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  • HMO & Multi-Lets

    Buying HMO - planning use class and licencing

    Hello. Sorry this post is a part question, part frustrated rant, but perhaps I am missing a trick here and the good people of PT can give me some guidance, or at least some moral support…

    I’ve been looking at student HMOs in Bangor, North Wales. The council, Gwynedd, has both Additional Licencing and Article 4 in place so the potential for developing new HMO’s is to all intents and purposes zero. This leaves existing HMO’s as the only realistic source.

    At no point does anyone mention the C4 planning class required for HMO; in fact everyone seems to think a licence pretty much overrides any planning requirements. Local estate and letting agents say if the property has a current licence then all will be well – I just obtain a licence in my own name and crack on. Even the Housing department who issue the licences say the same - one of their managers has confirmed they don’t check the planning class before dishing out the out a new licence, their concern is purely the conformity of the physical building. So am I missing something here? Do people just get licenced and carry on? Hope for the best? When I mention a Certificate of Lawful Use everybody, and I mean everybody, just looks completely blank, as if I was asking a really odd question.

    I’ve been looking at a great property that has a new HMO licence for 4 people; inexplicably the owner has just taken a low-value single let for the whole property, thus technically reverting to C3 dwelling status. Of course the property still has the HMO licence so what would that realistically stop the owner running as an HMO in future? Or, as above, would they just crack on regardless?

    Do councils ever cross check their council tax records (exemptions, number of tenants etc.) with planning permissions?

    Have you guys and gals had this experience?

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    From the council tax side - it was very rare to have any contact with planning, the usual contact was either only when a council tax officer wanted to check something they had stumbled across or likewise in return from a planning officer. Bear in mind that planning and licencing of HMO's does not directly influence a council tax HMO decision (different legislation).

    What I would be more concerned about with any HMO is whether the state of the property is sufficient that the Valuation Office may come looking for a re-banding to individual dwellings, financially that is probably the biggest killer if it happens.


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    Specialist Council Tax paralegal advisor & consultant (A. NALP)
    http://www.lgfa92.co.uk
    Posting as @CouncilTaxGuy on Twitter
    Why not look at our blog at http://www.lgfa92.co.uk/blog

    Any posts are my own opinion on legislation and may vary from your local authorities !

    Thanks LGFA92, yes it does look like council teams work in silos and don't talk to each other.

    In this area individual room CT doesn't seem to be on the cards (yet), but obviously that could change at any time. I'd assume students would continue to be exempt but it would be a good incentive to make sure every room is fully let!

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    Yes - the student exemptions would apply.

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    Specialist Council Tax paralegal advisor & consultant (A. NALP)
    http://www.lgfa92.co.uk
    Posting as @CouncilTaxGuy on Twitter
    Why not look at our blog at http://www.lgfa92.co.uk/blog

    Any posts are my own opinion on legislation and may vary from your local authorities !

    I wouldn't proceed with this purchase as you say it is now in C3 usage in an A4D area.

    What would you do if the council decided to crack down on these planning breaches?

    In Brighton, the council have prosecuted several landlords for this in recent months.

    They all applied for retrospective C4 use and were refused.

    I'm sure other councils are also doing this as they don't like HMO's.

    This is why houses with verifiable established C4 use carry a premium on their price.

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    No an HMO licence does not equal planning permission. Council departments don’t talk all that much but they are doing so more and more. This has been driven by a new decision of the Tribunals that states that refusal or limitation of a licence on the grounds of not having planning permission is permissible.

     If you have been using the property as an HMO prior to the article 4 direction coming into force then permission will already exist as you would not be carrying out a material change of use. This may underlie some of the advice you are getting about existing licences.

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    David Smith
    Landlord & Tenant Solicitor
    Anthony Gold Solicitors

    Find me on LinkedIn: uk.linkedin.com/in/dsnsmith

    All opinions are my own and do not reflect those of my firm. No comment made should be taken as legal advice and you should consult a solicitor or other legal professional for advice on your specific situation.

    Hi David,

    Agreed re-established use. However, the OP states that the property is currently in C3 use which normally removes the established C4 use.

    Councils often allow you to apply for C4 planning where you can prove established use and if granted, you can switch between C3 and C4 for a certain period.

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    I'm with David here....the granting of a HMO license does not bypass planning restrictions. If you have established C4 use...then you shouldnt have any issues. Without this, you are taking a risk that it will be spotted.

    Please also be mindful...that if you are applying for a mortgage, the bank's solicitors are also likely to ask for the necessary proofs, and without them you could be in breach of terms.

    Re. the reversion to a C3, I have tended not to buy such houses (...to operate as a HMO), as technically they have "lost" their established use. However, always worth asking the council on this...but in my experience they are usually not very helpful and put onus on buyers.

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    The property is in Wales and prior to 25th February 2016 in Wales the C3 planning use classification applied to all dwelling houses up to and including six tenants but on the 25th February 2016 Wales introduced a C4 planning use classification of HMO: “tenanted living occupation by 3 to 6 people, who are not related and who share one or more basic amenities, as their only or main residence.”

    As the property is currently being used as C3, you would be required to apply for "change of use" at a cost of £380.00

    You can find more information about how changes to legislation by Welsh Government is affecting HMOs here  https://roomsincardiff.com/2016/11/25/is-...d-species/



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    Thanks again for the replies, they have been really informative and a good sense check that I'm right to be cautious. Yes, the seller really has shot themselves in the foot in every way taking on this tenancy. Thank you all for your very illuminating replies. Yes, I certainly wouldn’t want to get caught out like in Dom’s example where Brighton did a planning permission purge. Being open to refusal of a licence for lack of C4 sounds like a real time-bomb around here too because the council housing department seem to have a policy of virtually ‘auto renewing’ the licence for any property that has been licenced before. (Which in some ways is quite a useful thing. To their credit the housing team here at least seem keen to work with landlords and don’t seem to restrict licences.)

    Thank you High Yield for the Wales-specific info. From this and your linked page every existing HMO in Wales will have to apply for C4 PP – and may get refused?

    It does look like a perfect storm for anyone buying an HMO in Wales; nobody is aware of the C4 requirement, sellers haven’t/won’t apply as they might get refused and investors won’t buy because they run the risk of refusal on application. As said the only workaround is buying a property with the correct PP but the letting agent and estate agents don’t have a clue about this and never know. Everyone just clings on to the mantra 'having the licence is all you need'. Which if a buyer is gullible presumably works for the EA and the seller.

    My intended property was used as an HMO before the Article 4 came into force last year, but as of yesterday has a single tenancy, which yes, reverts the planning class back to C3. As I understand it this is a one-way street and a fresh PP would now be needed to use as C4 again. But this is academic if the seller has never applied for C4 PP anyway. Does historic established HMO use carry any sway in the Welsh PP process (even if the property has been subsequently let at C3)?

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    There’s an update on this: the property has been let to a company doing work in the area. It has been let on a single AST to the company owner so his employees can stay there while they work on a contract, so up to four unrelated people will be living there at any one time. Would this circumstance likely ‘preserve’ the C4 HMO status?

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