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  • HMO & Multi-Lets

    Illegal HMO created by Rent to Renter - HELP!

    Dear all, just need some guidance. In summary gave our house to a rent guarantee company back in 2018. It has turned out to be a big mistake as we have received very poor service and most recently than have stopped paying us rent. We were informed that it would be let to a family as part of the agreement we had no control over the tenants living there.

    At an inspection my us back in April we found out that it is being used as an HMO and it is clear that the rent guarantee company has not applied for or have proper licence in place. They have now stopped paying us rent and no longer communication with us. We are now going through the legal channels.

    At the April inspection, we met the individuals living at our property and took their contact details and they were actually being not treated well by the rent guarantee company and had many complaints. They continue to live there.

    We have now managed to to get them to stop paying rent to the rent guarantee company. Long story but leaving that aside, the question is the issue of an illegal HMO and I believe as the property owners we are responsible to have a property HMO licence which we have not

    To protect our interests, the question is ,would it be advisable to contact the council and inform them of the events and what has happened and no HMO in place?  This in my opinion  would be in our interests as we would have told the council before they find out from some other source. After this we can I suppose get some time form the council to sort ourselves out and plan ahead what to do.

    Many thanks for your help.

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    Name the rent guarantee company please so others can avoid them

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    I would like to but do not want legal proceedings against me.

    Agreed contracts with  company A ( email from Mr X from company A domain name etc  plus contract with company A. met staff of company A and they came driving a car with compnay A logo etc ) but then it transpires company B is managing our affairs. Company A now now deny we have a contact with them and say it was fraud by Mr A - who clearly works for them , or did at the time. Plus unbelively both companies work out of same address/ premises.

    Long and horrible story .

    I believe both compnies are up to no good.

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    Hi Martin,

    This sounds like you have been caught up in an illegitimate Rent to Rent scenario?

    This company, in order to be trading compliantly, needs to be a member of an independent redress scheme.  You can put in a complaint to them.

    I would not contact the council - as a landlord the buck stops with you - that is why this activity is so risky for landlords.

    I would contact the police and Trading Standards as well as others may be affected.

    This video may assist:


    You could contact PT partner Landlord Action for advice, as they have experience of dealing with these issues.  They have a helpline and I would call that in the first instance.  The number is 0333 331 4227 .

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    I would not contact the council - as a landlord the buck stops with you - that is why this activity is so risky for landlords.

    Would it not be in my interest to inform the council and explain the situation? Better I tell them before they find out from a 3rd party and then i will be in real trouble.

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    Politely ask one or two of the tenants to move out so it becomes a HMO that doesn't need a license.

    If the tenants aren't up for that,  apply for a license, its no big deal. The council aren't going to fine you because you didn't have a license if you apply, and pay for one now. It's not a big deal. 

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    Evict your tenant, the "rent guarantee" company.  Following processes from the tenancy agreement between you & the company: (Please don;t tell us they supplied the tenancy..).

    Having done so, under s18 of HA 1988 the occupants (company's tenant's, not yours..) become your tenants under same terms as existing tenancy between company & occupants.

    Evict occupants using s21: IF you have the paperwork.

    (Yet...) Another example of why these "Rent Guarantee" schemes/scams are to be avoided...

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    I think different councils have different attitudes but where I live I like to be open and upfront with them. That way they can see that you're a genuine landlord and the issue is not of your doing.

    I would read the contract with the company and see if they have broken the terms. If so then you should be able to cancel it without any penalty but I do think you'll need to go down the legal route. 

    I'd also report them to the trading standards or whatever the equivalent is for that style of company so other landlords don't suffer what you've had to go through. 

    Definitely take the company and directors to court provided you think the money you spend is justifiable.
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    Saagar

    Disclaimer: I have no legal expertise nor am I a qualified advisor on any subject. A humble landlord using an open forum to exchange ideas and experiences. 

    I agree with your point about the councils Saagar.  I assisted some investors with a similar problem last year, and the council were incredibly supportive AND helpful.  They didn't prosecute or penalise the property owner, but worked with us to resolve the situation.  No doubt though that not all councils operate in this way!!!

    Vanessa, why do you say NOT to contact the council?  Surely, once the property owner has become aware of the situation, they should be communicating with the local authority?  Or is there another school of thought on this?


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    Helen Godbold-Eade

    Freelance Administrator for Property Investors / Entrepreneurs

    http://www.like-clockwork.co.uk

    Find me on LinkedIn: http://www.linkedin.com/in/heleneade/

    I am thiking I need to come up front with the council and expain what has happend to safeguard my interest.

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    Helen

    It all depends on the Council. The people you helped were very fortunate.  Martin101 may find the "rent guarantee company" has net assets of close to zero(did he check before signing? It takes two minutes to look up accounts at Companies House). Martin could get into trouble because as landlord of an unlicensed HMO he faces the wrath of the LA and the tenants will be able to ask for their rent back.

    Martin101  should get some professional advice urgently.

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