Landlords and property owners to fork out increased amount to licence HMO properties
Landlords and property owners in Middlesbrough will have to pay more to obtain a licence for some HMOs (House in Multiple Occupation).
HMOs occupied by five or more people not forming a single household and who share one or more basic amenities such as a toilet, bathroom or kitchen are subject to mandatory licensing by local authorities. A report for Middlesbrough Council’s executive said the fee, which comprises a single payment required in order to obtain a five year licence, had not been reviewed for the past 12 years.
The current fee is £755.42 for HMOs with five bedrooms plus a further £24.98 for each additional bedroom. Therefore a ten bedroom house costs £880.32 - the fee in this category will now increase to a total of £1,121.30. In respect of an HMO containing 20 bedrooms the fee will go up from £1,130.12 to a total of £1,416.28.
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Changes to the scheme, giving rise to added costs, included a need for interim, additional housing inspections during the five year licence period to ensure properties were well maintained and managed. Meanwhile, the fee is now to be split into two parts in accordance with court judgements, the report said. The first part covered the costs of processing and administering the licence and was non refundable should an application be unsuccessful.
The second part covers the costs of ongoing administration, management, investigation of unlicensed properties, compliance checks with licence conditions, officer training and development, enforcement of the licensing scheme and associated overhead costs.
The report said: “The licensing scheme should operate on a full cost recovery basis with all the costs borne by the licence holders and no burden placed on the public purse. A review was required to ensure that the staffing resource was adequate for the delivery of the licensing functions and ensure the operating costs of the scheme are being met by the income from the licence fee.”
Currently in issuing a licence environmental health officers carry out a property inspection to check safety standards and management arrangements, but licensable HMOs are only re-inspected during the five-year period if complaints are made by tenants or others and regulatory action is deemed necessary. Landlords also have to submit annual gas safety and electrical safety certificates annually to the local authority.
The report said: “HMOs provide more affordable single or double person accommodation and, due to Middlesbrough’s demographic, there is a considerable demand for this type of accommodation, particularly from the most vulnerable tenants.
“HMO accommodation is often used for emergency accommodation for the homeless. The number of HMOs has increased in recent years, providing more accommodation for a growing student market, as well as meeting the need for low-cost single-person accommodation.”
It said there were currently about 1,730 people living in 245 licensed HMOs in Middlesbrough. Some HMO properties were operating illegally without a licence, although to the extent of these was difficult to quantify since they often only became known when tenants made complaints or intelligence was shared between regulatory bodies.
The report added: “The proposed fees will result in a fair, proportionate and cost neutral model for the delivery of the HMO licensing function. Overall, this will ensure that there is an adequate staffing resource to administer and regulate the HMO licensing process, to ensure that properties are maintained to acceptable legal standards and that their occupants are protected.
“The two part payment process will be compliant with case law.”
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