Luigi Posted February 5, 2011 Report Share Posted February 5, 2011 I am going to buy my first B2L property. Would really appreciate your help here as it is totally new to me as a landlord. The property has more than 3 unrelated persons soI believe it qualifies as HMO. But they are under one AST. I am just not clear how it will work if some tenant decides to move out: - Is it my responsibility or the other tenant's responsibility to find a new replacement? - Whose responsibility to check the new tenant's references and credit history? As I think the tenants as a whole are liable to pay the total rent, so I think it is to the existing tenants' benefits and interests to make sure the new replacement can pay his/her share of rental. - Do we need re-sign a new AST everytime a new tenant joins? Thanks! Link to comment Share on other sites More sharing options...
SPEEDTWIN Posted February 7, 2011 Report Share Posted February 7, 2011 Call your local council and go to planning and ask to speak to the person who can advise on HMO's. I believe if a property is a unlicenced HMO you cannot evict via a s21 as that is a valid defence. Link to comment Share on other sites More sharing options...
Luigi Posted February 7, 2011 Author Report Share Posted February 7, 2011 Thanks Speedtwin for your reply... Actually I did check local council's website on HMO requirements, my property doesn't fall into the category that needs a license. Will you also be able to help with my above questions? Appreciated. Link to comment Share on other sites More sharing options...
Mortitia Posted February 8, 2011 Report Share Posted February 8, 2011 If you have e tenants on the same AST then if one decides to leave you have to end the agreement with the other 2 and start again. It could be that the remaining tenants don't want the responsibility of choosing new tenants or having to manage blanks in the rent. You should be responsible for tenant checks - then you can't blame the tenants when things go wrong and it is YOUR property they are in. You should not make this a cost to your tenants as it is for your financial benefit and you can claim the cost of checking back from tax. The best way I think is to do a new AST for each tenant but if the tenants wish let them choose a new housemate but YOU do the credit checking. You have to do something in all this and I think you are expecting way too much from your tenants.! Mortitiia Link to comment Share on other sites More sharing options...
Trenners Posted February 9, 2011 Report Share Posted February 9, 2011 I am going to buy my first B2L property. Would really appreciate your help here as it is totally new to me as a landlord. The property has more than 3 unrelated persons soI believe it qualifies as HMO. But they are under one AST. I am just not clear how it will work if some tenant decides to move out: - Is it my responsibility or the other tenant's responsibility to find a new replacement? - Whose responsibility to check the new tenant's references and credit history? As I think the tenants as a whole are liable to pay the total rent, so I think it is to the existing tenants' benefits and interests to make sure the new replacement can pay his/her share of rental. - Do we need re-sign a new AST everytime a new tenant joins? Thanks! Hi Luigi, You are not creating a HMO. You are creating a SINGLE AST with 3 - unrelated - people listed on it. A HMO (House of Multiple Occupation) is created when you have lockable bedrooms often with shared living areas (allocated to tenants who do not usually know each other) who have SEPARATE tenancy agreements with the landlord (ie: Each room has an AST created between tenant and landlord). You are creating a single AST where all tenants are "jointly and severally" liable. This means that if one of the tenants defaults on THEIR portion of the rent - the other two tenants are going to have to make up the shortfall. In a HMO - if Room 1 does not pay their rent ... that is not the problem of Room 2 or Room 3. In your case - when a tenant decides to leave the property you would need to bring the single AST to an end. You would need to perform an exit inspection - refund the deposit - then create a new tenancy with the remaining tenants plus any new tenants that you decide to introduce. Hope that helps ........ Mark Link to comment Share on other sites More sharing options...
Trenners Posted February 9, 2011 Report Share Posted February 9, 2011 I am going to buy my first B2L property. Would really appreciate your help here as it is totally new to me as a landlord. The property has more than 3 unrelated persons soI believe it qualifies as HMO. But they are under one AST. I am just not clear how it will work if some tenant decides to move out: - Is it my responsibility or the other tenant's responsibility to find a new replacement? - Whose responsibility to check the new tenant's references and credit history? As I think the tenants as a whole are liable to pay the total rent, so I think it is to the existing tenants' benefits and interests to make sure the new replacement can pay his/her share of rental. - Do we need re-sign a new AST everytime a new tenant joins? Thanks! Hi Luigi, You are not creating a HMO. You are creating a SINGLE AST with 3 - unrelated - people listed on it. A HMO (House of Multiple Occupation) is created when you have lockable bedrooms often with shared living areas (allocated to tenants who do not usually know each other) who have SEPARATE tenancy agreements with the landlord (ie: Each room has an AST created between tenant and landlord). You are creating a single AST where all tenants are "jointly and severally" liable. This means that if one of the tenants defaults on THEIR portion of the rent - the other two tenants are going to have to make up the shortfall. In a HMO - if Room 1 does not pay their rent ... that is not the problem of Room 2 or Room 3. In your case - when a tenant decides to leave the property you would need to bring the single AST to an end. You would need to perform an exit inspection - refund the deposit - then create a new tenancy with the remaining tenants plus any new tenants that you decide to introduce. Hope that helps ........ Mark Link to comment Share on other sites More sharing options...
