Hello, I wonder if anyone can help me - I know that OpenRent tenancy agreements state the maximum number of occupiers in a contract which both tenants and landlord sign as part of the Rent Now package at the beginning of the tenancy.
So for example, we have a tenancy starting with 2 tenants with an agreement stipulating that a maximum of 2 tenants can live in the property. However later on, one of the tenants meet someone and invite their new partner to move in to share their double bedroom, creating a 3 people, 2 household tenancy and therefore an unlicenced HMO.
My question is - are we as landlords still legally responsible for this unlicenced HMO even though our OpenRent agreement states that no more than 2 more should have been living at the property?
There isn’t a yes or no answer to this, because the answer is you may be liable for some things.
If you can show that your tenancy agreement limits the number of people living there and prohibits underletting and you regularly inspect and question the tenant about any other people you see there, then I believe its unlikely that a local authority will fine you in the event it suddenly becomes licensable. Its not unheard of however, as there have been cases where both the Council and the court believed that there was collusion between landlord and tenant and imposed penalties on both. These were fairly extreme rent-to-rent type cases though.
I think it’s also unlikely that a court would support a Rent Repayment Order claim by a tenant who deliberately breached the contract and concealed the fact from the landlord.
However, a local authority on discovering an unlicensed HMO that required one would almost certainly expect the landlord to remedy the situation which might mean having to get a licence and make any necessary safety changes if you were unable to evict them within a reasonable period.
An HMO that doesn’t require a licence also has to comply with the HMO Management Regulations and possibly the Fire Safety Order. If a landlord discovered their property had become an HMO, then I think they would likewise be expected to address the situation either through compliance or getting the tenants to leave/change the situation.
A landlord in this position may have some financial redress against the tenant for any costs involved.
Thank you for your advice David, all noted. I wonder whether adding a Custom Clause to the tenancy agreement stating that the property is not a licenced HMO and that the tenants would be solely liable should they have more than 2 persons at the property and hence creating an HMO property requiring licence? I am trying to look at every possible way to avoid this from happening, as this very problem happened at a flat of mine just now.
I dont believe the clause would add much to the ones you already have limiting numbers etc. You also can’t make the tenant solely legally liable. Only a court can do that