Have I got a H-M-O situation here? Tenants have pulled the wool over my eyes.

[Cheesecakelover9]

I currently rent out my old house. House is a 2 bed that has 2 single people sharing.

I saw my old neighbour yesterday who said there are actually 3 people living in the property. She is quite friendly with the girl who lives in my old house and has been in and it seems a 3rd person has supposedly set up a bedroom in the dining room.

If there is in fact 3 people living there (I don’t know how I would prove this) would that make me in breech of HMO?

I’m not sure what to do with this information as I self manage the property and have no agent to turn to. The house is being privately let and I found the tenants myself.

Yes, quite possibly. The criteria is:

*Houses in multiple occupation
Your home is a house in multiple occupation (HMO) if both of the following apply:

at least 3 tenants live there, forming more than 1 household
you share toilet, bathroom or kitchen facilities with other tenants.*

So if the third person is in a separate bedroom to each of the other people, and not sharing a bedroom with one of the other two as a couple, and they are sharing kitchen and bathroom facilities, it's an HMO.

You won't need a licence as it's a small HMO, but you do need to follow HMO rules. Also, it sounds like they are sub-letting? From 1 February 2016, the landlord must check that tenants have the 'right to rent' by doing immigration checks, etc., so you need to decide what you are going to do about that third person. Are you going to allow them to stay, do the checks and charge them, or tell them to get out?

Join NLA for £100 and use their free legal advice line (Im not on commission!). You may well need a license as there are different rules for each council, but an actual license is peanuts compared to other things you will need.

I echo that you need to get informed and quickly. I would also carry out an inspection if you can. You could call at the house in order to arrange it rather than doing it by phone or email, etc. Don't expect to be let in, but if they are illegally subletting one of the rooms, then their reactions will be telling.

You might need planning permission for change of use.

Thanks for your reply.

Yes it seems they are occupying 3 rooms. 2 bedrooms and dining room and reading between the lines they are not couples and individual sharers. Husband did work on the property last year and got chatting to two of them.

They are all sharing kitchen and bathroom.

I did the right to rent checks on the two tenants and have copy of passports. Deposit is protected.

Not sure if it’s classed as subletting or a lodger not that it makes any difference I don’t suppose.

DH is under the impression that if we were found out that would be down to the two tenants named. Like I said it’s proving there are 3 people living there. If I did a check on the property there is nothing stopping the 3rd moving out.

If I confront them about the 3rd living there they could deny it.

I want to go down the route of doing it official, checks on tenant, increasing the rent and all above board. But husband thinks we should turn a blind eye as you don’t have any official proof only hearsay.

I wouldn’t turn a blind eye! Tne wear and tear will be increased by 50%, you let your house to 2 people, not 3!

Cheeky fuckers!

You need to act - they are not being honest with you and are putting you in a position where you may be breaking the law/regulations. Not to mention that your insurance may be affected if the number of people actually living there differs from the number of people noted in the tenancy agreement. I'm not saying it is, but it could be. A house is an expensive asset and these liars aren't respecting you or your house.

Does their contract forbid subletting?
Is your buildings insurance valid? If there was a fire and the investigation showed proof of 3 people living there, would the insurers refuse to pay out?
I don't think that you can turn a blind eye.

If the two actual tenants have breached their contract by subletting then you should start eviction proceedings against them. The 3rd person has no tenancy and can be required to leave without the same legal hoo har.

I don't think that trying to regularise the situation by converting the situation from an illegal HMO to a legal one is a good idea.

I'm surprised that your DH is so calm about the fact that your tenants are potentially being dishonest with you. What else might they be dishonest about?

Yes the AST states no lodgers.

8.10. Not to assign, sublet, part with, or share the possession of all or part of the Property with any other person without the Landlord’s or the Agent’s prior consent, which will not be
unreasonably withheld.To avoid doubt between the parties if the Landlord gives consent to assignment of the Tenancy the Tenant will pay the legal costs of both the Landlord and the
Tenant for the assignment.
8.11. Not to take in lodgers or paying guests or allow any person other than the person(s) named as the Tenant in this Agreement and any permitted family or children to occupy or reside in the Property unless the Landlord or the Agent has given consent, which will not be unreasonably withheld.

