Imagine twelve people living in a rented property meant for five. They all have to share the same toilet, bathroom and kitchen facilities. Doesn’t sound like much fun to us, and you probably agree. Unless you’re the Watford landlord who recently did exactly this – and made a tidy sum at the expense of his tenants’ safety and welfare.
But his fun came to an abrupt end when a disgruntled tenant complained, and he was fined £30,000 for overcrowding.
Room for rent
So what are the current rules? Well, pay attention:
If you let out a property (with shared bathroom and kitchen facilities) to at least three people who are not from the same household (i.e. a family), this is known as a house in multiple occupation (aka HMO or a house share to us mere mortals).
If you’re renting out a “large” HMO, you must have a licence. And “large” means that:
- it’s rented to 5 or more people from more than one household;
- it’s at least three storeys high; and
- it provides shared bathroom or kitchen facilities.
The conditions of a HMO licence mean you have to make sure the house is suitable for the number of tenants. “Suitable” refers to size and facilities, not simply, as some unscrupulous landlords may try to argue, the fact it has a roof and a front door etc. The landlord or agent of the house also needs to be considered a “fit and proper” person, which means no criminal record or breach of landlord laws. Finally, the local authority will require copies of up to date gas and electrical certificates etc.
This particular landlord had a HMO licence. But perhaps he hadn’t read the bit in the licence about the condition of the property, and allowed twelve people, including a child, to live in a flat meant for five. Not really the behaviour of what we’d consider a “fit and proper” landlord, and Watford magistrates came to the same conclusion. Some of the tenants were in bedrooms so small that they were listed on the HMO licence as storerooms. The tenants shared one small filthy kitchen and the fire exit from the property was obstructed. For the privilege of living in such a desirable property, the tenants were shelling out £515 a week (putting £26,780 a year into this greedy landlord’s pocket).
Evidence suggests that he was actually only too aware of the fact he wasn’t playing by the rules: it was asserted that he would clear the property of tenants ahead of council inspections and shift them back in or get new ones after the council officers had left.
Inevitably, the law caught up with him and in addition to being fined, he won’t be getting another HMO licence any time soon. He is, however, still allowed to remain a landlord – but this would be difficult to prevent until banning orders (proposed in the current Housing Bill) are introduced.
As housing demand continues to increase, there’s potential for these sorts of cases to become more common as rogue landlords take advantage of vulnerable tenants. Not only is tenants’ welfare being put at risk, there’s the prospect of a shadow housing market helping to fuel illegal working, benefit fraud and illegal immigration.
To help councils tackle the overcrowding problem head-on, the government has released new proposals for more robust licensing. By extending the current rules to include smaller and medium sized properties (and introducing a potentially unlimited fine), the aim is to stop ruthless landlords who exploit their tenants and charge them extortionate rents to live in cramped conditions.
Under these proposals, a HMO licence will be required for house shares (were you paying attention?) which are:
- one and two storey homes – currently they have to be at least three; and
- flats above shops – which are currently often exempt.
A minimum size of room will also be set, in line with existing overcrowding standards. This should overcome the “one size fits all” which many landlords seem to be taking rather too literally at the moment.
Local authorities will be able to take much stronger action against rogue landlords and letting agents. Not only will banning orders be introduced for the more prolific and serious offenders, fines will become unlimited and there will be a more stringent “fit and proper” person test for house share landlords.
The closing date for comments on the proposals is later this month, so we’ll be watching with interest to see what happens.
To see our guidance for residential landlords, click here…