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On the application to apply for a HMO licence it states that you must inform any relevant persons including the Mortgage company and the freeholder among others.
Ive searched and found answers regarding the mortgage company however i cant find anything relating to the freeholder.
Has anybody had or heard of any issues associated with the freeholder having any problems with an application?
Does anybody have any advice of what to include when the freeholder is informed? The licence application stated that you must inform them of some basic information, but would it be a good idea to include some extra information stating what a HMO is and who you intend to let it to?
If you are thinking about letting out a property, you usually need to get consent from the freeholder (if any) to comply with the terms of the lease.
As such, it shouldn't be a surprise to the freeholder informing them about the licence application if they have already given you permission.
Richard Tacagni MCIEH CEnvH
London Property Licensing
This information is intended as general advice and guidance. It is not legal advice and should not be taken or relied upon as such. No liability can be accepted for any reliance on the information published in this response. You may wish to obtain independent legal advice.
Thanks for the reply RIchard
Is it always the case that you need to get permission from the freeholder to let out your house? Would this specifically be stated on the Title Register?
I am looking at a Title Register now and nowhere can i see that it states you must get permission to rent out the property, or that renting out the property isnt allowed. Would it use some other generic terminology or phrasing?
I would assume there is a large percentage of landlords who do not do this.
my advice is tell them as little as possible. i didnt disclose any details of my mortgages as i dont think its got anything to do with them and i doubt very much that the legislation allows authorities to insist on disclosure of this sort of personal info. no repercussions.
dont forget councils only want this info to cause trouble for landlords.
Joe, in my experience all local authorities want details of your mortgage as part of your HMO license application.
There are two parts to the application.
1) Ensuring the property is compliant with fire and other risk assessments.
2) They vet the applicant as a suitable license holder. This includes previous landlord experience, CRB checks and ensuring your mortgage company won't call in the loan due to a fraudulent transaction.
They don't want the tenants to be evicted by the lender.
not sure how disclosure etc will stop tenants being evicted due to a 'fraudulent transaction'.
do councils have the right to ask such questions or are they exceeding their statutory empowerment and excessively heavy handed/OTT?
i think councils do want tenants evicted... that way they can say the the PRS is full of rouge landlords which suits their ideology, i.e. councils write to lenders (eg from LR search) saying the property is being used as an hmo (even when not according to mortgage co. definition of hmo)! that is more likely to result in repos./ evictions than if they didnt notify lenders.
i have asked around and i personally know of multiple landlords who let out their leasehold houses, and thats just ones ive spoken to in the last few hours. none of the ones ive spoken to actually knew it could even be an issue. im not condoning it or saying i think its acceptable, just that it seems common.
im not talking about not informing the mortgage company - thats a totally different issue and id say a bit more risky but also reasonably common practice.
im no legal expert, however ive just had a quick look through a leasehold for a property which was written a long time ago and nowhere can i see any mention of not being able to let the property or needing permission. the old hand written language doesnt suggest needing permission.
now if no permission is said to be needed, would you write to them and ask for permission to let the property anyway?
then there is the issue of the hmo application requiring you to notify the leaseholder. if you simply notify them you are applying for a licence once you reach the number of tenants needed to require a licence, can anybody see any reason the leaseholder may object or even actually bother to reply in a reasonable time? or is it best to notify them early - but this could attract an unwanted reply.
surely this is a common issue and people have experience in this field.
The even bigger issue is if more councils deem any property with 3 or more household sharers occupying a property a HMO.
Most lenders will not agree that for lending decision and valuation purposes that these are HMO'S as far as they are concerned.
Now if they do agree with a council's new HMO licensing requirement that could really cause chaos.
It would force LL to remove 1 tenant household to reduce to two households to prevent need to license as a HMO.
This would in turn force rents to be increased for the remaining two sharers to cope with a removed household.
If it was not possible then LL would have an unviable property if 3 households were needed to sustain the letting.
The inability to have 3 households without licensing must affect property values.
There would be less demand from LL.
Most leasehold property conditions would not allow a HMO letting.
It means reduced households will gave to pay more rent.
Where will all the removed 3rd household tenants live!?
yes that issue of the additional licence for 3x people is an issue for lenders as you mentioned. if standard buy to let lenders wont allow you to let as a hmo but lenders wont give you a hmo mortgage for only 3 people then that is another topic in itself.
you say that most leasehold terms on property wouldnt allow a HMO? im sure there are many HMOs out there that are leasehold houses.
Just to clarify, if you are applying for a mandatory HMO, additional or selective licence, it is a legal requirement that you must notify all interested parties that an application is being submitted. Then, before the licence is issued, the council must send them all a copy of the draft licence and allow time for any representations to be made. The council has no discretion about this once a licensing scheme is in place.