That is a very valid point RE landlords insurance. I have checked and it is against the insurance terms. “Only the people named on the tenancy shall permanently reside at the property unless they are family or partners of the tenants.

So I have two options really. Get the 3rd person legal and comply with the HMO rules.

Or evict.

But my other issue is, as the bedrooms are equal size I only seem to attract shares. In 10 years I’ve only had sharers. How can I stop this from happening again?

You have to make regular visits to the property and not base your information on rumours. We do six month checks but always give good notice so as not to interfere with their right to quiet enjoyment of their home. I know some who do 4 monthly checks as they’ve had bad experiences, apparently that is the time it takes to grow a crop of cannabis!

The person who has moved in may not realise they shouldn’t be there and have been duped by the others but they’ll soon realise something is up if they have to make their belongings scarce for a landlord visit. Visits are also good to check that pipes haven’t been leaking and dripping, bathrooms aren’t getting mouldy, fences aren’t getting rotten, windows and ledges are getting cleaned, vents haven’t been blocked up. Leave all these things and you could be in for more nasty surprises and expenses.

Some areas don't allow more HMO s to be created. And you could be up to a lot of expense to upgrade it. Happy with that?

Arrange a visit and also have a look on Facebook to see if that gives the game away.

As this lot are so clearly ignoring the contract, don't renew. Sec 21 asap.

The problem is that if you go down the route to get the HMO legal, that will take time. During that time you will be knowingly allowing them to occupy an illegal uninsured HMO. Not a good plan.

Either way eviction or going down the HMO route will take time and during that time they are still invalidating my insurance.

From the information I’ve read online im not in breech of a large HMO. But I don’t know how long it takes to apply.

I think I’m going to contact my council tomorrow and see what they say with HMO. I will be basically turning myself in effectively.

I may also look at getting legal advice as I’ve never had to go down the eviction route before.

Cheesecakelover. I am not sure about the HMO rules, but if you go the eviction route, keep in mind that this costs a lot and it can take more than 6 months to evict them if they don't want to move. In this time, they can say that they don't want to pay the rent which will leave you with no income for many months plus the legal fees.
You can go and check the state of the house before calling the council. It might not be true.
But if they are not keeping the property clean and take care of it, then look into one of the 2 possibilities.
I know that there are 3 different individuals. But what if there was a couple and a single individual? There were also 3 people. I know on the contract therr are 2, but if they are honesf you can add the 3rd as a partner or something similar.
An extra person does not neccesary mean that it will damage your property more. There might be 2 individuals who might damage it more than 4.

Movingto I see what you mean.

From last time my husband was at the property and what neighbour has said the property is immaculate.

But the problem lies with IF this 3rd person isn’t related or is not in a couple. And from the information I’ve been told if they have set up a 3rd bedroom it seems unlikely. And as another poster pointed out it will invalidate my insurance if something were to happen.

That’s why I’m going to speak to the council and find out my options. If they are paying rent on time, they are never had a late payment and are looking after it then that’s fine and no skin off our nose. BUT I want it to be legal and all above board.

I like to think I’m a decent LL, repairs done on time. I’ve been flexible in the past with late payments (previous tenants) accepting pets.

But they are subletting a already quite low rent house and I’m the one who is liable.

Look on your council website and check what work you would need to do. Off the top of my head, fire doors, wired in smoke detectors, certain room sizes, numbers of toilets, common areas. It may not even be possible for your house to be a HMO. At the least it will be a few £k. More tenants are more wear and tear and more (unrelated) tenants are more hassle. Dont drift into this, be proactive - personally I wouldnt do it in a million years.

Can you post them a letter stating you want to do an inspection of the property?

