A planning expert has highlighted that new class order legislation calling for property investors to apply for  consent when opening a new house in multiple occupation (HMO) may be a misinterpretation of the rules and planners may not have the right to refuse the proposal.

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Newmarket racehorse trainer Russell Price was fined £3,500 for breaching an house in multiple occupation (HMO) prohibition order.

The prosecution is believed to be one of the first against a landlord for breaching an order banning use of the property for letting to tenants.

Price, 42, of Newmarket, pleaded not guilty at an earlier hearing to letting an HMO between September 2008 and April 2009 in breach of the order served by Forest Heath Council.

He failed to attend court for the hearing last week, so magistrates a found him guilty of breaching the council’s order in his absence..

Besides the fine, he was ordered to pay costs of £1,315.

Forest Heath Council served Price with a prohibition order in January 2008.

Subsequent inquiries by council officers revealed housing benefit was paid to tenants who said they were living in the property.

A Forest Heath District Council spokesman said after the hearing: “We believe this is the first prosecution of its kind in the country and it sends out a clear message that we will take action against the landlords of poorly managed houses in multiple occupation to ensure the health and wellbeing of potential tenants.”

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Running a shared house where five tenants lived without a license and failing to maintain fire safety standards has cost a landlord £8,300 in court.

Neil Jakubowski-Birch of Cherhill, Wiltshire was found guilty at Swindon Magistrates Court of failing to properly manage the house at Rolleston Street, Swindon.

The four storey property, which had seven bed-sits and five tenants, was visited by the council’s environmental health officers in 2009 who found a smashed window, disconnected or broken smoke detectors and emergency lighting, and poor fire doors – all of which would have been dangerous in the event of a fire.

The property was not licensed as a house in multiple occupation (HMO).

The prosecution was brought after Mr Birch failed to rectify all of the defective conditions following the council visits.

Magistrates fined him £2,300 for various offences under the Management of Houses in Multiple Occupation (England) Regulations, a further £3,000 for failing to licence the property which was in breach of Section 72 of the Housing Act 2004, and ordered to pay costs to the council of £3,066.

Paul Simmonds, the council’s Head of Neighbourhood, said: “Large properties such as this with missing or defective fire safety equipment pose a considerable risk to tenants. A fully functioning fire alarm, emergency lighting system along with properly maintained fire doors are vital to warn tenants in the event of a fire and to control fire spread enabling occupants to get out safely.

“In bringing this case we are sending out a clear message to all negligent landlords that dangerous housing conditions will not be tolerated. We support and encourage the majority of landlords operating in Swindon who provide safe and satisfactory accommodation, but there is no place for those that don’t.”

In a bizarre HMO licensing case, Aberdeen City Council is taking itself to court to challenge a decision by the council’s own licensing committee not to allow the council permission to run a hostel for the homeless.

So far, the case has cost the council up to £15,000 in legal fees that are paid from the budget set aside to help the homeless.

To try and save face, the council has adjourned the case so solicitors from both sides can discuss a solution.

At Aberdeen Sheriff Court has already agreed that the council should be able to appeal against its own decision.

The case has come about because the council is paying out for hotel rooms for the homeless when the hostel would provide cheaper accommodation.

But the council’s licensing committee turned down the HMO application in September after receiving more than 50 objections mainly relating to concerns about about antisocial behaviour from people living at the hostel.

The court has adjourned the case until May 12 to allow the solicitors to thrash out an agreement. The discussion will centre around whether a police report received too late for the original licence hearing backs the objectors or proves there are no grounds to fear the hostel will generate noise and nuisance.

If the appeal fails, the hostel will close and several staff face redundancy.

An HMO landlord faces prosecution for failing to maintain or licence shared housing that was so dangerous a council had to immediately close the building and rehouse the tenants.

Newham Council officers served an emergency prohibition order on the dilapidated property that housed 11 people – including several children.

The tenants lived in two flats above takeaway shops in Manor Park, Newham, East London.

The flats were linked by a doorway knocked in to a supporting wall.

Other hazards included:

• A flimsy board over a 20 foot drop from the second floor. In order to access the next floor, tenants had to use another staircase accessed by walking through a maze of rooms.
• Open live wiring next to the kitchen taps and a plug socket under the sink
• Shared kitchen area blocked the only fire escape.
• Smoke alarm not working and covered with a plastic bag.
• Common areas of the house were very badly maintained

Andrew Billany, Newham Council’s divisional director housing and public protection told web site 24-dash.com: “This house was not fit for humans – it was more like a rabbit warren with holes that passed for doors and stairs that led to nowhere.

