Our usual Friday look at landlord and tenant related news items. What do we have for you this week?
The government has issued guidance for Local Authorities on the various reforms that are taking place for Houses in Multiple Occupation (HMOs).
To remind you – the rules for mandatory licensing of HMO are changing. At present, it is an HMO with five or more tenants in two or more households in a property with three or more stories.
However, on 1 October 2018, the three storey requirement will go, bringing immediately many more properties into scope. The official estimate is 160,000 but it is believed that it could be many more.
It looks as if there will be no ‘grace period’. Which means that if you have rented properties with 5 or more people who are not one family (which is more or less what ‘household’ means) on 1 October but no HMO license, then you will be in breach. Meaning that:
- You can be prosecuted and fined
- The Local Authority can serve a penalty charge notice on you for up to £30,000
- Your tenants (or the Local Authority if your tenants are on benefit) can apply to the First Tier Tribunal for a rent repayment order
- If you are convicted the Local Authority can apply for a banning order.
Effectively NOW is the grace period. So make sure you apply for your license before 1 October.
Minimum room sizes
You may also find that some of your rooms can no longer be used as bedrooms in your HMO as there are also new minimum room sizes:
The minimum sleeping room sizes are:
- 6.51 m2 for one person over ten years of age
- 10.22m2 for two persons over ten years of age
- 4.64 m2 for one child under the age of ten years.
Any area of the room in which the ceiling height is less than 1.5m cannot be counted towards the minimum room size.
This will probably mean that many people will be rendered homeless as we already have a shortage of suitable accommodation in many areas and this is not going to help. Where does the government expect them to go?
Selective Licensing Review
The government has also announced that it is to carry out a review into the effectiveness of selective licensing, saying:
In areas where selective licensing applies, landlords must apply for a licence if they want to rent out a property. This means the council can check whether they are a “fit or proper person” to be a landlord, as well as making other stipulations concerning management of the property and appropriate safety measures.
The review will see independent commissioners gather evidence from local authorities and bodies representing landlords, tenants and housing professionals.
The review’s findings will be reported in spring 2019.
Many landlords and agents are hostile towards licensing, and David Cox is quoted as saying:
“Licencing doesn’t work, and it never has done. The Government’s aims are laudable; we’re all striving for the same end goal of improving the private rental sector for consumers, but these policies are impractical.
“Licensing means councils spend all their time administering schemes, rather than enforcing against rogue, criminal landlords – a fact which has been proven time and time again over the last decade.
However, I suspect that many enforcement officers would beg to differ.
Don’t rely on the logo
It looks, from a post on Property Industry Eye as if some letting agents are displaying tenancy deposit scheme logos when they are not actually using the scheme.
The DPS admitted this in a twitter conversation saying:
“Our website has an easy-to-use page where we encourage tenants to check whether their deposit is protected at the DPS (https://myaccount.depositprotection.com/#tenancy/checkDepositStatus), and if landlords have any questions about the status of deposits for their properties, they can contact us at any time to discuss.”
What about all those other logos I wonder? Are they not real either?
Crackdown on letting agents
However, it looks as if some Local Authorities are starting to take things a lot more seriously as this report shows Tower Hamlets fined letting agents (including two branches of Foxtons) in a major transparency exercise.
The Council investigated 401 letting agents and landlords between July 2016 and the end of this May to check compliance with regulations such as fees transparency and displaying how a deposit will be protected.
Apparently a total of 27 letting agents, landlords and managing agents have been fined a combined £150,000 with fines ranging from £1,000 to £10,000.
Good for them. Let’s see more of this. As here is yet another example of what can happen:
eHomes Collapse owning landlords thousands
Mandatory client money protection and regulation can’t come too soon for landlords in East Anglia who have lost thousands of pounds after the collapse of Swaffham letting agent eHomes.
The EDP reports that
- The Property Ombudsman has ordered eHomes to pay one landlord £10,000.
- When landlords chased eHomes for money owed they were given a series of excuses.
- The previous firm run by Mrs Steele went into liquidation in 2015 owing creditors £100,000.
Which last point says it all.
Another report says that TDS is terminating eHomes membership saying
We regularly carry out compliance checks on the companies and individuals who use our services.
Typically, if we find a landlord or agent to be in contravention of our rules, we will terminate their membership of the scheme.
But that’s not going to help any of the affected landlords and tenants is it?
For that, we need mandatory licensing, and insurance for letting agents plus a scheme to compensate people affected by dishonesty – as there is for solicitors.
Housing blocks at risk of collapse
An article in the Guardian reports that checks on tower blocks have shown that two blocks in Tottenham Broadwater Farm estate are at risk of imminent collapse and the Council are taking steps to move families out.
Two residential blocks, which were completed in the early 1970s are among 11 buildings on the Tottenham estate that failed structural tests, are the most seriously affected and are likely to be demolished.
The tests uncovered serious structural failings, which make the homes vulnerable to collapse in the event a gas pipe or gas canister explodes or a vehicle strikes the base of the buildings. Tangmere House, a six-storey block, and Northholt, an 18-storey block, are those worst affected.
Let’s hope they re-house the families before anything happens.
- Nearly Legal reports on developments in the Fitness for Human Habitation Bill
- RICS has appointed the Centre for Effective Dispute Resolution as its default Alternative Dispute Resolution (ADR) provider for its member firms, following the announcement of the withdrawal of Ombudsman Services: Property from the market.
- New research says that people prefer traditional designs for new properties
- This blog has been selected as the top UK Property law blog by Feedspot. Thanks!
Newsround will be back next week.