There'll be evidence of additional occupation - see if they rectify it themselves - would be ashamed to lose decent renters

I’m struggling to find out the required information. Some websites says a large HMO is 5+ tenants / 3 story’s. First off the application fee is £1000 to start with. Wouldn’t even contemplate that.

Seems there is also a small HMO?? For 3+ tenants that fee is £100 that just requires electrical testing and gas safe to be sent off to council.

I need to try and speak to someone at the council as if it’s the latter that could be do able. If it’s the other option it would be crazy to go that route as the tenants are now on a rolling contract so a lot of expense.

Once I know what I’m dealing with I’m going to have to make a decision on how to proceed. Either evict or ask the extra guest to leave / do regular checks.

You seem to be confused

Do you want 3 tenants?
Or
Do you want the tenant to leave?

Could this be a temp situation for the 3rd wheel?

What's stopping you popping round and asking?

Google your LAs HMO licensing requirements. They vary. The default national one is five unrelated people or over two storeys, so hopefully there is not a problem.

If you are in London there is a helpful website called something like Londonlicensing.

Then write to your tenants reminding them of the no submerging clause in their lease. And that if you discover they are contravening it you will have no alternative but to terminate their lease.

Join a landlord association for free legal advice on what steps to take.

I agree you’re sounding very panicked. Visit the property, talk to the tenants and then go from there. You are also causing confusion between serving notice on them leaving the property and eviction. You can issue a s.21 to the current tenants and they leave as instructed or if they don’t that is when it gets more complicated and bailiffs involved to evict etc. Careful not to be seen to recognise the other person by calling the council about HMOs otherwise if they are unconnected to the other two you’ve acknowledged a tenant and will be in a difficult position.

Not on my phone now so a bit more detail.

I agree with PettsWood. Is the property more than two storeys. If not you probably don't have a small TMO, but you should check.

Then talk to the tenant, whilst making sure that the paperwork is in place. Which is why I suggested simply writing highlighting the clause they might be breaching.

If a third tenant is not creating an HMO (and honestly HMOs are a real pain, especially the planning side - certainly in Greenwich where I am grappling with the new rules you have to get planning each time you change from sharers to a family or vice versa: and from autumnn this will be a full planning permission not permitted development) you have options:

1. As them to keep to the terms of the tenancy.
2. Have a new tenancy agreement including the thid person and charge a bit more. Which if they are good tenants may suit everyone.
3. Issue them with an eviction notice. But this comes after the others, and only after you have sought advice, perhaps from a Landlord Assn. Before entering into something that involves conflict you need to understand the process and make sure all your paperwork is correct.

If the extra tenant has created a small TMO you need to explain to the two on the tenancy agreement that you cannot tolerate subletting. Greenwich, which is my experience, is strict on room sizes and communal space. If one is using the living rooom you might find that there is insufficient communal space for three and you are only licensed for two. A lot of faff and expense, and that is before you start on insurance and plannning. All for no benefit to you.

Could you not speak to the current tenants about this? Find out who this person is etc and explain that they are in breech of their agreement and you will have no choice but to begin eviction proceedings if they don't comply.

I'd arrange to do a property inspection, you need to give them 24hours notice and I'd do this in writing and keep a copy. Then take it from there.

Thanks for your replies.

Pettswood you are right I am getting very confused between serving notice / eviction. I got really muddled when posting yesterday.

Needmore the property is a two story.

I have a small update in that my DH did some digging around this morning. Thanks to the poster that suggested looking into social media he has found undeniable proof of a 3rd person living there.

I have been trying to get hold of a person at the council without much luck. I’m going down this route first as if they say no not possible for a 3rd living there (depending on requirements) then the tenants have two options. Either all move out or extra person moves out.

If we can get the property to meet requirements we have the option to then get that person a tenancy agreement increase the rent so on and so forth. But this will depend on what we will need to do and costs.

It’s all very much up in the air at the moment until I can speak to a human as our council website is very confusing and they are bringing in new proposed regulations next month to add even more confusion.