days ago.
Thank you for your Swift reply. I honestly did not know about this license. I got permission from my mortgage company to rent. I have tenancy agreements in place for each tenant and tenancy deposit scheme in place. The flat has been completely renovated and is in excellent condition and any issues are swiftly dealt with. I do everything properly and did not know about this license otherwise I would have applied for it and paid the £400 it allegedly costs. I have now been told my only recourse is to apply for the permit and pay 550 per unit, so £1650 in total for the license alone and then I will have to pay to make all the changes they have listed such as changing the doors to fire doors, changing the locks, getting more sockets and an interconnecting Alarm. This will all cost more than I have right now which is why I applied as advised to take the property out of hmo use as I was advised I could do on the first council visit by a member from their team. I was also advised she could see the property was in good condition and there were 3 tenants in a three bedroom for so a fine was unlikely. This was then handed off to someone else who has now said penalties are up to 30k and repayments maybe applicable for all 3 tenants even though they have been happy and there are no issues. What I want to know is I have been given 30 days to appeal their decision. They have informed me they have rejected my temporary exemption notice and said I must apply for the license now but they have not mentioned any fines. If I apply for a license now and pay all of this, can they still fine me? At what point do they give me their final decision? If they have not mentioned penalties by this point should I ask them if there will be no fines at this stage or not ask? Also if I appeal it, and win the appeal to take the property out of hmo use, can they levy a bigger penalty out of me then? I feel like I’m stuck between a rock and a hard place with no clarity and I’m being held over a barrel. I just want transparancy. What is the process for them applying a penalty and at what stage do they inform me of this? It’s not fair if I apply for a license to make this right, oh all of that and then they apply a penalty on top! How likely is this? Also do the tenants have grounds to apply for rent repayments up to the last year if they have been looked after and happy?

Good afternoon

I am unable to take a call at the moment but I can do this evening if that works for you.

Unfortunately, it is irrelevant what condition the property is and if you had obtained consent from your mortgage to rent the property. The issue here is you are carrying out an activity that requires a licence which you do not have.

When the council came to visit and gave you the two options, did they mention to you that it was possible the exemption may not be granted?

The changes they have listed are part of the regulations for a HMO property so if you do continue to operate the HMO, you will need to ensure these works are carried out otherwise you may face further fines.

The council do have rights to issue a penalty, if you refer to the government website it does set out the regulations:

https://www.gov.uk/house-in-multiple-occupation-licence

Fines and penalties can in some instances be unlimited as you will see on the link.

If you do not apply for the licences, the council are probably likely to issue a fine.

If you pay the additional fees for the licences and carry out the works they have suggested, I cannot see how they can justify applying a penalty on top of that aswell.

The tenants are able to apply for rent repayments regardless of whether they feel look afteer

Customer: replied 6 days ago.
Thank you so much for your reply Marian. When the council gave me the two options on the first visit they did say that the Temporary Exemption would likely be granted and I could bring the property out of HMO use to single occupancy. The officer who visited the second time has refused this exemption on the grounds that the council will not make the three tenants homeless even though we would not be making them homeless, we would be serving them 2 months notice. He said the council are thinking about the pandemic and the tenants but I cannot afford the license fee and all the changes and yet there are no provisions being made for the landlord during the pandemic. Is there any way they can consider monthly payments to help the landlord out during these unprecedented times? They already told me no. But I cant believe the council will think about the pandemic effects on the tenants and yet force me to continue to run a HMO and pay for it when I cannot afford to do so without taking on extra debt.If I pay for the licensee and carry out the works suggetsed, and they still issue a penalty on tip and apply for rent repayments, are there any provisions in law I can successfully quote or cite on appeal that would show this is a disproportionate abuse of power given I have accepted responsibilitiy and complied throughout the entire process?
You will not be able to give your tenants 2 months notice. Under current COVID guidelines, you have to give tenants at least 6 months notice to vacate the property which is likely why the council have refused and requesting the licence fees.There are some provisions for landlords given the pandemic (i cannot quote them off the top of my head) however the issue here is you operating an HMO without a licence which is an offence.It is extremely unlikely the council will issue a penalty on top of the extra licence fees in which case you can claim it is disproportionate- I cannot cite any specific clauses off the top of my head, it would require some research.I would suggest you contact the council and propose a payment plan.
Customer: replied 6 days ago.
Thank you Marian. I have already asked the officer of the case for a monthly payment plan and he has outright refused and said there will be no payment plan. I said we cannot afford to pay in full upfront and he said i that case we will receive a penalty. I asked if we cant afford that he said there will be a charge on the property. Can you please direct me to where I can research the provisions for landlords under this pandemic?We will apply for the license and we will have no choice but to take out a loan but I am concerned if they levy a penalty on top and I am obviously concerned I am going to have to take on more debt to apply for the license and changes alone.

