Four tips for Landlords on problems with HMOs and HHSRS

At the CLT Housing Conference last Wednesday which I attended, some interesting points were made by David Smith (of Pain Smith Solicitors) in his talk.

Consultation for additional licensing
Local Authorities can apply for additional licensing powers but the regulations include requirements that proper consultation be carried out first with relevant parties, which should include, for example, local letting agents. If this is not being done, it is possible that any prosecution for failure to have a license (i.e. under the additional licensing powers) could be challengeable by way of judicial review as being an improper use of LA discretion,

HHSRS inspections
The Housing Health and Rating System is a system of inspecting properties introduced by the Housing Act 2004, where properties are assessed against 29 ‘hazards’. Properties which fail the inspections and show ‘category 1 hazards’ are then served with enforcement notices. However Local Authorities have, in most cases, a duty to serve notice in advance of the inspection, on landlords or agents. If this is not done, then landlords can apply to the Residential Property Tribunal for the notices to be quashed, which in most cases will be granted.

Hazard score calculations
When doing an inspection under the HHSRS, Environmental Health Officers (EHOs) are supposed to do the calculations before embarking on enforcement and prosecution. Landlords being prosecuted, and their advisors, should therefore ensure that they ask the LA to provide its complete calculation of the hazard scores at the earliest opportunity along with some evidence as to when the calculation was made. If these are not forthcoming landlords may be able to successfully defend the proceedings brought.

Appeals to the Residential Property Tribunal (RPT)
Time limits for this are tight and rigidly enforced by the RPT, so landlords should not delay if they consider they have a valid case. Often time is wasted by referring the matter to MPs, local Councillors and the media. Although these can all be helpful in many matters, correspondence with them will not be accepted by the RPT as a valid reason to excuse late submissions. Note also that it is the date the paperwork arrives at the RPT which is the date calculation point, not when it is posted, so if there is any likelihood of a postal delay, you might want to consider delivering it personally or paying for a courier (note that the RPT are not on the DX - the private delivery system used by many solicitors and other professional organisations).

***

These are just a few of the points made by David in his talk, but enough to see that this is a complex area of law. If you have a problem relating to LHA or HHSRS, a good solicitor who knows his way around the legislation and has experience in the practice and procedure is important. Davids firm Pain Smith are well worth considering, as they are one of the few who have real expertise and experience in this area of work.

Shoddy HMOs? Don't blame the law, blame the enforcers

A recent article on the BBC news site, complains that landlords are avoiding the HMO licensing regulations by developing HMOs in buildings which do not come within the categories which require licensing, which in most cases requires a building to have three or more stories. Hence, the article implies, landlords are able to get away with shocking standards with impunity.

Well yes, but thats not wholly because of the HMO legislation. There is already power available to Local Authorities to deal with substandard properties. Under part 1 of the Housing Act 2004, Local Authorities can carry out inspections on properties under the Housing Health and Safety Rating System and serve improvement notices on the landlord requiring him to bring the property up to standard. If the landlord fails to do this, the Local Authority can prosecute, and also has the power to get the repair works done itself (and recoup the cost from the landlord).

Any one can contact the Local Authority if they are concerned about the standard of a property, it does not have to be the tenant. Local Authorities have a general duty to "keep the housing conditions in their area under review with a view to identifying any action that may need to be taken by them" (s3(1)).

Then there are the HMO management regulations. These require all HMOs to be managed properly and comply with basic standards. Landlords not complying with these, can also be prosecuted.

So although extending the licensing requirements might help, Local Authorities already have powers to deal with shoddy properties in their area, whether they are HMOs or not. The problem, so far as I can see, is not lack of power to do these things, but lack of funding and manpower. Presumably, as Mr Brown has mortgaged the country in order to pay the banks, this is not a situation which is likely to improve in the near future. What do you think?

HMO Landlords fined in Manchester

More and more landlords and agents are being prosecuted under the HMO licensing regulations. For example, a report in the Sikh Daily Times mentions two cases under the HMO legislation in Manchester.