“We will not accept sub-standard or dangerous properties as Newham residents renting privately deserve nothing less than a decent place in which to live. Where we find bad properties we will look to prosecute the landlords behind them.”

Local councils are maintaining a confidential database on private shared housing landlords across London, Property Investment Expert can exclusively reveal.

The information classes a landlord as “good, bad or average” and is the basis of decisions of whether the landlord is a fit and proper person to get a licence for managing a house in multiple occupation (HMO).

Other councils outside London are also adding landlord information to the database – and the database could become a countrywide tool for councils to track HMO landlords.

Existence of the database is just one of several pieces of previously behind-closed-doors HMO information revealed in a document published on the Communities and Local Government Department web site called Evaluation of the Impact of HMO Licensing and Selective Licensing that is free to download from the CLG web site.

New laws imposing stricter licensing and planning controls on shared housing start from April 6, 2010.

In commenting on the database, the document says: “A London authority promoted a database for recording information about landlords. It is a London based database that records whether a landlord is ‘good or bad or average’. The benefits of such a database are that it accepts that landlords may have properties across a number of London boroughs.

“Many landlords may have properties in locations across England, this database is now being populated by some authorities from outside of London, and the extension of such a database could provide some assistance to local authority officers assessing the fit and proper status of landlords and managing agents.”

Precise details of the information kept on the database is sketchy, but councils check several details about a property owner or the person they elect as the manager before granting an HMO licence.

The council will run a background check on the proposed HMO licence holder to check out if the applicant:

• Has convictions relating to violence, drugs , sexual offences, or fraud.
• Has breached housing, landlord, tenant or unlawful discrimination laws
• Has contravened any HMO code of practice as the owner or manager of any other HMO

Property Investment Expert editor Steve Sims uncovered information about the database when researching a guide to new HMO regulations available from the web site.

“Good landlords have nothing to fear from a database,” said Steve Sims. ”The problem in this case is the councils are keeping sharing this data behind closed doors and no one has any redress to check the data held about them or to question how a council officer rates tham as a landlord.

“This database needs to be brought out in to the open so anyone who is listed has a right of reply. The councils swapping information need to prove they have proper security and access controls in place as laid down in the data protection act.

If this was a database that rated tenants – and there might well be one for all we know – all sorts of groups would be making a hue and cry about breaching rights. Landlords have the same rights as tenants and in this case, a right to know what is recorded about them in secret. ”

Click here for more details or to buy and instantly download the HMO licensing and planning rules guide for just £12.99.

A landlord accused of bullying council officers, tenants and letting agents has been banned from letting four shared housing  (HMO) properties in Edinburgh.

Councillors withdrew his HMO licenses on properties in the city on the grounds he is not a ‘fit and proper’ person to manage shared housing.

A council report claimed that Mr Fortune was abusive in his dealings with council officers.

The report states: “The applicant has consistently acted in an aggressive, abusive and threatening manner not only in his dealings with council officers, but with tenants of his properties and residents and managing agents of properties neighbouring his.”

The landlord, Mark Fortune, 41, of Barnton, Edinburgh, told The Scotsman newspaper that he faces a similar hearing in relation to four other HMO licences.

Mr Fortune, who is thought to have 39 HMO properties across Scotland, said he will fight the ruling and is taking further legal action against Edinburgh City Council.

He was refused an HMO licence by the council in August 2009 on the grounds that he was not a “fit and proper person”.

He launched an court appeal, claiming that he was unaware of the hearing but that has now been dismissed by a sheriff.

The council will now investigate to ensure that he has stopped letting the properties as HMOs with the council putting tenants into temporary accommodation if necessary.

“The council’s enforcement team have had serious concern regarding Mark Fortune’s behaviour and fitness as a landlord over the last few years,” a council spokesman said.

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Making sure a tenant pays the last month’s rent before leaving is often a problem for landlords, so here are four tips from the experts at Student Landlord Magazine to help get that missing money.

1. Never match the tenant’s deposit to the rent.

Deposits should never be the same as a month’s rent or a multiple of weekly rent.

