Are Councils Charging Illegal HMO Fees?

Are Councils Charging Illegal HMO Fees?

Landlords need to watch for councils charging illegal house in multiple occupation or HMO fees, warns a lawyer.

Under HMO laws, councils are allowed to charge for a licence – but cannot add in other fees for varying licence conditions, inspections or other administration.

The practice is also more widespread and extends to other council licences – as a recent High Court case involving the licensing of sex shops.

The High Court ruled in favour of the shop owners who objected to paying the council fees that were not directly related to the granting of a licence.

The same ruling supports HMO and student landlords with bills from local authorities.

One council caught illegally charging landlords is Oxford City Council.

Lawyer Andrew Gold, who specialises in HMO and tenancy deposit law, took the council to task for a client who was asked to pay for a HMO licence variation.

The council refused to rescind fees so the matter went before a Residential Property Tribunal.

The landlord won the case, with the tribunal telling the council the fee was illegal and could not be charged.

As a result, Oxford City Council quietly amended their HMO fees from September 1, 2013 – but the tribunal decision was in March and other landlords may have been charged illegally meanwhile.

“The point is if a fee is unlawful, then it is always unlawful,” said Gold. “This means the charge should not have been raised and is refundable.”

Oxford City Council has a history of losing high profile HMO related cases.

Oxford is the only council with a policy of licensing all houses shared by three or more tenants.

However, they had to drop their original plans to licence due to the threat of a legal challenge from landlords and letting agents. The scheme was later revamped and introduced in a watered down form.

Oxford was also one of the gang of four councils that lost a High Court judicial review of government HMO policy.