In cases heard 20 July 2009 at Leeds Magistrates Court, a landlord, Mrs Ghamar Gill, was fined £1,000 and ordered to pay costs of £1,554. An inspection of her property revealed a lack of adequate fire precautions and the property had no fixed heating system which meant tenants had to rely on portable heaters. No doubt the Local Authority will have served an improvement notice on her in respect of this.

The other case involved an agent, Mr Qumar Javed of 2View Properties management company, who had taken over the management of a property on behalf of a private landlord and failed to license it. He was fined £2,000 and ordered to pay costs of £828.

Whether you are a landlord or an agent, the legislation must be complied with. If you own or manage a property with more than five tenants and you don’t know if your property needs a license or not, have a word with someone at your local authority. You can find contact details via my Local Authority Directory.

Do you know of any landlords who have been prosecuted?

HMO landlords water rates shock

Note - the Landlord Law Blog has now moved to www.landlordlawblog.co.uk.

***

A long standing Landlord-Law member has written to me informing me of a potential problem for HMO landlords with water rates. He tells me that

"I recently had a revised water bill from Thames Water back-dated six-years totalling nearly £8.000 for an eight-studio HMO that I own. Previously, I had paid the water rates based on the rateable value of the building (£circa £450.00 pa) as there is only one water supply that enters the property. I'm not sure whether there has been a change of law, but Thames Water (and, I believe, other water companies) are now billing each studio separately. Since I do not have a meter on the property, they have based the charge on the average water consumption of other (separately rateable) studios in the area. Since my studios are almost certainly a lot smaller and have single occupancy, I am planning on having a water meter installed as soon as possible."

Fortunately my informant managed to get the invoice changed so it was only backdated to October 2008, however he wanted me to know the situation so I could warn other HMO landlords of the possible shock in store for them.

HMO licensing – tenants entitled to rent refund

I was interested to read the report here about a landlord in Liverpool who was convicted of operating a House in Multiple Occupation (HMO) without a license, and fined £3,000 plus costs. The Council then wrote to all his tenants, who successfully claimed back a part of their rent.

The rent refund application must be made to the Residential Property Tribunal (RPT) who can order the landlord to pay back up to 12 months rent to his tenants. In this case the RPT ordered the landlord to refund three months rent. This totalled £3,900, so in total this landlords failure to obtain a license for his property has cost him over £7,000 (if the costs order is taken into account).

Tenants wanting to make a similar application will find a pdf giving guidance and other information linked from the right hand margin of this page on my web-site www.landlordlaw.co.uk.

Landlords who are worried that their property might need a license, should contact their Local Authority asap. For contact details see the Landlord-Law Local Authority Directory.

Note that we are still compiling our list of HMO licence fees charged by different Local Authorities.

Councils get tough on HMO regulation evaders

I have just seen two reports of landlords breaching the HMO regulations being fined.

In Redditch, Nadeem Asghar, (23), pleaded guilty to operating a house in multiple occupation and was fined £2,000 and ordered to pay £1,071 costs.

In Loughborough Mohammed Tayaib Ali Chowdhury (age not given in the report) was fined a swinging £10,000 and £1,015 costs. His property, a three-story Victorian terrace in Toothill Road, Loughborough, was occupied as an HMO by nine adults and two children, without a license.

There seems quite a gap between the two awards, so either the Loughborough Magistrates are considerably harsher than those in Redditch, or there is something we have not been told.

Still, defaulting HMO landlords beware – it could be you next!

The problem of landlord regulation

A recent article in Inside Housing looks at how landlords are using the governments review of the private rented sector to call for a review of the HMO licensing system, which they say is not working. One organisation is asking for it to be done away with altogether, allowing landlords to ‘self regulate’.

The main criticism of the HMO licensing scheme is the way the license fees vary across the country, with some authorities charging over £1,500 per property and others charging under £200. I have to say I have a lot of sympathy with landlords complaints here, our own Landlord-Law list of licensing fees shows a very wide variation. This cannot be right.