For example, if you have a shared house with four students in and you charge each £60 a week for rent, the deposit should never be £260 (£60 x 52  weeks divided by 12 months)

Rounding off the deposit like this lets the tenant make the mental leap that the rent equals the deposit.

Set your deposit as an odd number that is not divisible in any way by the rent, like £295 or £287.

2. Don’t set the rent as 12 monthly payments

Students are paid loans and grants in instalments – at the start of the three academic year’s terms. That’s the time to take your rent – when they are flush with money.

This also gives you better cash flow and cuts administrative costs.

If you can’t get three payments, use the 10 over 12 system like the council charges council tax. For our £60 a week student, that’s £60 x 52 weeks divided by 10 = £312 per month.

3. Check your tenancies don’t end over the summer

Most tenancy agreements run from July 1 until the end of the following June. Don’t let your agreements expire over summer because students away on holiday have little incentive to pay.

4. Add a guarantor to the agreement

Reference guarantors so you have someone you can find, like a close relative, if the tenant skips without paying.

Shared housing owners should make sure they have a watertight agreement with their managers and letting agents to avoid breaching their HMO licences.

Information revealed in a Communities and Local Government document about HMO licensing reports many letting agents merely find tenants and collect rents and are not ‘fit and proper’ licensed persons that the law states should manage shared housing.

Property Investment Expert editor Steve Sims discovered the information while researching a guide on new HMO planning and licensing rules that started on April 6, 2010.

“The CLG highlights this lack of differentiation between the HMO manager and a managing letting agent as a major cause of concern to some councils trying to enforce licensing,” said Steve Sims.

“It’s clear that this is likely to be a major enforcement point in the future and it would be sensible for HMO owners to have a written agreement with a letting agent that clearly lays out their responsibilities in the event of a council taking action.

Property Investment Expert recommends that HMO owners who do not look after their houses should have a contract with their manager and/or letting agent specifying the responsibilities of each person.

This way the HMO owner has redress if a letting agent fails to keep to the agreement and has a defence against a possible council prosecution.

The CLG document about HMO licensing also infers that some unlicensed HMO owners deal with shady letting agents to keep their businesses ‘off the radar’. Councils tend to focus on these agents and owners, so reputable HMO owners with licensed properties should check out their letting agent to ensure they are not tarred with same licensing avoidance brush.

Click here for more about our  guide to the new HMO planning and licensing rules

Councils load HMO licences with “onerous, unreasonable and unnecessary” conditions, reveals a shared housing licensing report to the Communities and Local Government Department.

The report accuses some overbearing councils of losing the confidence of landlords and is the latest of a line of exclusive shambolic HMO revelations about incompetent councils from Property Investment Expert (Click here for related stories – opens in new window)

An example is one landlord with five mandatory licensed HMO properties who successfully appealed to a residential property tribunal (RPT) against a number of discretionary licensing conditions.

The three main issues were mandatory membership of an accreditation and tenant vetting scheme, allow the fire service to carry out an educational visit with tenants and the annual service of fire extinguishers.

The council officer in the case noted that the RPT stated that these conditions were “too onerous” and while some elements of the original conditions remain they have been “watered down”.

The report detailing the criticism of HMO licensing, called Evaluation of the Impact of HMO Licensing and Selective Licensing is free to download from the CLG web site.

“Conditions which are considered unnecessary are those that are already covered by alternative legislation concerning tenancies or the requirement to provide a rent book if the rent is paid weekly,” said the report.

“Onerous conditions require the landlord to do something additionally time consuming to achieve little benefit, like one case study in the north west that stipulated the [landlord's] requirement to provide each occupier with a printed copy of government legislation. “

The report also criticised some councils for having too much of a preoccupation with safety standards.

The details were discovered by Property Investment Expert editor Steve Sims while researching a guide in to new HMO planning and licensing regulations that came in to force yesterday (April 6) available from the Property Investment Expert.

“These councils are making HMO property investors jump through hoops for no good reason – and are abusing their powers,” said Steve Sims. “They either don’t know the law or don’t care and it’s about time someone spoke up against bullying councils on behalf of demonised landlords who are often the victims too scared to speak up in fear of losing their HMO licence and their livelihood.”

Click here for more details or to buy and instantly download our HMO planning and licensing guide for just £12.99.