Planning Laws Renting to sharers

Small-shared houses or flats occupied by between 3 and 6 unrelated individuals who share basic amenities were reclassified under planning laws from “C3 Dwelling Houses” to “C4 Houses in Multiple Occupation”.

Areas you will I need Planning Permission – Please click here?

Under Legislation changes introduced 6th April 2010 this meant the Landlord required planning permission. Although the new coalition government then overturned this many councils have decided they want the renting of shared houses be controlled by planning applications. Long term this will have a major implications where and the type of properties Landlords invest in.

Overview HMO & Licencing

Selective Licencing -Low demand areas

Renting Rooms vs Houses

Your are refused Permission

If you do not have permission you cannot let to sharers

A council has the power to insist Landlords apply for planning permission – All councils need to do is invoke Section 4 of Town and Country Planning (General Permitted Development) Order 1995. Once implemented the council removes the right of the Landlord to claim they can rent to sharers because this was allowed under their ”permitted development rights”. Councils are giving 12 months Notice for this negates the Landlords right to claim compensation for loss

What does this mean in reality

If the council do not want shared houses(C4) in a part of town, they can refuse planning permission. Your right of appeal will be limited.
Just because you rented the property previously as a shared house (C4) this does NOT mean you will be entitled to continue to do so in future.
If the property is a shared house (C4), you may have to sell as a shared house for the council may not allow a change of class use to a family home (C3).
Penalties – court fees and fines and possibly problems eviction the tenants if in an area of Selective Licensing

Renting to three or more sharers

Class C4: small shared houses or flats occupied by between 3 and 6 unrelated individuals who share basic amenities.
Class C3 :(a) those living together as a single household as defined by the Housing Act 2004 (basically a related family)
Large houses in multiple occupation (those with more than 6 people sharing) – these are unclassified by the Use Classes Order. In planning terms, they are described as being sui generis (of their own kind).
In consequence, a planning application will be required for a change of use from a dwelling house to a large house in multiple occupation or from a Class C4 house in multiple occupation to a large house in multiple occupation see HMO
The point here is if a council wishes to impose restrictions on where Landlords can rent to Tenants (sharers) they can do so.

Now if councils widen Selective Licensing they can charge you a fee for planning permission and a fee to rent in that area (this could be £700+). You cannot ignore this for if you do not have a licence you are unable to evict a tenant using the Section 21 route

The effect of such a Direction is to remove permitted development rights, thereby necessitating a planning application to be made.

Which areas are affected?

Bath, Leeds, Manchester and Oxford are amongst the 22 Councils that have already announced the dates when Landlords will have to a apply for planning permission click here

No Go HMO

What happens if you are refused permisson “During our initial conversation with the council they stated that they would simply not be issuing any more HMO licences in the town as there were simply too many of them.” click here to read article

Refused permission Shared Houses Location Location

Typically areas that are predominantly owner occupied do not want a litter of beer cans, old shopping trolleys and traffic cones lining their street and will often vehemently object to a property being let on a room by room basis.read more buying in the right part of town

Below we review the implication of Change of use from shared house to family let and backto shared house

Article 4 Directions are not issued without careful consideration, because the Council may be required to pay compensation in circumstances where you cannot obtain planning permission for development which otherwise would be treated as permitted development.

Landlords claim for compensation for loss

The Town and Country Planning (Compensation) (No. 3) (England) Regulations 2010 (2010 No. 2135) will reduce local authorities’ liability to pay compensation where they make article 4 directions as follows:

where 12 months’ notice is given in advance of a direction taking effect there will be no liability to pay compensation; and
where directions are made with immediate effect or less than 12 months’ notice, compensation will only be payable in relation to planning applications which are submitted within 12 months of the effective date of the direction and which are subsequently refused or where permission is granted subject to conditions.
The following clarification was issued by CLG on 28 September. “It does not matter whether a local authority has an existing policy restricting HMO development or not for the purposes of compensation liability. Under the planning system there is a general principle that once permission has been granted, either by a specific grant of planning permission or by means of a development order, the right to develop is guaranteed and can only be withdrawn upon payment of compensation. It is that principle that is being adhered to here. Local authorities will, therefore, be liable to pay compensation in all instances where Article 4 Directions are made with less than 12 months’ notice.
Previously a claim for compensation could have been made under section 108 of the 1990 Act for abortive expenditure

Change of use from shared house to family let and back

For those property owners who already rent properties to sharers/students, it will be important to establish with the Local Authority the legality of the existing use. It is important that landowners maintain records to prove how a property was utilised immediately prior to 6 April 2010 or date Article 4 came into being to ensure that existing use rights are not extinguished.

The revised use classes allows as permitted development a change from use class C4(HMO) to C3 (a),(b) or (c), but does NOT allow a change of use from Use Class C3 back to C4. Landlords who currently let properties to sharers should be aware that if they subsequently let the property to a single family they will effectively lose the right to revert to shared accommodation in the future. It remains to be seen how vigorously local authorities will enforce the regulations. As with most planning enforcement it is likely to be complaints driven, thus if tenants occupying a dwelling illegally as an HMO upset the neighbours then enforcement action could well follow.“ this section is the view of David Jones of www.evansjones.co.uk

ABUSE OF THE RULES

The original intent of Section 4 was to allow Councils the right to protect the local areas “conservation areas” without having to apply to Secretary of State. The use of Article ameans councils can make whole areas no go HMO or shared Houses.

A good article on the intended use of Section 4

http://www.ihbc.org.uk/context_archive/46/mlearned_dir/mlearned_s.htm

The use of Article 4 Directions

Members Only

This section is members only

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