However in my opinion one of the best chances of dealing with poor conditions in properties and rogue landlords should be via the local authorities and the licensing scheme. The problem is though that in many cases they are not using their powers properly, most likely because of lack of resources. The Inside Housing article mentions a "substantial fine slapped on a Liverpool landlord last month" and this is quoted as showing that the regime is working. I am really pleased that at least one bad landlord has got his comeuppance under the regs, but suspect that there are many others slipping through the net. The fact that this item is newsworthy (when if the councils were doing their job, such orders would be common practice) is telling in itself.

Which is a pity, as if the local authority powers, which they already hold, were being used as they should be, then this would do a lot to solve the problems of substandard housing. It really needs an outside body to enforce standards, it is unfair to expect tenants to have to do this themselves. Not only because they are then at risk of retaliatory eviction under section 21, but also because bringing a legal action is a stressful, and (unless legal aid is available, which often it is not) expensive process which many tenants do not want to undertake.

Furthermore, why should they have to? Under the Housing Act 2004, poor standards are technically a crime and local authorities are the organisation charged with enforcement. We do not expect victims of burglaries to hunt down and prosecute the thieves. Why should victims of substandard housing have to sue their landlords in order to obtain the decent standards they are entitled to under the law? The situations are not wholly parallel, I agree, but it is a valid point of view.

As for the suggestion that landlords should regulate themselves, this is laughable. I wholly agree that many, probably a majority, of landlords are law abiding and provide decent properties which not only comply with the standards but surpass them. However how are these landlords, or indeed the landlords associations, going to do anything about the non compliant landlords? They may not approve of them, but that isn’t going to do any good! The only way that landlords could self regulate would be if membership of a landlords or similar association were made mandatory and the associations given powers to act against members who breach their standards. This is one of the options being looked at by the Law Commission in their responsible renting project. However many landlords associations do not want this role.

My preference would be for regulation of non complaint landlords to be done by an outside body, the most appropriate being the Local Authorities, as they already have powers in this respect. The main reason why this is not being done properly already, is a lack of resources. Which means under funding by the government. Over to you, Gordon.

Local authority takes action on illegal HMOs

I was pleased to read in this report that in Kings Lynn, Local Authority officials are checking up on HMOs. There is not much point in having laws to legislate HMOs, poor conditions in property, and the like if nothing is done about it.

As was pointed out by Mark P in the comment here (you need to scroll down), many Local Authorities are unable to do anything due to lack of funds, so it is good to see that are taking their responsibilities seriously.

My feeling is that the only way properties owned by the worst landlords are going to be improved for their tenants is via action from Local Authorities. Probably the most effective course of action would be for the LAs to do the repair work themselves and then re-coup the cost from the landlord. They do actually have the power to do this now, but perhaps for them to use these powers, their right to recoup the cost from the landlord should be beefed up a bit. If landlords feel that they are going to lose their rent for a few months or years, it may persuade them to put their own house in order, so as to avoid it being put in order for them.

HMOs again

I have seen a couple of reports recently on the internet (here and here) saying that a study by Heritable Bank has recommended that the HMO system be reviewed, as there is such a wide discrepancy between the license fees charged by different local authorities, and also a wide variation in the way they deal with licensing generally.

Strangely, I cannot find any mention of this report on the Heritable Bank web-site, although maybe I am not looking in the right place.

However everyone who has anything to do with residential landlord and tenant law and practice, must know of this wide variation in license fees, which many feel is wholly unacceptable. It has been mentioned several times on this blog, and I have also been developing a list of different license fees, which you will find here. Fees on this list run from about £30-50 per room or unit to £1,100 for Newcastle (as mentioned in the articles). In fact though, the most expensive Local Authority to my knowledge is Southend. However they cunningly disguise their high charge by saying that it is £660 for two years, whereas most authorities charge for a five year period. The Southend fee for a five year period works out at £1,650.