If the case manager has stated that if you don’t pay the licence fee, you will receive a penalty, it appears to be an ‘either/or’ situation but it may be worth asking them if you pay the licence fee that you will not also receive a penalty. I appreciate I said earlier not to mention the penalty but it appears the case manager has already referred to the possibility so for your sake, I think it is worth asking the question.

If you refer to the government website, they are publishing and updating guidance in respect of COVID so I trust you will find something on there.

Customer: replied 6 days ago.
Thank you Marian. I will certainly ask. If they leave me in a state of limbo and state I must apply and they reserve the right to levy a penalty further down the road, is there any way I can force their hand to let me know now. I hate the incertainty and would feel better about this all if I knew this is what I had to do. But I already feel blindsided by them as they told me one thing then passed this onto someone who has told me the complete opposite and they are deliberately being evasive.

I'm not entirely sure to be completely honest. I am not familiar with council policy although I would assume that if you apply but do not carry out the works they require, they will be able to issue a penalty or if you do not obtain the licence they will.

Customer: replied 6 days ago.
Thank you Marian. I will apply and will carry out the works and pray for the best! In the meantime I shall ask them to clarify now where I stand and whether they intend to issue a penalty. If they do i shall appeal that under the grounds mentioned above. Thank you very much for your help.

No problem at all. I hope it works out for you.

I'd be grateful if you could rate my response so i am credited with assisting you today.

Kind regards

Customer: replied 6 days ago.
Thank you so much. I absolutely will rate you right now. Kind Regards

Thank you.

Enjoy the rest of your day.

Customer: replied 19 hours ago.
Hi Marian,Thank you for your email. I emaield the council directly asking if they will prosecute or levy a penalty or rent repayment if I make a full and complete application immediately and this is their reply...
"As your property has been found to be operating as an unlicensed HMO, you may be prosecuted or receive a fine which could be up to £30000. Early receipt of a valid application for a HMO license will be considered as a mitigating factor in calculating any penalty amount. Your application is considered valid once you submit the mandatory documents which are;
A floor plan; Guidance on how to draw an acceptable floor plan is found below
DBS certificates for any relevant parties issued within the last 12 months
A gas safety certificate issued within the last 12 months if there is gas in the property
And an Electrical Installation Condition Report issued within the last five years
Moreover, the tenants and/ or the Local Authority can make an application to the courts for a Rent Repayment Order."I read this that they are planning on giving us a penalty and/or applying for rent repayments. This is not fair given the circumstances and I want to reply and say that but there must be some written procedures they can refer me to or someone who can advise for sure. Surely after two visits someone must be able to tell me what is going to happen. I dont want to invite a penalty but at the same time this is hanging over my head. Please can you advise what I reply with?

Good afternoon

I do not read this as them saying they are planning on giving you a penalty and/or applying for rent payments.

They appear to be informing you of the action they are able to take.

I would suggest you make the full valid application for a HMO licence together with all mandatory documents as soon as you possibly can to mitigate the chances of them imposing a penalty.

kind regards