Audacious Article 4 Challenging Licensing Raj Beri Raj

Audacious Article 4 & Challenging Licensing Raj Beri

Raj Beri – property investor/landlord HMOs LHA

Some Myths about HMO Legislation • Myth #1: Article 4 Direction developed for HMOs: NOT TRUE • Myth #2: Article 4 means no NEW HMOs: NOT TRUE • Myth #3: All HMOs need a license: NOT TRUE • Myth #4: Only larger HMOs need a license: NOT TRUE • Legislation – Article 4 Direction – Licence to Operate

What is an Article 4 Direction (A 4 D) • A landlord has the right to convert a family dwelling to an HMO within their General Permitted Development Rights • An A 4 D removes the General Permitted Development Right ØPlanning permission required from local council: may be refused Remember: Aim of an A 4 D is to stop new HMOs

HMO Licencing - overview Housing Act 2004 HMO Licencing (2006) Mandatory (Eng/Wales) • 5 or more people AND • 3 storey's or more AND • >2 households Discretionary (Council-led) Additional • All HMOs Selective • All Rental Properties

HMOs: Article 4 versus Licensing Article 4 (planning) & Licensing are entirely different bits of legislation, dealt by different council departments You may need planning but not a licence or vica versa, both or neither – check with your council Article 4 = Licencing

R 2 R scenarios in Article 4 area Planning Permission required ? Control of single let property R 2 R an existing HMO Rent out as HMO YES Rent out as HMO NO R 2 R an existing HMO empty Re-Let as HMO NO R 2 R an existing HMO Rent to 2 people or family Re-Let as HMO YES Evaluate local planning regulations carefully!!

2015 Hypothetical Example: Nottingham (Article 4 since March 2012) 3 -6 bed family home or single-let house Change to a 3 -6 bed HMO • • Q 1: Do you need planning permission to change use? A: YES: Article 4 in place, & council may refuse Q 2: Do you need a Licence to run the HMO A: YES – mandatory and addn licencing in place – WARNING: Licencing is on the increase

Case Study: Gadd Street, Nottingham (December 2013) You want to R 2 R this 6 -bed, 3 storey HMO, previously let to students • Q 1: Do you need planning permission to run this as a R 2 R HMO? • A: NO: its already an HMO • Q 2: Do you need a licence to run the HMO • A: YES, Mandatory Licence

Investment Decision Tree Purchase or R 2 R Is it already an HMO** NO YES ** Seek evidence Is Article 4 in place? YES Speak to local council NO Confirm Licencing rules & proceed ** Article 4 not relevant