There is no doubt that the new HMO regulations have greatly upset landlords, and I believe that many former HMO landlords have now sold up altogether. On the whole I do not think that the regulations are too excessive. The worst problem, that of the wash hand basin requirement for large HMOs, has now been dealt with. The regulations were only introduced last year and perhaps should be given a bit longer to bed in before any revisions are made. However I do think that the wide fee variation is generally undesirable and this aspect should be looked at. Whether it will or not, is of course another matter.

Oxford City Council to extend HMO licensing scheme

Landlords in Oxford who let to three or more unrelated tenants who share amenities (i.e. bathroom, toilet, kitchen and living space) beware! Your city council is seeking to extending the current mandatory licensing scheme (which just applies to the larger properties of three or more stories and five or more occupiers in two or more households) to all HMOs. This will include, for example, three students sharing a small two story house or a flat. See the report from the Oxford Mail here.

The city council say that 26% of houses in Oxford are privately rented (many presumably to the large student population), 61 per cent of HMOs are below standard in terms of fire precautions, and 29 per cent of HMOs have below adequate management. The Council hope that extending the licensing system will allow them to change this. I hope they have sufficient manpower to deal with the massive amount of extra work they are taking on.

No doubt other cities with large student populations will in due course be looking to do the same as Oxford. Although of course much of the student population in Oxford comes from a ‘posh’ background, so they may be under more pressure to deal with the problem of sub standard student accommodation.

The city council have started public consultation on the proposals. If you want to be involved in this the email address is hmos@oxford.gov.uk or contact the HMO licensing officer on 01865 252307. After this process they then have to apply to the government so the extending HMO licensing regime is not going to come into force until next year at the earliest.

No smoke, no fire ...

Note - the Landlord Law Blog has now moved to www.landlordlawblog.co.uk.

***

Who’d be a smoker today? First it was just a few places, then transport with the trains and busses bringing in a ban, now its banned practically everywhere! Happily I gave up quite some time ago so its not a problem for me.

It is going to be a problem for landlords though, particularly HMO landlords, as from 1 July they must not permit smoking in any of the communal areas of their properties. This includes things like shared stairways, lifts, common parts in houses converted into flats and shared kitchens, toilets and the like. Notices must be put up in entrances, and it must be made clear to tenants that slipping off to the toilet (a shared one that is) for a quick ciggie is definitely not allowed!

In point of fact, landlords should have been wary for some time of allowing any smoking in the common parts of their properties, if only because of the 2000 Court of Appeal decision in Ribee v. Norrie. This is an entertaining case with many typically British case law features – a quotation from Phillip Larkin, reference to a Lord Denning decision, Rylands and Fletcher (escape by fire), and ‘a sprightly 70 year old lady’ (with a ‘heroic’ pet spaniel) who had lived in the adjoining property all her life.

The case makes the point that landlords should take care to prevent their tenants smoking and allowing fire to escape and damage neighboring properties – Mr Norrie ended up paying a judgment debt of £5,063.02 plus a substantial interest payment and costs. One of the Judges even suggested that he should have appointed a live in manager or moved to live at the property himself.

So bear in mind landlords, that if you do not have strict no smoking rules and notices, and your tenants break the law, you are risking not only an on the spot fine but also (if fire escapes to next door) a claim for damages from your neighbours.

Buy to let blight

There is an interesting article in the Guardian pointing out that buy to let landlords are buying up properties suitable for families in Nottingham and letting them out to students, and that this is causing major problems in the area. Students leaving the place in a mess, shops closing and pubs closing during vacation, and schools being put at risk as there are fewer children.

Emailed comments from readers at the end confirm this trend for other towns such as York and Bath and bemoan the fact that absentee buy to let landlords are being allowed multiple mortgages by landlords helping to push property prices beyond the reach of ordinary people.

It is a difficult problem. One answer is no doubt the extension of licensing suggested by the article, which points out that landlords are selling larger properties and buying two story ones to escape the current licensing regime. Any extension of licensing would be bitterly opposed by the landlording community however (many of whom are responsible and provide an excellent service), and local authorities would struggle with their present funding to deal with this additional work.

