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Important News for HMO Landlords

Important News for HMO Landlords

If you have a property in the south of Portsmouth (PO1/PO4/PO5) which you let to 3 or more unrelated people, regardless of how you contract, then this property is classed as an HMO and needs to be licensed. Click here for more information. Additionally, some converted houses which are now let as flats or smaller units may also need to be licensed (this is the case if the property meets the definition of what is known as a section 257 property).

As part of this licensing scheme, we understand that enforcement actions may stop some letting agents from managing this type of property and also, some landlords will no longer be allowed to manage their properties unless they use an approved agent.

If you own a property managed by an agent who has been denied a licence to manage an HMO, then you will either need to manage the property yourself or appoint a new agent. As a landlord, you are responsible for a number of items which your agent has probably managed for you and it is important that you are aware of these items and take the necessary actions to avoid costs or legal problems in the future.

Firstly, you need to check your tenants deposits are protected in one of the government approved schemes (add link). If they are not, you will be liable to repay them (and up to 3 months" rent) whether your agent collected them or not. Also, we have had cases recently where agents have collected rent and then not passed this onto the landlord (see https://www.gov.uk/tenancy-deposit-protection/overview), you must ensure that your agent has client money protection in place (typically this means belonging to an industry association such as ARLA) and also, belongs to one of the government approved redress schemes  otherwise if they, for example, cease trading you could well be out of pocket.

Once you have ensured your monies are safe, you then need to decide whether to go to another agent or manage the property yourself. The PDPLA recommends either doing it yourself - if you are local and have a little time to spare, it is not too hard once you know the basics which we can help with, or that you choose an established agent who has been a member of the licensing scheme since it was introduced and who is accredited by Portsmouth City Council.

For help with choosing a letting agent, see our helpful guide on the subject but also, see our discussion on whether to manage yourself or to use an agent. Either way, we do not recommend partial solutions (an agent finding you tenants but not managing them is likely to give you the less reliable tenants and keep the most reliable for the customers for whom he provides full management).

Whether you choose a letting agent or go it alone, we would recommend belonging to a landlords association. There are two national associations, the RLA and the NLA and of course, the PDPLA serves landlords locally and can keep you abreast of both local and national regulations.

As a PDPLA member, your £60 annual membership should easily pay for itself as it gets you

  • Access to our recommended suppliers (which could save a fortune over contractors preferred by letting agents and result in much better workmanship - all of our suppliers are recommended by our members and most offer attractive discounts)
  • Discounted landlords insurance providing 5 star cover (one of our members had a major house fire this year and his property was fully restored within 3 months at a cost of nearly £50,000 and the insurance even covered loss of rent)
  • A monthly newsletter plus a bi-monthly copy of the RLA magazine (Residential Property Investor)
  • Regular monthly meetings which you are free to attend covering the whole spectrum of topics for landlords, from bridging and mortgage finance to pest control and damp resolution
  • Access to legal documentation such as sample contracts for you to use, all on our website
  • A B&Q TradePoint card offering prices which are often cheaper than those available to local tradespeople
  • Representation locally as new regulations are developed and nationally through our involvement in the British Property Federation and the Residential Landlords Association

If you are interested in joining, click here....

And for landlords who are worried by these changes, we are running a special evening surgery at The Queens hotel in Southsea to discuss the implications for you and help you decide which options work best for you going forward. Dates are still open, but if you are interested in attendingThis email address is being protected from spambots. You need JavaScript enabled to view it..

Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.

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