Raj Beri Audacious Article 4 & Challenging Licensing

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 (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 Right  Planning permission required from local council: may be refused Remember: Aim of an A4D is to stop new HMOs

HMO Licencing - overview Housing Act 2004 HMO Licencing (2006) Mandatory (Eng/Wales) Mandatory (Eng/Wales) 5 or more people AND 3 storey's or more AND >2 households Discretionary (Council-led) 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 YES Rent to 2 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 house Change 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 Tree Purchase or R2R Is it already an HMO** ** Seek evidence Is Article 4 in place? NO Speak to local council YES Confirm Licencing rules & proceed NO YES Confirm Licencing rules & proceed ** Article 4 not relevant