I have been designated an HMO on property

[Loopy]

Following a pre inspection by the council they insisited that I apply for a licence and undertake new work which will probably make the property uneconimic to manage. I have 9 lettable units (all short term lets in a three storey property. My question to the forum is.....

Can I trade down from 9 to say 5 and have effectively 4 empty rooms without requiring a licence and the undertaken work?

Oh by the way, Hi to everyone I am a newbe!

[Trenners]

Hi Loopy,

The whole point of the new HMO licencing - introduced on April 6th 2006 - was to raise the standard and safety of property let to multiple, unrelated, occupants.

If the council have ruled that you should get work done to raise the standard and improve the safety of your property - why would you not want to undertake this work?

I can't believe that you are trying to find a loophole around this legislation (or is that why your nickname is loopy) for the sake of PROFIT.

I'm sorry to hear that the recommended work might make your properties less profitable but, in my experience, tenants that are burnt alive in their beds tend to be late in paying their rent and ignore eviction notices.

If the only thing that motivates you is profit then I suggest you sell up.

Mark

[Loopy]

Hi Loopy,

The whole point of the new HMO licencing - introduced on April 6th 2006 - was to raise the standard and safety of property let to multiple, unrelated, occupants.

If the council have ruled that you should get work done to raise the standard and improve the safety of your property - why would you not want to undertake this work?

I can't believe that you are trying to find a loophole around this legislation (or is that why your nickname is loopy) for the sake of PROFIT.

I'm sorry to hear that the recommended work might make your properties less profitable but, in my experience, tenants that are burnt alive in their beds tend to be late in paying their rent and ignore eviction notices.

If the only thing that motivates you is profit then I suggest you sell up.

Mark

Hi Tenners

Thanks for your input.

Agreed the council are trying to raise the standards for tennanted property. That is good for tennants.

I have not explained the whole problem here. But the work indicated by the council looks as if it may be uneconomical to acheive. I would still like the option of selling the property in the residential market where different rules apply and a wider market is available.

I want to keep the property and obviously be a responsible landlord but I had kind of come to the conclusion that a sale is probably the only course of action.

By the way, what landlord is not motivated by profit?

If you are a landlord Tenners, please put your hand on your heart and honestly state that you are not hoping to profit.

Thank you again for your input.

[red40]

Following a pre inspection by the council they insisited that I apply for a licence and undertake new work which will probably make the property uneconimic to manage. I have 9 lettable units (all short term lets in a three storey property. My question to the forum is.....

Can I trade down from 9 to say 5 and have effectively 4 empty rooms without requiring a licence and the undertaken work?

Oh by the way, Hi to everyone I am a newbe!

There would be no point to you down sizing to 5 as it would still be a mandatory licensable HMO.

If you had 4 persons in the property you would be exempt from mandatory HMO licensing, however the local authority could still ask you to do some kind of works under Part 1 (HHSRS) of the Housing Act 2004 (the Act) as it would still be a HMO by definition, although not licensable.

How you would down size is a difficult subject, you would have to apply to the council for a temporary exemption notice (max period is only 6 months) as decsribed in section 62 of the Act to be able to reduce the number to suitable level, if they agree of course. If you try to use a section 21(1)( or (4)(a) notice to recover possession without being licensed you are leaving yourself open to prosecution, as section 75 of the Act states.

You can down size further to only 2 persons to fall outside the HMO definition, but again you would not be exempt from any possible works under Part 1.

Its impossible to say if there are any loopholes in the Act as no legal challenge has yet been made to any part of it.

[Trenners]

Hi Loopy,

The point I was trying to make was that it is not good to compromise standards or safety to create profit. If I was unable to provide accomodation to my tenants at the required HMO living and safety standards then I would sell up.

It seems to me that you will generate more income by letting 9 units than reducing the number of units you need to let to avoid the HMO licencing.

Although profitability might be impacted in the short term (as you make the changes that the council request) I would have thought that, in the medium term, you would be better off.

Good luck,

Trenners

[Loopy]

Thanks guys for your suggestions.

It may be that I can keep four tennants safely at the house pending sale.

But just to give you a futher pointer the Inspector came round just recently as the property is having a tart up and new kitchen and he had to dodge the scaffolding for the roofwork!

So, to receive news that I need to spend a further not inconsiderable amount was a bit hard to chew. I guess I'll try and make do with four tennants and make arrangements to sell. Buy two or three semis and rent them out - seems like less hassle.

Now all I have to do is evict the fith tenant. Never done that in ten years! Should be interesting!

Thanks again for your input.