hypothetical way to avoid HMO

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  • hypothetical way to avoid HMO

    3 storey house with 6 "tenants" in, who all know each other. Tenancy agreement with 4 of them, with a clause allowing 2 "guests" to stay at the house on a non-permanent/non-paying basis. No definition of permanent vs non-permanent. Monthly rent on the joint tenancy is equal to the amount the 6 would pay. As technically only 4 tenants (certainly in writing) then HMO registration is not necessary.

    Question - what is the flaw in the hypothesis?

  • #2
    It depends if the '2 non-permanent unpaying guests' was a fib or not.

    I would have said that genuine temporary guests ( not lodgers) would be acceptable. But if this just a cover, then there would be risk of having to pay a fine for unlicenced HMO.

    Like with anything; you play Russian Roulette. Its only when you get reported that trouble starts. If there are enough bedrooms for more people, questions might be asked.
    All posts in good faith, but do not rely on them

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    • #3
      The only flaw is that they dont have to be tenants, SI371 specifically states persons, so if the local authority are satisfied there are 6 persons living there, it would be up to the landlord to prove otherwise. Doesn't matter if only 4 persons pay rent, to achieve one of the conditions of HMO status only one person has to pay rent or 'other consideration'.


      • #4
        however if the LL plays innocent and shows that the tenancy agreement is only for 4 tenants, and explicitly prohibits sub letting or taking paying lodgers, and appears shocked to find the 2 temporary guests (who he was assured were only staying for a week) are actually living there permanently.... then i doubt a court would hold him liable... depends how convincing the performance was i guess. I'm not saying he wouldnt have to take action (court would almost certainly demand so).. but not until he was 'found' out.........

        this is all hypothetical btw.


        • #5
          It has nothing to do with paying lodgers as you have already said the landlord knew they where there, so his basic defence has already gone out of the window. Of course the council may not wish to pursue it and just make sure he complies with the current HMO regulations and 'watch' the property until such times it requires licensing, if the landlord won't licence, the council issue a management order and effectively take the property off the LL, then prosecute with a view to securing a fine upto £20,000 and inform the 'legal' tenants that they can get an order whereby the LL has to pay back their rent for 12 months, personally I would rather licence, but you do get hypothetical landlords who think they can beat the system

          But hypothetical speaking you play with fire, expect to get severely burnt.


          • #6
            if you always roll over, then you'll always get shafted.


            • #7
              Being prosecuted for running an unlicensed HMO, first offence, you are unlikely to get a huge fine, imo. Being prosecuted for perjury would land you in jail, probably, imo.

              Great idea, OP.
              The contents of this note are neither advice nor a definitive answer. If you plan to rely on this, you should pay somebody for proper advice.


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