Selkirk Posted February 9, 2011 Report Share Posted February 9, 2011 Call the council as, believe it or not, each one can have slight differences. Cheers Selkirk Link to comment Share on other sites More sharing options...
SPEEDTWIN Posted February 10, 2011 Report Share Posted February 10, 2011 Hi Luigi, You are not creating a HMO. You are creating a SINGLE AST with 3 - unrelated - people listed on it. A HMO (House of Multiple Occupation) is created when you have lockable bedrooms often with shared living areas (allocated to tenants who do not usually know each other) who have SEPARATE tenancy agreements with the landlord (ie: Each room has an AST created between tenant and landlord). You are creating a single AST where all tenants are "jointly and severally" liable. This means that if one of the tenants defaults on THEIR portion of the rent - the other two tenants are going to have to make up the shortfall. In a HMO - if Room 1 does not pay their rent ... that is not the problem of Room 2 or Room 3. In your case - when a tenant decides to leave the property you would need to bring the single AST to an end. You would need to perform an exit inspection - refund the deposit - then create a new tenancy with the remaining tenants plus any new tenants that you decide to introduce. Hope that helps ........ Mark I have to disagree joint tenancies or individual contracts have no bearing on the HMO status. With three unrelated sharers the property is a HMO I dont think it is a licencable one but is still classed as a HMO which would mean it legally requirs a 5 year elecy cert. A Section 21 would be invalid if served on tenants in a property that needed a HMO licence (not all hmo need licences) and it didnt have the required licence. Link to comment Share on other sites More sharing options...
Mortitia Posted February 10, 2011 Report Share Posted February 10, 2011 My post on AST's was assuming this was not an HMO but agree with Selkirk that local authorities differ considerably so check it out first. Link to comment Share on other sites More sharing options...
SPEEDTWIN Posted February 10, 2011 Report Share Posted February 10, 2011 254Meaning of “house in multiple occupation”E+W(1)For the purposes of this Act a building or a part of a building is a “house in multiple occupation” if— (a)it meets the conditions in subsection (2) (“the standard test”); (b)it meets the conditions in subsection (3) (“the self-contained flat test”); ©it meets the conditions in subsection (4) (“the converted building test”); (d)an HMO declaration is in force in respect of it under section 255; or (e)it is a converted block of flats to which section 257 applies. (2)A building or a part of a building meets the standard test if— (a)it consists of one or more units of living accommodation not consisting of a self-contained flat or flats; (b)the living accommodation is occupied by persons who do not form a single household (see section 258); 258HMOs: persons not forming a single householdE+W(1)This section sets out when persons are to be regarded as not forming a single household for the purposes of section 254. (2)Persons are to be regarded as not forming a single household unless— (a)they are all members of the same family, or (b)their circumstances are circumstances of a description specified for the purposes of this section in regulations made by the appropriate national authority. (3)For the purposes of subsection (2)(a) a person is a member of the same family as another person if (a)those persons are married to each other or live together as husband and wife (or in an equivalent relationship in the case of persons of the same sex); (b)one of them is a relative of the other; or ©one of them is, or is a relative of, one member of a couple and the other is a relative of the other member of the couple. (4)For those purposes (a)a “couple” means two persons who are married to each other or otherwise fall within subsection (3)(a); “relative” means parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew, niece or cousin; ©a relationship of the half-blood shall be treated as a relationship of the whole blood; and (d)the stepchild of a person shall be treated as his child. (5)Regulations under subsection (2) may, in particular, secure that a group of persons are to be regarded as forming a single household only where (as the regulations may require) each member of the group has a prescribed relationship, or at least one of a number of prescribed relationships, to any one or more of the others. (6)In subsection (5) “prescribed relationship” means any relationship of a description specified in the regulations. Link to comment Share on other sites More sharing options...
Luigi Posted February 10, 2011 Author Report Share Posted February 10, 2011 Thank you all for your kind help!!! I think I have some understanding of it now. Nevertheless, I think I should contact local coucil to get more clarification on the requirements. Link to comment Share on other sites More sharing options...
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