However the real problem is undoubtedly the shortage of housing generally. After all students have to live somewhere. Universities generally bring benefits to towns and cities, but you cannot have a university without students! Also many students will stay in their university town and become part of the community - at least that is very common in my own city of Norwich (my husband being one such!).

It looks as if the problem may be relieved to a certain extent in Nottingham as at least 5,000 purpose built student rooms are to be built there shortly. If other universities follow suit (and if there is profit to be obtained from student housing they probably will if they can get the investment), this will help considerably. However unless either more property is built, or there is a property crash, or wages increase substantially, it is unlikely that property will become more affordable for low income families.

But then, it was ever thus! Low income families being unable to afford to buy their own homes, although unfortunate, is hardly a new problem.

Two more bad landlord stories

Landlords may moan about the new HMO licensing rules, but two stories which have come my way recently show that there are still bad landlords out there.

Firstly, this report on Youillscar Mohammed a Landlord in Glasgow who not only let out HMO properties without the proper fire precautions, but asked tenants to lie for him so he would not have to pay the license fee.

Then there is our old friend, ASBO landlord Dickens from North Wales, who has (according to a report in the Daily Post) recently had charges brought against him under the gas safety regulations. Although apparently he has now sold most of his portfolio, so the tenants of Conwy are now fairly safe from him.

I dare say these are not the only offenders. Although I agree that the disparity in the license fees across the different authorities is unfair, I do think that basically the regulation of landlords, at least in the more vulnerable HMO area, is justified, if it helps prevent this sort of thing, and keeps tenants safe.

Councils in crisis with HMO backlogs

An interesting article in Inside Housing gives the not entirely unexpected news that Local Authorities are finding it difficult to cope with all the licensing applications they have received. Indeed it appears that some of them have not issued any licenses at all yet.

A survey of 10 Councils by Inside Housing showed that 6,380 applications had been received but only 348 licences had been issued. Of course 10 is a very small sample and I am sure that many councils are doing splendidly. However I expect the general view put forward, that Councils are finding it difficult to deal with the applications received, is a true one. Indeed I would be surprised if this were not the case, bearing in mind that so many applications have had to be made at the same time, and that councils are unlikely to take on extra staff to deal with it.

The sad thing is that due to the pressure of dealing with the licensing applications, staff are unable to be out there dealing with the bad landlords, none of whom will have submitted their applications.

Still it is not all doom and gloom. One day they will get over the bulge of work and be able to take stock of the situation. They will then know who is good and who is bad. And hopefully then, there will be the will and the power to deal with the bad landlords.

Licensing lemmings

On my researches on the internet I keep reading about how landlords are selling up to avoid licensing. But is this really the case? When speaking this afternoon to Dave Princeps, Operations Manager at Camden Environmental Heath Section and Chair of the London Landlord Accreditation Scheme, I asked him what he thought about it.

"Its quite true" he told me. "Some landlords seem to be terrified of the licensing scheme and are selling their properties at a loss to avoid licensing. Some other landlords are making quite a killing, buying up these properties. Seems silly to me".

Silly indeed. As he pointed out, the cost of licensing (which even with the most expensive local authority works out at less than £1 per tenant per week) is probably far less than the losses which some of these landlords are taking on their properties, as they rush lemming like to sell them.

Mind you, I forgot to ask him about the washbasin problem. Schedule 3 of the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006 (section 2.2) provides for every unit of living accommodation of an HMO where there are five or more occupiers, to contain a wash hand basin. This apparently is causing some problems, as in many cases it would prove difficult and expensive to put a wash hand basin in every room as appears to be being required in the statute. Different authorities apparently are taking different attitudes to this. Some are taking a strict view, others less so.

So perhaps this is another reason why so many HMO landlords are throwing in the towel. Still maybe the purchasers of their properties will have made a sufficient profit on the deal with to enable them to get this work done should it prove necessary.

It is to be hoped however that the properties do not go out of letting altogether. As I mentioned in my earlier post accommodation is badly needed, HMO accommodation in particular.

