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HMOs can be a major investment. This 6 bedroom detached house in Tunbridge Wells is for sale through Winkworth at £850,000 Freehold. It is a good-sized Victorian property registered as an HMO (House of Multiple Occupation) with nearly 2,500 sq ft of accommodation arranged over four floors.
some HMOs, especially those with difficult tenants or large numbers of individuals who are unconnected with one another.
Take robust and prompt action for defaulting tenants Where tenants are not complying with their tenancy obligations and are frustrating your compliance with the management regulations you should act robustly and promptly. This should include clear letters explaining what is wrong, scheduling extra management visits, serving notices under section 8 of the Housing Act 1988, and in the worst cases advising the landlord to pursue action to recover possession.
Have the right terms of business and tenancy agreements It is important that the agent reserves the necessary authority to themselves in their terms of business. This should certainly include the right to spend money to comply with any statutory requirement or notice from the local authority and also an indemnity from the landlord against any prosecution or associated costs. In the tenancy agreement there should be specific clauses requiring the tenants not to exceed the number of occupiers approved and an obligation to adhere to the terms of the Management
30 l May 2012 l TheNegotiator
Regulations and any obligations under any HMO licence.
Reply to statutory information requests Local authorities have a substantial power under s235 of the Act to demand information about the management, occupancy, and ownership of any property. It is a criminal offence not to provide this information promptly. It is not a breach of the Data Protection Act to comply with these requests and the only justification for withholding any document is that it is subject to legal professional privilege. If you have any documents that you believe fall into this category then you should seek expert advice.
Keep good records It is important to keep excellent records when dealing with an HMO. In particular detailed records should be kept as to who is present in the property, when this has changed, the findings of property inspections, and any actions taken as a result of them. Often agents are not able to rebut presumptions made by local authorities or untruths told by tenants because they do not have sufficient solid evidence. Where there are dealings with the Council then officers should be dealt with in writing or by email and notes kept of
telephone conversations. Advice and comments made by a local authority officer are not usually much of a defence to a prosecution but they can be helpful in embarrassing authorities into not prosecuting or in reducing fines levied on a guilty verdict.
Take quality advice early Too often, agents delay in taking advice as they do not want to incur the costs and then take actions which make their position worse. You should remember that there are tight timelines for appeals to the Residential Property Tribunal and when prosecution is threatened. Do not make the false economy of avoiding taking advice now and ending up having to pay for more detailed help later. Most lawyers who understand this area can provide basic advice on how to act at a modest cost and often on a fixed fee basis.
Don’t be bullied by Council officers It is always best to be courteous and cooperative with council officers but this should not mean that they should be allowed to dictate to agents and landlords. The powers granted to a local authority are limited. In addition many officers have a very limited understanding of the relevant law, particularly of the Housing Act 1988 and of industry standards. They often find it difficult to understand why a landlord or agent faced with a tenant who has damaged the property has not simply walked in and fixed the damage. Many officers will overstep their bounds through ignorance or due to a desire to achieve an outcome they see as desirable. Their advice as to how to proceed is also often doubtful for the same reasons.
Conclusions HMOs are valuable to landlords in terms of the rent recovered and can be a good source of fees for agents. However, they should not be dealt with lightly and should be treated with much more care than other residential property. l
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