rb talk 13th june

Raj Beri Audacious Article 4 & Challenging Licensin

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Raj Beri

Audacious Article 4 & Challenging Licensing

Raj Beri – property investor/landlord

HMOsLHA

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 (A4D)• A landlord has the right to convert a

family dwelling to an HMO within their General Permitted Development Rights

• An A4D removes the General Permitted Development RightPlanning permission required from local

council: may be refusedRemember: Aim of an A4D is to stop new HMOs

HMO Licencing - overviewHousing 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 Selective

• All HMOs • All Rental Properties

HMOs: Article 4 versus Licensing

Article 4 (planning) & Licensing are entirely different bits of legislation, dealt by different

council departments

Article 4 = Licencing

You may need planning but not a licence or vica versa, both or neither – check with your council

R2R scenarios in Article 4 area

R2R an existing HMO Rent out as HMO NO

Planning Permission required ?

R2R an existing HMO Re-Let as HMO NO

Control of single let property Rent out as HMO YES

R2R an existing HMO Re-Let as HMO YESRent to2 people or family

empty

Evaluate local planning regulations carefully!!

2015 Hypothetical Example: Nottingham (Article 4 since March 2012)

• Q1: Do you need planning permission to change use?• A: YES: Article 4 in place, & council may refuse• Q2: Do you need a Licence to run the HMO• A: YES – mandatory and addn licencing in place

– WARNING: Licencing is on the increase

3-6 bed family home or single-let houseChange to a 3-6 bed HMO

Case Study: Gadd Street, Nottingham (December 2013)

• Q1: Do you need planning permission to run this as a R2R HMO?

• A: NO: its already an HMO• Q2: Do you need a licence to run the HMO• A: YES, Mandatory Licence

You want to R2R this 6-bed, 3 storey HMO, previously let to students

Investment Decision TreePurchase or R2R

Is it already an HMO**

** Seek evidence

Is Article 4 in place?

Speak to local council

YES

Confirm Licencing rules

& proceed

YES

Confirm Licencing rules

& proceed

** Article 4 not relevant

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rb talk 13th june

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