More problems with HMO licensing

It looks as if the additional administration associated with HMOs is putting landlords off landlording. A survey by RICS, reported here finds that landlords are either selling up or are just letting to three or less people, in order to avoid licensing.

Which would mean that although licensing is cutting down on rogue landlords, this is at the expense of having less properties available for rent. The groups most affected are students, particularly in London, and immigrants, who make up a large percentage of the HMO market.

There are several knock on effects. One will probably be that the trend for students to stay at home (started by the loss of grant income and imposition of course fees) will increase. Another is that there will be even more pressure on local authorities to find accommodation for those vulnerable members of society in priority need.

Many landlords are also deeply angry at the lack of consistency in the way local authorities are treating HMO licensing, particularly the enormous variation in the fees (for example see my HMO license fee list), and the standards imposed, recently commented on in an article in the Observer. For example the variation in the interpretation of the regulations which apparently require larger HMOs to have a wash hand basin in every unit of living accommodation. And indeed the fact that this requirement, which if interpreted strictly will result in enormous expense being incurred by many landlords for no apparent good reason, is being imposed in the first place.

It is unfortunate that these well meaning regulations, may turn out to have a negative effect, in that much needed accommodation will no longer be available to those who most need it.

An uneven playing field for landlords

The new HMO licensing regulations are now effective and the three month 'grace period' has now ended. Landlords who have failed to obtain a license face fines of up to £20,000, plus risk tenants applying for rent repayment orders while being unable to evict them via the section 21 procedure. But have the government played fair with landlords?

In a recent press release the British Property Federation accused government of deliberately making the regime more complex by allowing local discretion as opposed to following a standardised approach across the country.

For example there is a huge variation in license fees, which run from under £100 to over £1,000 per property (for example see the HMO license fee list I am developing). This variation is massively unfair on the landlords in the expensive boroughs, particularly those with a large portfolio, who will see their colleagues with similar properties paying a fraction of the fees they are having to pay. Tenants will suffer also as rents will no doubt rise to cover this additional expense. It appears that the governing legislation (the Housing Act 2004) allows capping but for reasons best known to themselves government preferred to allow the current uneven playing field.

The BPA also criticise the government for its delay in its preparations which meant that local authorities were not up to speed in April when the regulations first came in.

South Tynside Council gets tough on rogue landlord

When a South Tynside landlord tried to evict his tenants rather than get an HMO license he was asking for trouble. And he got it.

When one of his tenants applied for re-housing the Council realised his landlord was acting in breach of the law. The Homelessness Team alerted the Environmental Health Service who tried to contact the landlord. However as this proved impossible, they swiftly took control of the house under an Interim Management Order - introduced under the new Housing Act 2004. This allows them to manage the property until the problems have been resolved, after which it is handed back to the owner.

South Tynside believe that they are the first authority to use these powers. Good for them! I bet they won't be the last though.

Registration in Scotland

All those English landlords moaning about licensing should be grateful that they are not in Scotland. All Scottish landlords now need to register both as a landlord and per property (£55 and £11 per property for a three year period).

A report in Residential Landlord states that some 57,000 have registered over 105,000 properties netting over £2.7 million registration fees.

If you are a Scottish landlord and have not yet registered, you can do so here

HMO tenants have duties too

As I have mentioned before in this blog, there are new management regulations now in force for landlords of HMO properties. These provide for the landlord (or his manager) to provide contact details to occupiers, ensure that the property is safe in various respects (fire safety, handrails and banisters, bars on windows with low cills etc), maintain the property in a good condition, get proper certificates for gas and electrical installations, deal with rubbish and bins properly etc etc. All important management things that will ensure that HMOs are better and safer environments in which to live.

But what if the wretched occupiers thwart the landlords efforts? Damage the property installations, refuse to deal with waste responsibly, and keep the place in a mess? Well, landlords will be pleased to note that tenants now also have obligations under the new regulations, obligations not to impede or obstruct the landlord or his manager in the execution of his duty.

So arguably, if the tenant continually knocks over all the bins and rips out the bars in the windows, he too can be prosecuted and face a fine on conviction. Its not all bad news for landlords.